Ten Tax-Time IRS Tips to Consider

ANNAPOLIS, Md. (March 28, 2017) –The tax filing deadline is Tuesday, April 18, this year. This is because April 15 falls on a weekend and the following Monday is a holiday in the District of Columbia. Even with an extra three days, the IRS urges taxpayers to avoid waiting until the last minute to file their taxes.

For those who have yet to file, the IRS has 10 quick ideas to help:

1. Gather Records. Good recordkeeping is important. It helps to ensure that nothing gets overlooked. Records such as receipts and cancelled checks also provide expense documentation.

2. Use IRS Online Tools. The IRS has many useful online tools. The Interactive Tax Assistant tool provides answers to many tax questions. It gives the same answers that an IRS representative would give over the phone.

3. File Electronically. Most taxpayers file electronically these days. It offers ease and convenience. The tax software guides people through the entire process. There are no forms to fill out. Electronic filing is also a more accurate way to file.

4. Use IRS Free File. Free File is available only on IRS.gov. Taxpayers earning $64,000 or less last year can use free name-brand tax software to file a federal tax return. Free File Fillable Forms, an electronic version of IRS paper forms, is available for those who earned more than $64,000. People can use Free File to get an automatic six-month extension to file. An extension to file a tax return, however, is not an extension to pay any taxes owed. April 18 is still the deadline for any taxes owed.

Taxpayers can now use their cell phone or tablet to prepare and e-file a federal tax return through IRS Free File. Access Free File two ways: Use the IRS app, IRS2Go, which has a link to the Free File Software Lookup Tool, or use the device’s browser to go to www.IRS.gov/freefile and select the “Free File Software Lookup Tool” or “Start Free File Now” to find the software product desired. The IRS2Go app is available for Android and iOS devices.

5. Report All Income. Taxpayers must report all of their income from Forms W-2, Wage and Tax Statements, and Forms 1099. Other income may be reportable as well, even if the taxpayer does not receive a statement.

6. Choose Direct Deposit. The fastest and safest way to a refund is to file electronically and choose Direct Deposit. The IRS issues most refunds in less than 21 days.

7. Visit IRS.gov. IRS.gov is an excellent resource. Taxpayers can click on the “Filing” icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. The IRS Services Guide outlines the many ways to get help on IRS.gov.

8. Explore Filing Options. Taxpayers have many options to file. Self-prepare or use a tax preparer. Millions are eligible for free help from a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site. The IRS Directory of Federal Tax Return Preparers provides information on tax professionals including their qualifications and credentials. IRS tools are available 24/7.

9. Check out IRS Publication 17, Your Federal Income Tax, is a complete tax resource. This 300-page guide is available as an eBook as well.

10. Avoid Errors. Taxpayers should take extra time to review their return to file accurately the first time. Mistakes slow down refunds. IRS e-file is the most accurate way to file as using it eliminates many common errors. Paper return filers should check all names, Social Security numbers and sign the tax return.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

 

Free Tax Help Available for the Military

ANNAPOLIS (March 23, 2017) — The Volunteer Income Tax Assistance program provides free tax help to military members and their families. On or off base, VITA is easy to find — even overseas. Keep these five tips in mind about free tax help for the military:

1. Armed Forces Tax Council. The Armed Forces Tax Council directs the military tax programs offered worldwide.

2. Certified Staff. Military VITA-certified employees staff these sites. They receive training on military tax issues, like tax benefits for service in a combat zone. They can help with special extensions of time to file tax returns and to pay taxes or with special rules that apply to the Earned Income Tax Credit.

3. What to Bring. Take the following records to a military VITA site:

• Valid photo identification.
• Social Security numbers for the taxpayer, their spouse and dependents; or individual taxpayer identification numbers (ITINs) or adoption taxpayer identification numbers (ATINs) for those who don’t have Social Security numbers.
• Birth dates for the taxpayer, their spouse and dependents.
• Wage and earning forms, such as Forms W-2, W-2G, and 1099-R.
• Interest and dividend statements (Forms 1099).
• A copy of last year’s federal and state tax returns, if available
• Routing and account numbers for direct deposit of a tax refund.
• Total amount paid for day care and the day care provider’s identifying number. This is usually an Employer Identification Number or Social Security number.
• Other relevant information about income and expenses.

