Tax Relief Services Maryland

For Businesses

Admissions and amusement tax, sales and use tax and/or tire recycling fees filed late could be charged a minimum of 1% interest per month and and a penalty of 10%. If you are a vendor in this situation you would also be disqualified from receiving the “timely filing discount.”

Withholding returns that are filed late are subject to a penalty of 5% initially, which goes up after 30 days to 10% plus interest charges.

If you get a Notice and still do not file your tax return, you will incur additional penalties along with being levied an estimated assessment. Once you receive an Assessment Notice you have just 30 days to reply and if you dispute the amount you can request a hearing. If you fail to file a dispute the assessment then becomes final and collection efforts may commence.

For Individual Taxpayers

The Comptroller may assess penalty charges of up to 25% of what is owed with 13% interest charged as well per year on outstanding taxes.

Wage & Asset Seizure

Once the Comptroller of Maryland files a lien against a taxpayer, the seizure of assets or wages may soon follow through an attachment order. Your bank account(s), paycheck, business equipment and inventory as well as real estate may be attached and ultimately seized and sold to pay off your delinquent taxes.

Installment Payment Plans

When the Comptroller determines that you owe a back tax debt, you will be notified in writing with a Personal Income Tax Balance Due Notice in the mail. If you are unable to fully pay what you owe, the Notice allows you to select among several choices the payment term that would work best for you. Then, return your Notice using the envelope enclosed. While you’re waiting for your requested payment plan to be processed, you should start making payments. At some point you will be notified that your payment plan has been approved along with the terms of the agreement.

If you do not think any of the terms offered in the selection will work for you, please contact the Collection Department by phone at (888) 674-0014 or (410) 974-2432 to discuss your financial situation. You can also send an email to [email protected].

Include the following information in your email:

• Your full name and address
• Your phone number
• The number on your Notice or your case number
• The last 4 digits of your social security number

If you want to arrange your Installment Payment Plan online you can to the Online Payment Agreement Request Service on the Comptroller’s website to get it set up. To complete the request you must register with the service center.

You are not allowed to pay in cash at any of the branch locations. You will need to pay by money order, certified check or cashier’s check. If you want, you can arrange to have your monthly payments deducted automatically from your checking account on a certain day each month.

This is similar to a program offered by the IRS. If you find yourself in this situation you should find a reputable tax professional or CPA who can offer you the kind of tax help you need. If you don’t pay what you owe, the State has the right to charge interest of 13% per year and penalties of up to 25% for late payments. It only makes sense to face the situation head on as early as possible.

Businesses that cannot fully pay their taxes on time may also request an Installment Payment Plan. Generally, these payment plans are supposed to last no more than 6 months. For these short-term payment arrangements, filing a lien is not required. While the business is making installment payments, any refunds that are payable to your business will be intercepted and applied to the unpaid tax balance.

If you are asking for an Installment Payment Plan that extends beyond 6 months, your request will have to be approved by a Collections Section supervisor. To protect the State’s interest, a lien may be filed against you in the applicable circuit court.

Revocation of Business Licenses

Vendors who do not remit their sales and use tax may receive a summons from the Comptroller to attend a hearing regarding the status of their licenses. If you do not appear for the hearing or do not pay the taxes you owe or contact the Comptroller to make payment arrangements, you can expect your license to be revoked. Without a business license most businesses would have to close their doors. Every business should have a tax professional who offers tax help and advice on a regular basis so it can run smoothly without risking its license. The enforcement of license revocations occurs through civil court orders, criminal proceedings or via local liquor boards.

Unpaid Tax Debt is Public Information

The Comptroller of Maryland aggressively goes after people, business entities and corporate officers who are carrying a large unpaid tax debt. The Comptroller publicly names these individuals and businesses on a list published online. Any recorded judgments and liens against these delinquent taxpayers filed in any circuit court in Maryland are public information as well.

Appeals & Hearings

You are within your rights to appeal a tax assessment, interest, penalty or the denial of a tax refund that you disagree with. You would do this by filing an appeal of the Notice of Assessment you received from the Comptroller within 30 days of the date the Notice is postmarked. The first step of the process would be the setting of an informal hearing. If you plan on appealing your Notice of Assessment, it would be wise to consult with an experienced tax professional for their tax help and guidance through the appeals process.

Tax Filing Extensions

If you fill out your tax return and realize you cannot pay what you owe in taxes, you should still file your taxes! However, if you find that you do not owe any money by April 15, you have the right to ask for an extension. You can do this online by filing a Form 502, 503, 505 or 515 requesting a 6-month extension from April 15th. You can also phone the Revenue Administration Division at (800) 260-3664.

