Franchot Announces New ‘Bright Lights Award’

Nominations sought for businesses or nonprofits that emphasize innovation

ANNAPOLIS, Md. (December 21, 2016) – Comptroller Peter Franchot today announced his office is accepting nominations for a new award paying tribute to business and nonprofit leaders and organizations that foster innovation in their fields.

The “Bright Lights Award for Innovation and Entrepreneurship” will recognize and celebrate 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.

“Maryland is well-positioned to lead the nation back to prosperity thanks to the accumulated brainpower in every corner of our state,” said Comptroller Franchot. “It’s important we recognize these innovators who, through their creativity and willingness to assume risk, are changing the way we experience the world.”

Nominations will be accepted through January 31. One winner will be selected from each of Maryland’s 23 counties and Baltimore City. Businesses or nonprofits of any size are eligible for the award. The nomination form, which can be found here, should detail how the candidate is transforming their industry through innovation and what future opportunities may exist to expand its application.

 

Media Contact: Alan Brody, 410-260-6346 (office), 443-924-1473 (cell)

 

Tax Preparedness Series: Tax Records – What to Keep

ANNAPOLIS (December 14, 2016) – As tax filing season approaches, the Internal Revenue Service has information for taxpayers who wonder how long to keep tax returns and other documents.

Generally, the IRS recommends keeping copies of tax returns and supporting documents at least three years. Some documents should be kept up to seven years in case a taxpayer needs to file an amended return or if questions arise. Keep records relating to real estate up to seven years after disposing of the property.

Health care information statements should be kept with other tax records. Taxpayers do not need to send these forms to IRS as proof of health coverage. The records taxpayers should keep include records of any employer-provided coverage, premiums paid, advance payments of the premium tax credit received and type of coverage. Taxpayers should keep these – as they do other tax records – generally for three years after they file their tax returns.

Whether stored on paper or kept electronically, the IRS urges taxpayers to keep tax records safe and secure, especially any documents bearing Social Security numbers. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.

Now is a good time to set up a system to keep tax records safe and easy to find when filing next year, applying for a home loan or financial aid. Tax records must support the income, deductions and credits claimed on returns. Taxpayers need to keep these records if the IRS asks questions about a tax return or to file an amended return.

It is even more important for taxpayers to have a copy of last year’s tax return as the IRS makes changes to authenticate and protect taxpayer identity. Beginning in 2017, some taxpayers who e-file will need to enter either the prior-year Adjusted Gross Income or the prior-year self-select PIN and date of birth. If filing jointly, both taxpayers’ identities must be authenticated with this information. The AGI is clearly labeled on the tax return. Learn more at Validating Your Electronically Filed Tax Return.

Taxpayers who need tax information can request a free transcript for the past three tax years. The ‘Get Transcript’ tool on IRS.gov is the fastest way to get a transcript.

If taxpayers are still keeping old tax returns and receipts stuffed in a shoebox in the back of the closet, they might want to rethink that approach. Keep tax, financial and health records safe and secure whether stored on paper or kept electronically. When records are no longer needed for tax purposes, ensure the data is properly destroyed to prevent the information from being used by identity thieves.

If disposing of an old computer, tablet, mobile phone or back-up hard drive, keep in mind it includes files and personal data. Removing this information may require special disk utility software. More information is available on IRS.gov at How long should I keep records?.

 

IRS Advice to Those with Expiring ITINs: Apply Now to Avoid Refund Delays; Agency Offers Tips To Avoid Common Errors

ANNAPOLIS (December 9, 2016) – The Internal Revenue Service urges any taxpayer with an expiring Individual Taxpayer Identification Number (ITIN) and a need to file a return in the upcoming filing season to file a renewal application in the next few weeks to avoid refund and processing delays. In addition, the IRS encouraged people to check their renewal application, Form W-7, carefully before filing and offered tips for avoiding common errors being seen.

ITINs are used by people who have tax-filing or payment obligations under U.S. law but are not eligible for a Social Security number. Under a recent law change by Congress, any ITIN not used on a tax return at least once in the past three years will expire on Jan. 1, 2017. In addition, any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) also will expire on that date.

This means that anyone with an expiring ITIN should act now to make sure they have a renewed ITIN in time to file a return during the upcoming tax season. Failure to do so will result in refund delays and possible loss of eligibility for some tax benefits.

