Comptroller’s Office Prevents $1.1 Million in Fraudulent Income Tax Returns

Detecting Bogus Filings Remains Top Priority for Agency

ANNAPOLIS, Md. (February 14, 2017) – With the tax filing season under way less than a month, Comptroller Peter Franchot today announced that his office has detected more than $1.1 million in fraudulent requests from 760 income tax filers. The tax season began January 23.

“Tax fraud and identity theft represents the single greatest risk facing taxpayers today,” Comptroller Franchot said. “My team of highly-skilled fraud detectors uses state-of the-art technology to identify fraud while processing returns. Guarding honest Marylanders’ hard-earned money and keeping it safe remains a top priority for me and the members of my team.”

With more than 580,000 electronic and paper returns processed so far this season, Comptroller Franchot urges Marylanders to file electronically as it’s the most secure and efficient way to submit a tax return. Most Marylanders who file electronically receive their state refunds within three business days.

In the past three weeks, the Comptroller has:

• Announced 20 tax preparers added to last year’s list of 68 locations in which his office has stopped processing returns.
• Warned Maryland taxpayers and business about a W-2 phishing scam.
• Announced four indictments in tax fraud schemes with Attorney General Brian Frosh.

Since becoming Comptroller ten years ago, the Comptroller’s Questionable Returns Detection Team has blocked nearly 76,000 fraudulent returns worth more than $174 million.

The tax filing deadline this year is Monday, April 18, 2017, rather than the traditional April 15 date. Marylanders can file their state tax returns electronically through the state’s free iFile system, which can be accessed online at www.marylandtaxes.com. A list of other approved vendors to file electronically can also be found on the website.

Free state tax assistance is available at all of the Comptroller’s 12 taxpayer service offices, Monday through Friday, 8:30 a.m. to 4:30 p.m. For more information on any tax-related matter, visit www.marylandtaxes.com, call 1-800-MD-TAXES (1-800-638-2937) or 410-260-7980 in Central Maryland, or email taxhelp@comp.state.md.us.

MEDIA CONTACT: Joe Shapiro, 410-260-7305 (office), 443-871-2244 (cell)
Alan Brody, 410-260-6346 (office), 443-924-1473 (cell)

Comptroller Franchot Halts Returns from Twenty Tax Preparers amid Pattern of Questionable Filings

Move Effective Immediately Pending Investigation

ANNAPOLIS, MD (February 9, 2017) – Moving aggressively to protect Maryland taxpayers, Comptroller Peter Franchot today announced that his office has immediately suspended processing electronic tax returns from 20 paid tax preparers due to a high volume of questionable returns received.

“Protecting Maryland taxpayers and detecting fraudulent returns are our top priorities,” said Comptroller Franchot. “We are resolute in our efforts to ensure that the tax refunds we send out are legitimate and go to the people who have earned them. I want to thank my Questionable Return Detection Team who works tirelessly to root out the returns that try to cheat our state and steal from all Marylanders.”

The businesses, which have been sent written notice of the action, were identified by the Comptroller’s nationally recognized fraud unit using state-of-the-art technology that allows the Comptroller’s Office to detect fraud while processing returns. These 20 preparers join the 68 businesses blocked last year. Although, the agency’s review process provides an opportunity for the blocked preparers to restore their filing privileges, to date, none of the previously suspended tax preparers has had these privileges restored.

Comptroller Franchot, pursuant to the recently signed IRS Security Memorandum of Understanding (“MOU”), has shared this information with other tax agencies. The Comptroller’s Office also has advised the Office of the Attorney General and the Department of Labor, Licensing and Regulation of the decision, so that they can take any additional appropriate actions.

“Guarding against tax fraud schemes and fraudulent returns are the biggest challenges facing tax administrators across the country,” added Comptroller Franchot. “My office will continue to use every tool at our disposal to ensure the safety and accuracy of Maryland’s tax filing systems.”

