Country / Language

Additional Information Released for Maryland 2015 Tax Amnesty Program


7/9/15

Synopsis

The Maryland Comptroller recently released additional information regarding the state’s 2015 Tax Amnesty Program (“Program”).

Issue

The Maryland Comptroller issued additional information regarding the state’s 2015 Tax Amnesty Program in the form of Frequently Asked Questions (FAQ). The FAQ, which addresses more than 50 different questions, confirms that:

  • The Program will run from September 1, 2015 through October 30, 2015 (“Amnesty Period”)
  • With respect to tax liabilities due on or before December 31, 2014, all civil penalties (except for previously assessed fraud penalties) and 50% of the interest associated with delinquent taxes will be waived for eligible taxpayers who participate in the Program (“Amnesty Waiver”)
  • Qualified participants in the Program will not be charged with a criminal tax offense for filing any delinquent returns, unless the criminal charge is already pending or under investigation
  • The taxes covered by the Program are:
    • Corporate income tax
    • Sales and use tax
    • Fiduciary income tax
    • oPass-through entity nonresident income tax
    • Withholding tax
    • Individual income tax, and
    • Admissions and amusement tax
  • Eligibility
    • To be eligible for the Program, taxpayers must not have participated in any Maryland tax amnesty programs held between 1999-2014
    • Taxpayers currently under audit, or who are appealing or protesting taxes owed, may participate in the Program
    • Taxpayers who currently have a deferred payment arrangement with the Maryland collections section may participate in the Program
  • To participate in the Program, taxpayers must:
    • File a separate amnesty application for each tax type for which amnesty is sought
    • File any related delinquent or amended returns
    • Pay the tax in full and 50% of any interest due, or establish a payment plan and pay 10% of the total amount due, and
    • Ensure that the applications, returns, and payments are received or postmarked no later than October 30, 2015
  • Tax Amnesty Payment Agreement:
    • As noted above, taxpayers unable to pay the tax in full during the Amnesty Period may enter into a payment agreement with the Maryland Comptroller. Taxpayers are required to pay at least 10% of the total amnesty amount owed and the remaining amount will be paid in equal monthly installments for the number of months indicated on the payment agreement application. The minimum down payment amount is based on the sum of tax owed plus 50% of any interest multiplied by 10%. Taxpayers must comply with the terms of the agreement and the liability must be paid in full by December 31, 2016.


The Comptroller’s Office Tax Amnesty Program frequently asked questions and answers can be found here.

What Does CohnReznick Think?
Maryland’s 2015 Tax Amnesty Program applies to a broader group of taxpayers than previous Maryland amnesty programs. Participation in the Program may result in significant savings for eligible taxpayers, with savings including the 25% late payment penalty and one-half of the 13% per year interest otherwise due. Taxpayers interested in the Program should compare benefits of participating in the Program to those offered in Maryland’s Voluntary Disclosure Program to identify the best option for their specific situation.

Contact

For more information, please contact Henry Chiwaya, a senior manager in the Firm’s State and Local Tax Practice, at henry.chiwaya@cohnreznick.com or 301-280-1812; Harry Tuul, a senior manager in the Firm’s State and Local Tax Practice, at harry.tuul@cohnreznick.com or 703-744-6720; or Bob Hersh, a director in the Firm’s State and Local Tax Practice, at bob.hersh@cohnreznick.com or 301-664-8206.


 
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
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