The IRS said that an ITIN renewal application filed now before the end of the year will be processed before one submitted in January or February at the height of tax season.
Currently, a complete and accurate renewal application can be processed in as little as seven weeks. But this timeframe is expected to lengthen to 11 weeks during tax season.

The IRS reports several common errors being seen in recent weeks that are currently slowing down and holding up some ITIN renewal applications. The mistakes generally center on missing information, and/or insufficient supporting documentation. The tax agency stressed that ITIN renewal applicants should be sure to use the latest version of Form W-7, revised September 2016. This is the version of the form, along with its instructions, currently posted on IRS.gov.

To ensure prompt processing of the form, ITIN renewal applicants should also complete the following steps:

• At the top of the form, be sure to check the box that says, “Renew an existing ITIN.”

• Under, “Reason you’re submitting Form W-7,” every applicant must check one of the eight boxes. If more than one applies, be sure to check the option that best describes the tax purpose for filing the application. Do not write, “ITIN renewal,” in this section of the form, as it is not a valid reason.

• On Line 3, an applicant living outside the United States should enter their foreign address, if different from the mailing address on Line 2. If now living in the U.S., be sure to enter the foreign country of last residence. See the Form W-7 instructions for details.

• Include original supporting and required identification documentation, or certified copies from the issuing agency to prove foreign status and identity.

ITIN renewal applicants also are reminded that only a passport with a U.S. entry date is now acceptable as a stand-alone identification document for dependents. This is a change from past policy. This means that dependent ITIN applicants who use a passport without a date of entry must provide additional documentation, along with the passport, to prove U.S. residency. Acceptable documents include:

• If under age 6, a U.S. medical record.

• If under age 18, a U.S. school record.

• If at least age 18, a U.S. school record for anyone who is a student. Otherwise, anyone 18 and over can provide a rental or bank statement or a utility bill listing the applicant’s name and U.S. address.

Dependents from Canada, Mexico, or dependents of U.S. military personnel stationed overseas are exempt from these additional requirements.

 

IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes

IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes

ANNAPOLIS (December 8, 2016) — As tax season approaches, the Internal Revenue Service, many states, including Maryland, and the tax industry remind taxpayers to be on the lookout for emerging tax scams related to identity theft and refund fraud.

Every tax season, there is an increase in schemes that target innocent taxpayers by email, by phone and online. The IRS and Security Summit partners remind taxpayers and tax professionals to be on the lookout for these deceptive schemes. This reminder is presented to taxpayers during the “National Tax Security Awareness Week.” Some of the most prevalent IRS impersonation scams include:

• Requesting fake tax payments: The IRS has seen automated calls where scammers leave urgent callback requests telling taxpayers to call back to settle their “tax bill.” These fake calls generally claim to be the last warning before legal action is taken. Taxpayers may also receive live calls from IRS impersonators. They may demand payments on prepaid debit cards, iTunes and other gift cards or wire transfer. The IRS reminds taxpayers that any request to settle a tax bill using any of these payment methods is a clear indication of a scam. (IR-2016-99)

• Targeting students and parents and demanding payment for a fake “Federal Student Tax”: Telephone scammers target students and parents demanding payments for fictitious taxes, such as the “Federal Student Tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. (IR-2016-107)

• Sending a fraudulent IRS bill for tax year 2015 related to the Affordable Care Act: The IRS has received numerous reports of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email or letter that includes the fake CP2000. The fraudulent notice includes a payment request that taxpayers mail a check made out to “I.R.S.” to the “Austin Processing Center” at a Post Office Box address. (IR-2016-123)

• Soliciting W-2 information from payroll and human resources professionals: Payroll and human resources professionals should be aware of phishing email schemes that pretend to be from company executives and request personal information on employees. The email contains the actual name of the company chief executive officer. In this scam, the “CEO” sends an email to a company payroll office employee and requests a list of employees and financial and personal information including Social Security numbers (SSN). (IR-2016-34)

• Imitating software providers to trick tax professionals: Tax professionals may receive emails pretending to be from tax software companies. The email scheme requests the recipient download and install an important software update via a link included in the e-mail. Upon completion, tax professionals believe they have downloaded a software update when in fact they have loaded a program designed to track the tax professional’s key strokes, which is a common tactic used by cyber thieves to steal login information, passwords and other sensitive data. (IR-2016-103)

• “Verifying” tax return information over the phone: Scam artists call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a SSN or personal financial information, including bank numbers or credit cards. (IR-2016-40)

• Pretending to be from the tax preparation industry: The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. E-mails or text messages can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information. (IR-2016-28)

If you receive an unexpected call, unsolicited email, letter or text message from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.
If you get a suspicious phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

• Do not give out any information. Hang up immediately.

