Legislation will strengthen efforts to prevent tax fraud, protect taxpayers
ANNAPOLIS, MD (January 19, 2017) – Governor Larry Hogan and Comptroller Peter Franchot today announced their support and plans for the administration to introduce the Taxpayer Protection Act of 2017, legislation that will provide greater protections to Maryland taxpayers from tax fraud and identity theft. The proposed legislation will strengthen the ability of the Office of the Comptroller to prevent tax fraud, protect taxpayer information, and hold fraudulent filers and tax preparers accountable.
“Tax fraud is real, it’s unacceptable, and it often unfairly targets some of our most vulnerable citizens,” said Governor Hogan. “This legislation makes key reforms to protect Marylanders from predatory tax practices and safeguard taxpayers’ private information.”
“As Comptroller, my top priority continues to be protecting taxpayers from the devastating consequences of tax fraud and identity theft,” said Comptroller Franchot. “The provisions in the Taxpayer Protection Act will grant my office additional statutory powers that bolster our existing efforts to prevent financial criminals from preying on innocent and hardworking Marylanders.”
During his remarks at the Taxpayer Security Summit at the University of Baltimore on Thursday, Comptroller Franchot thanked Governor Hogan for including the Taxpayer Protection Act as part of his administration’s legislative package. The summit – which included state and federal tax administrators, private sector leaders, and consumer advocacy groups – focused on how the public, private, and nonprofit sectors can work collaboratively to combat tax fraud in Maryland.
Since 2007, the Comptroller’s Office has identified and blocked more than 76,000 fraudulent returns – worth more than $174 million – from being processed. The Comptroller’s Questionable Returns Detection Team (QRDT) utilizes an analytics-driven fraud detection model that has enhanced the agency’s ability to identify potential fraudulent tax returns. In 2016, the Comptroller’s Office received national awards from Drexel University, CIO.com, and StateScoop, which recognized the effectiveness of the agency’s fraud detection technology.
The Taxpayer Protection Act will build upon the Comptroller’s Office’s existing efforts to aggressively combat tax fraud. The legislation will allow the Comptroller’s Office and the State of Maryland to keep pace with the rapidly increasing fraud schemes and growing threats to sensitive data. The bill grants additional statutory responsibilities to the Field Enforcement Division of the Comptroller’s Office to investigate potential incidents of tax fraud and allow the agency to seek injunctions against tax preparers suspected of fraudulent and criminal practices in an effort to protect consumers from financial harm.
In addition, the legislation extends the statute of limitations for tax crimes to six years from the current three years, matching the statute of limitations under the Internal Revenue Code for federal tax crimes. This extension will allow sufficient time to properly investigate fraud cases, which often involve highly sophisticated schemes.
The bill also seeks to hold unscrupulous tax preparers accountable by placing greater legal responsibility on predatory tax preparers who use unknowing taxpayers to commit fraud. The legislation adds a penalty for fraudulent tax return preparers and provides legal authority to issue injunctions against fraudulent tax preparers in order to protect consumers during ongoing investigations.
Furthermore, the Taxpayer Protection Act prohibits tax professionals from employing an individual to provide tax preparation services who is not registered with the Board of Tax Preparers through the Department of Labor, Licensing, and Regulation. Finally, the bill authorizes the Office of the Comptroller to disclose certain tax information to the State Board of Individual Tax Preparers, the U.S. Internal Revenue Service, and the U.S. Department of Justice. This provision allows the Comptroller’s Office to work with state and federal government entities to take swift legal action against tax return preparers who have been found to have been engaging in fraudulent activity.
MEDIA CONTACTS: Alan Brody, 410-260-6346 (office) 443-924-1473 (cell)