Is Maryland ready for another tax amnesty?

Senate Bill 763 (SB763)

As we all have heard many times: History has a way of repeating itself. Too many times this has an ominous undertone. But today, I am rejoicing at the possibilities this cyclical occurrence may bring to my fellow Maryland Taxpayers.

Many of us can recall the most recent Tax Amnesty of 2009. Fortunately it’s back again. You may now be eligible to participate in Maryland’s 2015 Tax Amnesty. Bill 763 was signed in April 14, 2015. It is set to become law June 1, 2015. The State of Maryland will start accepting eligible Amnesty applicants as early as the fall. The new amnesty applies to individuals as well as corporate taxpayers. You may be eligible to take part in this fantastic opportunity and drastically reduce the penalties and interest you owe, as well as avoid criminal prosecution.

The amnesty period will apply to Maryland State and local withholding tax, sales tax, admissions and amusement taxes. Starting September 1st, you may be able to reduce penalties and interest for the following offenses.

  • Nonpayment
  • Nonreporting
  • Underreporting

HOW IT WORKS

The comptroller may wave all civil penalties except previously assessed fraud penalties to one-half of the interest imposed against the taxpayer who on or before December 31, 2014 failed to file a return and/or pay the tax.

The waiver of civil penalties and interest provided under this new law are void if the taxpayer fails to pay the full amount of taxes plus one-half of any interest strictly in accordance with the terms and schedule established in the agreement.

The Tax Amnesty program applies to the following taxes:

  • Individual income tax
  • Corporate income tax
  • Withholding tax
  • Sales and use tax
  • Admissions and amusement tax

WHO MAY QUALIFY?

In order to qualify, generally the taxpayer would have to agree to pay their unpaid tax debt in full plus one-half of any interest. In exchange for that, the Comptroller would remove all penalties (other than previously assessed fraud penalties) and a majority of the interest.

You must:

  • File delinquent returns.
  • Pay entire tax liability.
  • Pay one-half of any interest due on that tax liability during the amnesty period.
  • If unable to pay the tax liability and one-half of the interest in full during the amnesty period (September 1st 2015- October 30th 2015), you may enter into a payment agreement as long as the liability is paid in full by December 31, 2016.

WHO IS NOT ELIGIBLE?

You may be ineligible if:

  • You previously received amnesty between 1999 and 2014.
  • You have any criminal charges pending in the courts of Maryland.
  • You are a Corporation with 500 employees or more.

WHAT DOES THIS MEAN?

Taxpayers who file returns or pay taxes during the amnesty period will not be charged with a criminal tax offense as a result of those actions. Taxpayers that hold up their end of the approved agreement, will have a large majority of their penalties waived by the Comptroller. This is a significant benefit to taxpayers with outstanding state tax liabilities. This program is an amazing opportunity considering Maryland’s annual interest rate of 13% on unpaid tax!

WHAT SHOULD I DO?

If you are a taxpayer or business who owes the State of Maryland, time is of the essence. You should act quickly and contact a qualified tax resolution attorney. Contact our office for a consultation to determine if you qualify for Maryland Tax Amnesty 2015. We look forward to helping you resolve your tax matters. If eligible, we will work quickly and efficiently to help you take advantage of this unique opportunity.

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