• Search the web for telephone numbers scammers leave in your voicemail asking you to call back. Some of the phone numbers may be published online and linked to criminal activity.

• Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.

• Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

• If you think you might owe taxes, call the IRS directly at 800-829-1040.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

Upper Marlboro Branch Office Open 12/8

ANNAPOLIS, MD (December 8, 2016) – The Upper Marlboro branch of the Maryland Comptroller’s Office, located in the Bourne Wing of the Prince George’s County Courthouse, has re-opened following a water leak Wednesday afternoon.
The Upper Marlboro branch office is one of 12 locations throughout the state where taxpayers can receive free Maryland income tax assistance. Taxpayers also can receive assistance over the phone by calling Taxpayer Service at 410-260-7980 from Central Maryland or 1-800-MD-TAXES (1-800-638-2937) from elsewhere. For a complete list of branch location, Marylanders can visit www.MarylandTaxes.com

Upper Marlboro Branch Office Closed 12/7

ANNAPOLIS, MD (December 7, 2016) – Due to a water leak in the Bourne Wing of the Prince George’s County Courthouse, where the Upper Marlboro branch of the Maryland Comptroller’s Office is located, the branch office has been closed for the remainder of today. Taxpayers may seek services at the agency’s other locations or by phone.

Taxpayers may visit nearby offices in Landover or Wheaton at:

Landover
Treetops Bldg.
8181 Professional Place, Suite 101
Landover, MD 20785-2226

Wheaton
Westfield Wheaton South Building
11002 Veirs Mill Rd, Suite 408
Wheaton, MD 20902

The Upper Marlboro branch office is one of 12 locations throughout the state where taxpayers can receive free Maryland income tax assistance. Taxpayers also can receive assistance over the phone by calling Taxpayer Service at 410-260-7980 from Central Maryland or 1-800-MD-TAXES (1-800-638-2937) from elsewhere. For a complete list of branch location, Marylanders can visit www.MarylandTaxes.com

 

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

 

Comptroller’s Field Enforcement Officers Seize Nearly $173K in Untaxed Tobacco Products

ANNAPOLIS, Md. (November 17, 2016) – Comptroller Peter Franchot today announced that his Field Enforcement Division (FED) assisted in charges brought against four men from Baltimore and New York. Maryland State Police (MSP) and Maryland Transportation Authority Police (MDTAP) made three separate vehicle stops and FED officers conducted field inspections in the past two weeks, resulting in the confiscation of more than 26,000 packs of contraband cigarettes and more than 5,000 cigars for a total value of nearly $173,000.

“With their fine police work and partnering, the Maryland State Police, the Maryland Transportation Authority Police and my own Field Enforcement Division agents continue to combat illegal cigarette smuggling in our state,” Comptroller Franchot said. “I’d like to thank all of the officers involved for their hard work and efforts to stop this kind of criminal activity.”

In each case, FED officers were notified and responded to each investigation. Those arrested include:

Senauth Deonarain, 41, Brooklyn, N.Y. On Nov. 8, MSP Trooper Matthew Atkinson stopped a 2016 Nissan Pathfinder, with a N.Y. registration, for a traffic violation on Interstate 95, in Perryville, Cecil County. Deonarain faces a felony charge of transporting contraband cigarettes and a misdemeanor charge of possession of contraband cigarettes. FED officers confiscated 6,599 packs of cigarettes, valued at $42,563, and the vehicle. Deonarain was released on personal recognizance.

Young G. Kwon, 59, Baltimore, Md. On Nov. 9, FED agents conducted a routine tobacco retailer inspection at Charlie’s Grocery store at 1100 S. Carey St. in Baltimore. During the inspection, agents found untaxed Other Tobacco Products (OTP) within the store inventory. Kwon, who is the store’s owner, faces a misdemeanor charge of unlawful possession of untaxed OTP. FED agents seized 5,136 cigars, valued at $3,991. The penalty is a maximum of 90 days in jail and a $500 fine.