The tax preparers blocked from filing returns by today’s actions are:

Vasquez Tax Services, 2340 University Ave., Hyattsville, MD 20783
OSE Tax Services, 5006 Harford Road, Baltimore, MD 21214
ALR Tax and Financial Services LLC, 76 Ritchie Road, Capitol Heights, MD 20743
OFAB LLC, 3938 Minnesota Ave., Washington, DC 20019
Monique’s Taxprep Services LLC, 4342 Tucker Circle, Halethorpe, MD 21227
Express Tax Inc., 5501 York, Road, Baltimore, MD 21212
KLS Tax Services, 18431 Shanna Drive, Accokeek, MD 20607
Liberty Tax Service, 5436 Marlboro Pike, District Heights, MD 20747
Quick Tax Service, 1809 1/2 Pennsylvania Ave., Baltimore, MD 21217
PROTAXEM, 3104 N. Greenmount SVE, Baltimore, MD 21218
HRQT LLC, 2136 Harford Road, Baltimore, MD 21218
Quick Tax, 2401 Liberty Heights Road, Baltimore, MD 21215
Quick Money Tax Service, 6628 Harford Road, 2nd floor Baltimore, MD 21214
JAE Establishments LLC, 3803 Gettysburg Road, Camp Hill, PA 17011
One Vision First (OVF) Consulting LLC, 8120 Fenton St., Suite 301b, Silver Spring, MD
Tax Maid, 2558 Pratt St., Baltimore, MD 21223
Eltonia Tax & Contract Service LLC, 8058 Philadelphia Road, Baltimore, MD 21237
Tax Plus, 727 Northrop Lane, Middle River, MD 21220
Quality Tax Service, 6 Woodstream Court, Owings Mills, MD 21117
Patricia’s Bookkeeping and Accounting, 227 Mysticwood Road, Reisterstown, MD 21136

Below is a list of the tax preparers the Comptroller’s Office blocked last year:

Anne Arundel County
Liberty Tax Service, 7565 Ritchie Highway, Glen Burnie

Baltimore (City)
AO Tax Services, 2307 E. Monument St.
AO Tax Services, 3231 Belair Road
B and B Tax Service, 4707 Harford Road
DE Brown, 36 E 25th St.
EB Tax Service, 2322 Monument St.
EB Tax Service, 1818 Pennsylvania Ave.
EMACK Tax Service, 123 W. Saratoga St.
Hartley Financial Enterprises LLC, 4602 Hampnett Ave.
Liberty Tax Service, 3343 Belair Road
Liberty Tax Service, 3414 Eastern Ave.
Liberty Tax Service, 3308 Greenmount Ave.
Liberty Tax Service, 200 N. Highland Ave.
Liberty Tax Service, 503 W. Lexington St.
Liberty Tax Service, 2401 Liberty Heights Ave.
Liberty Tax Service, 1742 W. North Ave.
Liberty Tax Service, 1808 Pennsylvania Ave.
Liberty Tax Service, 2039 W. Pratt St.
Loyalty Tax Services, 4602A Harford Road
Office Tax Solutions, 2230 E. Monument St.
Office Tax Solutions, 1439 W. Patapsco Road
People Tax Service (aka Neighborhood Tax Services), 3219 Belair Road
Tax Rite Services, 3406 Belair Road
Fachel Tax Service, 6331 Belair Road, Baltimore
TA Income Tax Service, 4833 Belair Road, Baltimore
JMD Tax Service, 2700 W. Franklin St., Baltimore
Marcjeze Tax Services, 5864 B Belair Road, Baltimore
Bodmars Tax Service, 4903 Belair Road, Baltimore
MK Tax Services and Investment LLC, 1031 W. Baltimore St., Baltimore
Neighborhood Tax Services, also known as Royal Auto Sales N Neighborhood Tax or People Tax Services at 3219 Belair Road, Baltimore and 3226 Belair Road, Ste. A, Baltimore
Chimex Tax Service, 2654 Maryland Ave., Baltimore
Jovan LLC, 5225 Harford Road, Baltimore
Taxcare , 6711 Belair Rd, Ste. B , Baltimore MD 21206