4. Joint Returns. If married filing a joint return, generally both persons need to sign. If both can’t be present to sign the return, they should bring a valid power of attorney form unless eligible for an exception. Publication 501, Exemptions, Standard Deduction, and Filing Information, has more details.

5. Use IRS Free File. Taxpayers with income of $64,000 or less qualify for Free File software. Those with income more than $64,000 can use Free File Fillable Forms. Using the IRS2Go app, a taxpayer can now use their cell phone or tablet to prepare and e-file their federal tax return through IRS Free File.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Comptroller Franchot Honors United Therapeutics with Bright Lights Award

Silver Spring biotech company is a trailblazer among drug manufacturers

SILVER SPRING, Md. (March 22, 2017) – Comptroller Peter Franchot today honored United Therapeutics Corporation with the Bright Lights Award for Innovation and Entrepreneurship for Montgomery County. The award was presented at a ceremony at the company’s Silver Spring headquarters.

“Maryland is home to some of the most innovative and dynamic entrepreneurs in the world, and United Therapeutics is a shining example of the cutting-edge advancements taking place across our great state,” said Comptroller Franchot.

“Following the lead of its founder, Martine Rothblatt, United Therapeutics has been a trailblazer in the field of drug manufacturing. Martine and United Therapeutics have created hundreds of jobs here in Silver Spring, but more importantly, they have improved, and even saved the lives of thousands of people across the globe.”

The Bright Lights Award recognizes and celebrates innovation in the private and nonprofit sectors that strengthen Maryland’s economy, generate jobs and tax revenue and develop new ideas that more effectively deliver services and products within the marketplace. One winner from each of Maryland’s 23 counties and Baltimore City will receive the award.

“It is a great honor to receive the Bright Lights Award. The entrepreneurial spirit is the lifeblood of United Therapeutics. We would not be the company we are today without access to Maryland’s dynamic, highly educated and highly innovative workforce,” said United Therapeutics Chairman and CEO Martine Rothblatt. “We thank Comptroller Franchot and the State of Maryland for encouraging innovation and empowering entrepreneurs throughout Maryland.”

United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening cardiovascular and infectious diseases and cancer. United Therapeutics has been recognized as one of the Top 10 Corporate Citizens in the field of U.S. drug manufacturing.

MEDIA CONTACT: Joe Shapiro 443-871-2244 (cell), 410-260-7305 (office)

 

Comptroller Announces New Office in Greenbelt

Anticipated July opening for new branch that will replace current Landover office

ANNAPOLIS, Md. (March 22, 2017) – Following approval today by the Board of Public Works, Comptroller Peter Franchot announced the July opening of a new branch office in Greenbelt. This location will replace the Landover office, currently located in the Treetops Building at Professional Place.

The Board of Public Works, made up of Lt. Gov. Boyd Rutherford who was filling in for Gov. Larry Hogan, Treasurer Nancy Kopp and Comptroller Franchot, approved a 10-year lease to make the move possible. The new location will provide more space to serve taxpayers, better signage as well as convenient parking and access to transit lines.

“Our Greenbelt office will allow us to broaden the range and scope of taxpayer services we provide and give us additional room to grow to accommodate increased customer demand in the future,” Comptroller Franchot said. “This new office will allow my team of professionals to continue to provide quality services focused on helping Marylanders with their tax questions and concerns.”

The new office will be located at Triangle Centre at 6401 Golden Triangle Drive, Suite 100, Greenbelt, MD 20770. A July opening is expected.

Media Contact: Barbara Sauers, 410-260-7438 (office) and 410-212-9414 (cell)

Caught in the Web: Comptroller Franchot Releases Names of Top Tax Evaders

List Identifies Businesses, Individuals Owing More Than $15 Million Combined

BALTIMORE, Md. (March 20, 2017) – Comptroller Peter Franchot today announced the names of the top 25 businesses and 25 individuals collectively owing $15.7 million in unpaid taxes, penalties and interest to the state of Maryland. As part of the Caught in the Web program, the Comptroller’s Office publishes the top scofflaws on the agency’s website in a public attempt to get those on the list to pay what they owe.

“My office is committed to ensuring that everyone pays their fair share of taxes, as the vast majority of Marylanders do. The Caught in the Web program highlights a small number of individuals and businesses that make a conscious effort to not pay their taxes,” said Comptroller Franchot. “These are not people simply down on their luck and unable to pay. These are people who have chosen to take advantage of the benefits of this great state while thumbing their noses at the taxpayers who fulfill their legal obligations.”