Walied Thabet, 29, Corona, N.Y. On Nov. 9, MSP Trooper Alan Flaugher stopped a 2016 Ford Explorer, with a Pennsylvania registration, for a traffic violation on I-95 in Perryville, Cecil County. Thabet faces a felony charge of transporting contraband cigarettes and a misdemeanor charge of possession of contraband cigarettes. FED officers seized 9, 410 packs of contraband cigarettes, valued at $60,694, and the vehicle. Thabet was released on personal recognizance.

Mobido Camara, 32, Bronx, N.Y. On Nov. 13, MDTAP Officer Renato Guarnaccia stopped a 2003 Mercury Mountaineer, with Pennsylvania registration, for an equipment violation on I-95 in Baltimore City. Camara faces a felony charge of transporting contraband cigarettes and a misdemeanor charge of possession of contraband cigarettes. FED agents seized 10,160 packs of contraband cigarettes, valued at $65,532, and the vehicle. Camara was released on $7,500 cash bond from the Baltimore City Central Booking facility.

Each arrest on the felony charge carries a penalty of two years in jail and/or a fine of $150 for each carton; and the misdemeanor charge carries a penalty of up to one year in jail and/or a $1,000 fine.

In Fiscal Year 2017, which started July 1, 2016, FED agents have arrested and charged 22 individuals for various tobacco violations after discovering 41 instances of breaches of Maryland’s tobacco laws. The arrests have resulted in the seizure of 42,267 packs of contraband cigarettes, the seizure of 38,213 sticks of OTP, valued at $308,624.

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

Statement of Comptroller Peter Franchot Regarding Local Income Tax Payments

Annapolis, Md. (November 16, 2016) – Today, Comptroller Peter Franchot shared the results of a comprehensive outside audit of payments by the Comptroller of Maryland to counties, municipalities and special taxing districts for the tax years 2010-2014 at the Joint Committee on the Management of Public Funds. Comptroller Peter Franchot released the following statement:

“In the Comptroller’s Office, we pride ourselves in the national reputation we’ve earned as one of the pre-eminent state tax administrators in the United States, and remain dedicated every day to a steadfast commitment to respect, responsiveness, and results. It is in that spirit, that when we were made aware of a small number of issues related to local income tax distributions, we immediately acknowledged it, promptly conducted an internal review, and commissioned an independent audit to determine the entirety of the issue.

“That independent audit has just been completed and it concluded that for tax years 2010 to 2014, our office had a 99.9 percent accuracy rate. While I believe that a 99.9 percent accuracy rate affirms the hard work of the men and women who work with me every day, it doesn’t meet the high standards we set for ourselves.

“The independent audit, which my office conducted proactively, identified discrepancies with $12.7 million out of the $14.9 billion in local income tax revenue we processed for those five tax years. We are currently contacting the affected jurisdictions directly, and those jurisdictions that are owed money will receive payment within days. For those jurisdictions that owe money as a result of this reconciliation process, we are mitigating the financial impacts by providing ample time for long-term budget planning. Those jurisdictions will not have to begin repaying what is owed until 2024, and they will have the flexibility to repay the funds over the course of ten years from that point forward.

“This review has been an instructive process for us in the Comptroller’s Office, providing an opportunity to redouble our commitment to improve the way we deliver results on behalf of Maryland’s taxpayers. In order to get the 99.9 percent effectiveness rate we currently have to the 100 percent we aspire to achieve, I have implemented a new initiative called “Project Perfect.” This agency-wide effort involves making necessary technological upgrades and procedural modifications to ensure our system is equipped for our unique taxpayer coding needs, performing comprehensive, independent biennial audits and continuously verifying taxpayer addresses, among other enhancements to our tax administration procedures.

“Maryland is unique in the country in the way our Comptroller’s Office collects local income taxes on behalf of every one of the State’s counties, municipalities and special taxing districts. I truly appreciate the continued collaboration with our local government partners – including the Maryland Municipal League and the Maryland Association of Counties – whose effective partnership allows us to carry out this complex taxing structure to benefit our state’s taxpayers.”