Baltimore County
Liberty Tax Service, 435 C Eastern Blvd., Essex
Liberty Tax Service, 201 Back River Neck Road, Middle River
REMG Inc., 8715 Windsor Mill Road, Windsor Mill
Tax Rite Services, 90 Shawgo Court, Middle River
Phenomenal Tax Service Corp., 1055 Ingleside Ave, Ste. 100, Baltimore
Swift Pro Tax Service, 10 Pine Cone Court, Nottingham

District of Columbia

Taxtime LLC/Speedy Tax Service,1002 H St., NE Washington DC 20002
Fred Accounting & Tax Services, 760 Morton St. NW, Washington, D.C.
Swift Tax Service, 1012 H St. NE, Washington, DC, and 3905 Benning Road NE, Washington, DC

Harford County
Liberty Tax Service, 2927 Emmorton Road, Abingdon

Montgomery County
Liberty Tax Service, 11262 Georgia Ave., Wheaton
Broadview Advisors and Co., Inc., 8757 Georgia Ave, Ste. 440, Silver Spring

Prince George’s County

ICS Tax & Accounting Service , 8855 Annapolis Rd., Ste. 205, Lanham, MD 20703
Deldan Tax and Accounting Services, 9208 Fairlane Place, Laurel
Tax Relief Solution, 13042 Old Stagecoach Road, Laurel
Liberty Tax Service, 8020 New Hampshire Ave., Langley Park
Irene’s Taxes, 4610 Winterberry Lane, Oxon Hill
Griffin Financial, 1424 Colony Road, Oxon Hill
J & J Tax Service, 17205 Summerwood Lane, Accokeek
Tax Central USA, 5515 Livingston Road, Ste. 200, Forest Heights
The Tax Store 101 LLC, 1508 Kingshill St., Bowie
Taxpoint Solutions,1401 Mercantile Ln, Ste. 383, Upper Marlboro MD 20774

Worcester County
Charles Multi Services, 216 Carson Court, Pocomoke City

Out-of-State
Evaniel Francois, 2124 Airport Road, Ste. 109, Naples, FL 34112
Eskindes Accounting and Tax LLC, 3379 Highway 5, Ste. K, Douglasville, GA 30135
Verita’s Efile Service Inc., 3 Centerview Drive, Greensboro, NC 27407, and 5720 Alameda, Baltimore, MD 21239

Taxpayers should carefully review their returns for these issues and should be suspicious if a preparer:

• Deducts fees from the taxpayer’s refund to be deposited into the tax preparer’s account,
• Does not sign the tax return, or,
• Fails to include the Preparer Taxpayer Identification number “P-TIN” on the return.

If taxpayers suspect fraud, they are asked to immediately report the issue to the Comptroller’s Office by calling 1-800-MD-TAXES (1-800-638-2937) or 410-260-7980 in Central Maryland or by emailing TAXHELP@comp.state.md.us.

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

Comptroller Accepting Nominations for the 2017 William Donald Schaefer Helping People Award

Sixth Year of Honoring Individuals and Organizations Statewide

ANNAPOLIS, Md. (February 8, 2017) – Comptroller Peter Franchot announced today that his office is now accepting nominations for the 2017 William Donald Schaefer Helping People Award. Established in 2012, the award honors the unparalleled legacy of public service left by former Mayor, Governor and Comptroller Schaefer and is presented in each of Maryland’s 23 counties and Baltimore City to individuals and organizations with an unwavering commitment to helping people.

“William Donald Schaefer was a role model for many citizens and organizations helping neighbors and strangers throughout our great state,” Comptroller Franchot said. “Every day, hundreds of Marylanders sacrifice their own time to aid vulnerable populations or those in need. It is a privilege to recognize their selfless contributions.”