Created to send a message to those who ignore attempts by the state to collect overdue taxes, the Caught in the Web program names tax delinquents owing the largest sum in back taxes on the agency’s website for six months, until payment has been received or a payment plan has been initiated.

Since the program’s inception in 2000, the Comptroller’s Office has collected more than $43.3 million from delinquent taxpayers whose names appeared on one of the agency’s lists. The list of scofflaws unveiled today shows liabilities of nearly $8 million in back taxes, penalties and interest from 25 individuals and $7.7 million from 25 businesses.

When an individual or business fails to pay their Maryland taxes, the Comptroller’s Office initially sends a certified letter listing any unpaid charges incurred for taxes, interest and penalties. If the taxpayer fails to respond, enters into a payment plan, or provides a qualifying reason for having not yet paid, the Comptroller’s Office may then:

• File a lien,
• Garnish wages,
• Prevent renewal of state business license,
• Prevent renewal of professional and occupational licenses,
• Prevent renewal of driver licenses and vehicle registration,
• Attach assets (including bank accounts),
• Intercept state and federal tax refunds,
• File an estimated assessment for taxes due in unreported periods,
• Issue a summons to appear at a hearing to revoke a sales tax license or initiate other
legal processes,
• Suspend state payments if the taxpayer does business with the state,
• Suspend federal payments if the taxpayer does business with the federal government.
Taxpayers who fail to contact the agency to satisfy their tax liability or enter into an agreement to do so are eligible to be included in the Caught in the Web program. These individuals and businesses, which have already had liens filed against them, are notified prior to the list’s posting that they will be included.

List of 2017 Top Individual and Business Tax Evaders

MEDIA CONTACT: Joe Shapiro 443-871-2244 (cell), 410-260-7305 (office)

Owner of Liberty Tax Franchises Pleads Guilty to Conspiracy to Steal from the State

Eight former employees also sentenced as part of fraudulent scheme

BALTIMORE, MD (March 17, 2017) – Maryland Attorney General Brian E. Frosh and Comptroller Peter Franchot today announced Vanessa Kone, owner of four Liberty Tax Service franchises and operator of six stores in Baltimore City, pleaded guilty to Conspiracy to Steal from the State. Baltimore City Circuit Court Judge Alfred Nance sentenced Kone to five years incarceration, all suspended, three years supervised probation, and ordered $38,041 in full restitution and a $10,000 penalty.

In addition to Kone, eight of her former employees also pleaded guilty to taking part in the fraudulent tax scheme. Under Kone’s direction, the managers and preparers in the stores prepared and filed fraudulent federal and state income tax returns, claiming income tax refunds in the names of unwitting taxpayers. As part of the scheme, they claimed the taxpayers earned just enough money from miscellaneous sources to qualify for the maximum earned income tax credit. In fact, none of the taxpayers earned any income, often having been homeless, in drug rehabilitation programs, or disabled.

“Tax preparers have a responsibility to file honest returns,” said Attorney General Frosh. “Ms. Kone and her employees not only took advantage of the most vulnerable in our community, she committed a crime against all of us. The collaboration between the Office of Attorney General and the Comptroller’s Office to combat the crime of tax fraud will continue to result in the prosecution of those who erode the trust in our tax system.”

“My top priority as Comptroller is protecting the integrity of the State’s tax system and combating the explosion of tax fraud,” said Comptroller Franchot. “I want to thank Attorney General Frosh and his team of talented lawyers for their aggressive prosecution that resulted in these guilty pleas. Working together with our state and federal partners, we will continue to hold accountable fraudulent preparers who cheat law-abiding taxpayers.”

The refunds claimed from the federal government and the State of Maryland were electronically processed through Liberty Tax, with the tax preparation fees taken out of the refunds before the net proceeds were distributed to the taxpayer. The fees, on average, equaled approximately 85 percent of the amount being refunded, ranging from $339 to $507 per return with the net fees accrued to the benefit of Vanessa Kone.

Before the tax scheme was blocked, Kone and her co-defendants submitted over 1100 returns to the State of Maryland, claiming over $140,000 in State income tax refunds and over $550,000 in federal income tax refunds. Though the State did ultimately block the filings from Kone’s stores, $38,041in refunds were paid out before the block went into effect.