If you are not sure whether you owe any money, use Form 502E to determine whether you do or not. If you know that you don’t owe any taxes, do not use Form 502E. In certain cases, if you are overseas you can ask for an extension of up to 12 months. If you’ve received an extension for filing your federal taxes to the IRS and you owe nothing in State taxes, you will automatically get a 6-month filing extension for your State tax return since Maryland compares its records with the IRS.

However, if you do owe taxes to the State, you need to pay on time (by April 15th) and included a completed Form 502E. If you are taking care of all of this online, you can pay your taxes via credit or debit card. Don’t forget, an extension to file your taxes does not give you an extension on actually paying your taxes.

Offer in Compromise

If you do not have the funds to fully pay your taxes and have tried unsuccessfully to resolve the matter through all normal channels, you may be eligible for an Offer in Compromise. This does not involve filing an appeal, but rather this is a form of tax relief that would allow you to pay less than what you owe to settle the entire matter. Before making your request you should consult with an reputable tax professional or CPA who has provided the needed tax help to successfully navigate this process with other clients.

This program is for individual Income Taxes, a business’ Sales & Use Tax or for unpaid Amusement & Admissions Tax. When applying for an Offer in Compromise you would need to use Form MD656. Individuals would also need to submit Collection Information Statement Form 433-A, while businesses would use Form 433-B. A completed Collection Information Statement provides the Office of the Comptroller detailed information on the taxpayer’s income, financial assets and liabilities so their financial situation can be accurately evaluated.

In applying to the IRS for their Offer in Compromise program you are required to pay whatever your collection potential would reasonably be, or to offer an amount that both you and the IRS agree could be paid without causing you and your family severe financial hardship.

This is the same stance that the State of Maryland takes with those applying for tax relief through an Offer in Compromise. In reality, the State rarely accepts these applications because taxpayers really have no right to to pay the State less than they owe in taxes, however it is up to the Collections Section to determine whether it makes sense to accept a taxpayer’s offer to settle their tax liability once and for all.

To qualify for tax relief through an Offer in Compromise you must meet these requirements:

• You have an outstanding tax bill that you’ve received an assessment for.
• You have tried to resolve your liability in every possible way without success.
• Two years have passed since you first became liable for this tax.
• Your financial situation is such that you it is unlikely that you will have the means to pay this tax bill anytime soon.
• Your resources and assets are insufficient to pay the tax bill and you are unable to use your present resources or those in the future to pay off these taxes.
• There are no other remaining tax matters that you can appeal. If any one of your tax problems can still be appealed, you are not eligible for an Offer in Compromise.
• You are up-to-date on filing all required tax returns.
• You are not involved in any unresolved bankruptcy proceeding.

In applying for an Offer in Compromise, you must complete, sign and submit the forms listed below, as well as all the documents asked for on the forms:

• Offer in Compromise Form MD 656
• Individual Collection Information Statement Form MD 433-A
• A complete and current financial statement if you are applying for an Offer in Comprised based on insufficient financial resources or hardship.
• If you are asking for an Offer in Compromise based on doubting your liability, you are required to provide a detailed explanation of your reasons why you do not think you owe this amount in taxes.

Offers in Compromise requests should be mailed to:

Offer in Compromise Program

Maryland Office of the Comptroller

301 West Preston Street, Room 203

Baltimore, MD 21201

The Office of the Comptroller will consider your offer and decide whether there are adequate grounds for reducing your tax liability by accepting your offer. If the Comptroller determines that there is good reason to accept less than you owe, but you have not offered enough, they will tell you how much they would accept to settle the entire matter.

The Comptroller’s Office considers the following when they review an offer:

• Doubt about the amount owed – you do not think you owe the assessed amount.
• Insufficient financial resources – your income and/or assets are not sufficient to fully pay what you owe in taxes.
• Financial or other hardship – you do have the assets, but being forced to make full payment would lead to severe financial hardship or it would be inequitable and unfair.

You will be notified in writing of the Comptroller’s decision, although there is no standard timeframe for this. If your offer is approved, you are required to stay up-to-date for the next 3 years on all tax filings, otherwise you will end up being responsible for the full amount. If the Comptroller decides that your offer is not enough, you may be told an amount that they would find acceptable. If you have any questions or concerns, please call (410) 767-1557.

For further information or help please phone the Office of the Comptroller at (855) 213-6669.