Award recipients will be selected on their demonstration of:

• Improving the community;
• Promptly responding to a citizen problem through effective government intervention;
• Directly aiding our most vulnerable populations; or,
• Establishing a public/private partnership to improve the lives of fellow Marylanders.

Comptroller Franchot will personally present the award to each winner starting in April.

The 2017 nomination form must be submitted by March 31.

Call 410-260-7801 if you have additional questions.

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

IRS: Don’t Fall for Scam Calls and Emails

ANNAPOLIS, MD (February 7, 2017) — Scams continue to use the IRS as a lure. These tax scams take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. Scammers use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with these scams.

Taxpayers need to be wary of phone calls or automated messages from someone who claims to be from the IRS. Often these criminals will say the taxpayer owes money. They also demand payment right away. Other times scammers will lie to a taxpayer and say they are due a refund. The thieves ask for bank account information over the phone. The IRS warns taxpayers not to fall for these scams.

Below are several tips that will help filers avoid becoming a scam victim.
IRS employees will NOT:

• Call demanding immediate payment. The IRS will not call a taxpayer if they owe tax without first sending a bill in the mail.
• Demand payment without allowing the taxpayer to question or appeal the amount owed.
• Require the taxpayer pay their taxes a certain way. For example, demand taxpayers use a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to contact local police or similar agencies to arrest the taxpayer for non-payment of taxes.
• Threaten legal action such as a lawsuit.

If a taxpayer doesn’t owe or think they owe any tax, they should:

• Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
• Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.

In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails link to sham websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they get what they’re after, they use it to steal a victim’s money and their identity.

For those taxpayers who get a ‘phishing’ email, the IRS offers this advice:

• Don’t reply to the message.
• Don’t give out your personal or financial information.
• Forward the email to phishing@irs.gov. Then delete it.
• Do not open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov.

 

Comptroller Franchot Warns Taxpayers of Dangerous W-2 Phishing Scam

School districts, Tribal casinos, Chain Restaurants, Temporary Staffing Agencies, Healthcare, Shipping and Freight industries Now Being Targeted

ANNAPOLIS, MD (February 3, 2017) – Comptroller Peter Franchot is warning taxpayers about a W-2 phishing scam targeting schools, restaurants, hospitals, tribal groups and others. The Comptroller said his agency and Internal Revenue Service are alerting employers that the Form W-2 email phishing scam has moved beyond businesses to school districts, tribal organizations and nonprofits. The W-2 scammers also are trying to steal employee W-2 information with an older scheme on wire transfers, which can victimize organizations twice.

“My agency is committed to protecting Maryland taxpayers and stays vigilant for email phishing scams that seek to steal people’s private financial information. These types of crime can lead to fraudulent tax returns, identity theft and can devastate the victims’ financial well-being,” Comptroller Franchot said.

Cybercriminals are using various spoofing techniques to disguise an email to make it appear as if it is from a company or an organization’s executive. The email is sent to an employee in the payroll or human resources departments, requesting a list of all employees and their Forms W-2.  The IRS says the W-2 scam, which first appeared last year, has started earlier this tax season and affects a broader cross-section of organizations. Businesses that received the scam email last year also are reportedly receiving it again this year. Cybercriminals then follow up with an “executive” email to the payroll or corporate comptroller asking that a wire transfer also be made to a certain account.

The Comptroller’s Office advises taxpayers not to reply to emails asking for confidential information, most especially Social Security numbers, birth dates, salary information or home address.  Maryland taxpayers may call 1-800-MD-TAXES or send an email to mdcomptroller@comp.state.md.us to report a problem.

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

Phishing Schemes Lead IRS “Dirty Dozen” List of Tax Scams for 2017; Remain Tax-Time Threat

ANNAPOLIS (February 2, 2017) — The Internal Revenue Service warns taxpayers to watch for fake emails or websites looking to steal personal information. These “phishing” schemes continue to be on the annual IRS list of “Dirty Dozen” tax scams for the 2017 filing season.