MEDIA CONTACTS: Peter Hamm, 410-260-7060 (office) or 443-414-3083 (cell)
Alan Brody, 410-260-6346 (office) 443-924-1473 (cell)

 

Hogan and Franchot to kick off Shop Maryland for the Holidays in Ellicott City

Annual Statewide Holiday Tour to Promote Local Retailers and Eateries

ANNAPOLIS, Md. (November 14, 2016) – With Marylanders busily checking off items on their holiday gift lists, Comptroller Peter Franchot encourages residents to Shop Maryland for the Holidays as he and Governor Larry Hogan begin the 2016 statewide holiday shopping tour in Ellicott City on Monday, November 28.

“Shopping at a local business helps more than 750,000 of our neighbors and friends who make up Maryland’s retail sector,” Comptroller Franchot said. “Holidays are about families and friends spending time together and giving back to our communities. Shopping at local stores and patronizing neighborhood restaurants benefits our local economies and promotes Maryland-owned businesses.”

With one in five Marylanders directly or indirectly working in retail, the holiday shopping season is important to retailers throughout the state. The industry contributes more than $46 billion to the state’s economy, making it the state’s top private-sector employer, according to the Maryland Retailers Association.

“Shopping local is important not just around the holiday season, but year-round,” said Cailey Locklair Tolle, president of the Maryland Retailers Association. “Online shopping may seem appealing, but your community brick-and-mortar stores hire your neighbors, provide much-needed tax revenue for the things we all care about and give back to communities in many ways. As the No. 1 private sector job provider in the state, the best way to reinvest in Maryland is to shop local.”

The Comptroller will be joined by Ms. Tolle for some of the Shop Maryland visits, as well as elected, business and civic leaders in each community.

The Shop Maryland for the Holidays tour schedule is as follows:
• Ellicott City, November 28
• Cumberland, November 30
• Salisbury and Cambridge, December 2
• Frederick, December 5
• Hyattsville and Bethesda, December 6
• Baltimore, December 8
• La Plata, December 9

Details about each visit will follow.

Comptroller Franchot reminds consumers that in-state shopping puts citizens’ hard-earned money back into their communities and supports local businesses that employ friends and neighbors. He also believes “shopping locally gets consumers the best product, service and experience for their dollar.”

 

MEDIA CONTACT: Peter Hamm, (410) 260-7060 (office), (443) 414-3083 (cell)

Alan Brody (410) 260-6346 (office), (443) 924-1473 (cell)

Comptroller to Convene Taxpayer Security Summit in January at University of Baltimore

State & Federal Tax Administrators, Private Sector and Consumer Advocates
Will Discuss Ongoing Initiatives and Future Strategies to Combat Fraud, ID Theft

BALTIMORE, Md. (November 9, 2016) – Maryland Comptroller Peter Franchot announced today that his agency will host a Taxpayer Security Summit in January, which will convene a diverse group of government officials, private industry leaders and consumer protection advocates to share information on the new and disturbing forms of income tax fraud that are confronting tax administrators and challenging information technology teams in states across the nation.

“At a time when millions of Americans have been directly affected by fraud, identity theft, data breaches and other financial crimes, the security of the Maryland taxpayer is my defining priority as Comptroller,” Franchot said. “As part of our fight, we will convene federal and state tax administrators, local officials, private industry leaders and consumer protection advocates for a summit. We will frame the magnitude of the challenge and discuss what is being done – as well as additional actions that can and must be taken – to protect the safety and hard-earned money of taxpayers in Maryland and everywhere else.” He thanked the University of Baltimore for agreeing to host the meeting.

Scheduled for January 19, 2017, at the University of Baltimore, the summit will feature presentations from federal and state tax administrators, private industry leaders and consumer protection advocates who will discuss ongoing initiatives and future strategies to identify and combat tax fraud in its many forms.

The event is free and open to the public and interested parties may register at: www.taxpayersecuritysummitmd.eventbrite.com.

Since the beginning of this year, the Maryland Comptroller’s office has stopped accepting income tax returns from 61 companies doing business in 68 locations, including 23 different Liberty Tax Service franchises, for submitting numerous highly suspicious returns. Collectively, they filed thousands of state returns that the agency believes to be fraudulent. Not one of those businesses has met with Comptroller’s office officials to clarify the submitted returns that led to their ban.

MEDIA CONTACTS: Peter Hamm, 410-260-7060 (office) or 443-414-3083 (cell)
Alan Brody, 410-260-6346 (office) 443-924-1473 (cell)