These cases were before the Circuit Court for Baltimore City.

MEDIA CONTACT: Joe Shapiro 443-871-2244 (cell), 410-260-7305 (office)
Alan Brody, 443-924-1473 (cell), 410-260-7305 (office)

IRS Reminds Taxpayers of April 1 Deadline to Take Required Retirement Plan Distributions

ANNAPOLIS, Md. (March 17, 2017) — The Internal Revenue Service reminds taxpayers who turned age 70½ during 2016 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Saturday, April 1, 2017.

The April 1 deadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. It also typically applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans.

The April 1 deadline only applies to the required distribution for the first year. For all subsequent years, the RMD must be made by Dec. 31. A taxpayer who turned 70½ in 2016 (born after June 30, 1945 and before July 1, 1946) and receives the first required distribution (for 2016) on April 1, 2017, for example, must still receive the second RMD by Dec. 31, 2017.

Affected taxpayers who turned 70½ during 2016 must figure the RMD for the first year using the life expectancy as of their birthday in 2016 and their account balance on Dec. 31, 2015. The trustee reports the year-end account value to the IRA owner on Form 5498 in Box 5. Worksheets and life expectancy tables for making this computation can be found in the appendices to Publication 590-B.

Most taxpayers use Table III (Uniform Lifetime) to figure their RMD. For a taxpayer who reached age 70½ in 2016 and turned 71 before the end of the year, for example, the first required distribution would be based on a distribution period of 26.5 years. A separate table, Table II, applies to a taxpayer married to a spouse who is more than 10 years younger and is the taxpayer’s only beneficiary. Both tables can be found in the appendices to Publication 590-B.

Though the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, some people with workplace plans can wait longer to receive their RMD. Employees who are still working usually can, if their plan allows, wait until April 1 of the year after they retire to start receiving these distributions. See Tax on Excess Accumulation in Publication 575. Employees of public schools and certain tax-exempt organizations with 403(b) plan accruals before 1987 should check with their employer, plan administrator or provider to see how to treat these accruals.

The IRS encourages taxpayers to begin planning now for any distributions required during 2017. An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it for the owner. Often, the trustee shows the RMD amount in Box 12b on Form 5498. For a 2017 RMD, this amount would be on the 2016 Form 5498 that is normally issued in January 2017.

IRA owners can use a qualified charitable distribution (QCD) paid directly from an IRA to an eligible charity to meet part or all of their RMD obligation. Available only to IRA owners age 70½ or older, the maximum annual exclusion for QCDs is $100,000. For details, see the QCD discussion in Publication 590-B.

A 50 percent tax normally applies to any required amounts not received by the April 1 deadline. Report this tax on Form 5329 Part IX. For details, see the instructions for Part IX of this form.

More information on RMDs, including answers to frequently asked questions, can be found on IRS.gov.

Comptroller Branch Office in Landover Open

ANNAPOLIS, Md. (March 17, 2017) – The Comptroller’s Office branch location in Landover is open today following a power outage Thursday that affected the Treetops Building at 818 Professional Place, Suite 101, where the office is located. The office’s regular hours are 8:30 a.m. to 4:30 p.m. daily. Those in need of free state tax assistance can continue to call the taxpayer services line from 8:30 a.m. to 4:30 p.m. at 1-800-MD TAXES, or 410-260-7980.

 

MEDIA CONTACT: Barbara Sauers, 410-260-7438 (office), 410-212-9414 (cell)

Comptroller Branch Office in Landover Closed

Power surge Wednesday evening causes outage at Treetops Building

ANNAPOLIS, Md. (March 16, 2017) – The Comptroller’s Office branch location in Landover is closed today due to a power outage in the area which is affecting the Treetops Building at 818 Professional Place, Suite 101, where the office is located. BGE has been contacted and is working to resolve the issue. Taxpayers may visit Comptroller offices in Annapolis, Upper Marlboro and Wheaton, which are open with regular hours from 8:30 a.m. to 4:30 p.m. daily. Taxpayers in need of free state tax assistance can continue to call the taxpayer services line from 8:30 a.m. to 4:30 p.m. at 1-800-MD TAXES, or 410-260-7980.

 

MEDIA CONTACT: Barbara Sauers, 410-260-7438 (office), 410-212-9414 (cell)