The IRS saw a big spike in phishing and malware incidents during the 2016 tax season. New and evolving phishing schemes already have been seen this month as scam artists work to confuse taxpayers during filing season. The IRS has seen email schemes in recent weeks targeting tax professionals, payroll professionals, human resources personnel, schools as well as average taxpayers.

In these email schemes, criminals pose as a person or organization the taxpayer trusts or recognizes. They may hack an email account and send mass emails under another person’s name. They may pose as a bank, credit card company, tax software provider or government agency. Criminals go to great lengths to create websites that appear legitimate but contain phony log-in pages. These criminals hope victims will take the bait and provide money, passwords, Social Security numbers and other information that can lead to identity theft.

IRS Commissioner John Koskinen said taxpayers should avoid opening surprise emails or clicking on web links claiming to be from the IRS and shouldn’t be fooled by unexpected emails about big refunds, tax bills or requesting personal information. Scam emails and websites also can infect a taxpayer’s computer with malware without the user knowing it. The malware can give the criminal access to the device, enabling them to access all sensitive files or track keyboard strokes, exposing login information.

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or find people to help with their taxes.

For those perpetrating these schemes, the scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shut down scams and prosecute the criminals behind them.

It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help protect taxpayers from email scams.

For more information, visit IRS.gov.

Comptroller Franchot Urges Marylanders to Shop Maryland Energy, February 18-20

Six Percent Sales Tax Waived on Qualifying ENERGY STAR Products

ANNAPOLIS, MD (February 1, 2017) – Comptroller Peter Franchot is urging Marylanders to take advantage of big savings as part of the annual Shop Maryland Energy weekend. From Saturday, February 18, through Monday, February 20, consumers will not pay the state’s six percent sales tax on qualifying ENERGY STAR appliances.

In the coming weeks, Comptroller Franchot will make several stops across the state to promote the tax-free weekend, now in its eighth year.

“Shop Maryland Energy weekend is a win for all Marylanders,” Comptroller Franchot said. “Consumers can save hundreds of dollars, businesses make more sales and ENERGY STAR products are good for the environment.”

During the Shop Maryland Energy event, air conditioners, washers and dryers, furnaces, heat pumps, standard-size refrigerators, compact fluorescent light bulbs (CFL), dehumidifiers and programmable thermostats that have been designated as meeting or exceeding the applicable ENERGY STAR efficiency requirements developed by the U.S. Environmental Protection Agency and the U.S. Department of Energy will be tax-free.

The ENERGY STAR, a U.S. Environmental Protection Agency program, was established in 1992 to reduce levels of greenhouse gas emissions and other harmful pollutants caused by the inefficient use of energy. The ENERGY STAR label assists consumers in identifying energy-efficient products that offer savings on energy bills without sacrificing performance, features of comfort.

A list of ENERGY STAR items may be found at: www.energystar.gov. For more information, visit the Comptroller of Maryland’s Web site, www.marylandtaxes.com, e-mail TAXHELP@comp.state.md.us, or call 410-260-7980 in Central Maryland, or toll-free, 1-800-MD-TAXES.

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

IRS Reminder: Employers Must File Forms W-2 by Jan. 31 This Year

ANNAPOLIS (January 31, 2017)  ― The Internal Revenue Service reminds employers that today is the due date for filing Forms W-2, the Wage and Tax Statement for their employees for calendar year 2016. Also, those who hire contract workers and have to file Form 1099-MISC now must file by Jan. 31.

The new deadline applies whether an employer e-files or files a paper Form W-2. Employers who pay an employee $600 or more for the year must file a Form W-2 for each employee with the Social Security Administration. The new deadline is part of legislation signed into law at the end of 2015 to combat identity-theft related refund fraud.

The Social Security Administration encourages all employers to e-file their Forms W-2 by using its Business Services Online.  Employers who file paper Forms W-2 should file them with the Social Security Administration, Data Operations Center, Wilkes-Barre, PA 18769-0001.

E-filing can save time and effort and helps ensure accuracy. Employers must e-file if they file 250 or more Forms W-2 or W-2c. Employers who are required to e-file but fail to do so may incur a penalty. E-filing can save time and effort and helps ensure accuracy.

The IRS projects that employers will file more than 250 million Forms W-2 this year; the vast majority will be e-filed.

The new rule does not affect the filing deadline for other types of Form 1099 or Forms 1097, 1098, 3921, 3922, or W-2G, which are filed on paper by Feb. 28, 2018, or by April 2, 2018 if filed electronically.

For more information, visit IRS.gov.

Attorney General Frosh, Comptroller Franchot Announce Indictments in Tax Fraud Schemes

Individuals Allegedly Stole Thousands of Dollars from the State

BALTIMORE, MD (January 26, 2017) – Maryland Attorney General Brian E. Frosh and Comptroller Peter Franchot today announced the filing of four criminal cases against four defendants who allegedly stole tens of thousands of dollars from the State of Maryland through tax fraud schemes. The cases announced today demonstrate the Attorney General’s and Comptroller’s commitment to identifying and prosecuting perpetrators who steal Maryland tax money through fraudulent schemes.

“Tax preparers have a special knowledge and a special responsibility to file honest returns,” said Attorney General Frosh. “It’s bad when anyone tries to cheat on their tax returns. When it is a tax preparer, it is inexcusable. The collaboration between the Office of Attorney General and the Comptroller’s Office to combat the problem of fraudulent tax schemes has resulted in the prosecution of those who erode the trust in our tax system.”

“I am personally grateful to Attorney General Frosh and his team for their tireless work toward securing these indictments,” said Comptroller Franchot. “Tax fraud and identity theft pose an immediate threat to the financial security of taxpayers throughout the State of Maryland and across the country. The Maryland Comptroller’s Office is committed to using all of our resources to protect Marylanders from the consequences of these financial crimes. The indictments today send a strong message that we will work together with the Maryland Attorney General’s Office and all law enforcement agencies to fight criminals who attempt to defraud the state and harm law-abiding taxpayers.”

The cases announced today include:

• State of Maryland v. Darwin Acosta
On January 20, 2017, an Anne Arundel County grand jury returned a two-count indictment against Darwin Acosta, 30, of Prince George’s County. According to the allegations contained in the indictment, between March 2014 and June 2014, Acosta prepared and filed fraudulent tax returns with the Comptroller using the personal identifying information of numerous victims. Through the filing of the fraudulent returns, Acosta unlawfully had approximately $53,700.73 of tax refunds deposited into his personal bank account. Acosta has been charged with one count of felony theft scheme between $10,000 and $100,000, and one count of identity fraud.
(MORE)

• State of Maryland v. Rochelle Cunningham
On January 20, 2017, an Anne Arundel County grand jury returned an 11-count indictment against Rochelle Cunningham, 46, of Baltimore City. According to the allegations contained in the indictment, between March 2005 and April 2009, Cunningham obtained the personal identifying information of numerous victims and used that information to file fraudulent tax returns with the Comptroller in the names of the victims. By filing the fraudulent returns, Cunningham unlawfully had deposited over $80,000 of tax refunds into various bank accounts she controlled. Cunningham has been charged with one count of felony theft scheme between $10,000 and $100,000, and 10 counts of identity fraud.

• State of Maryland v. Scott Jacobson
On January 20, 2017, an Anne Arundel County grand jury returned a 16-count indictment against Scott L. Jacobson, 38, of Baltimore County. According to the allegations contained in the indictment, during the 2014 tax filing season, Jacobson operated a tax return preparation business through which he prepared and filed fraudulent federal and state tax returns for clients, claiming fraudulently inflated tax refunds. Through the filing of the inflated tax refund claims, Jacobson unlawfully obtained more than $10,000 in State tax refunds. Jacobson has been charged with 13 counts of false return preparation, counts for theft and attempted theft, and one count of filing a false personal income tax return.

• State of Maryland v. Evelyn Thompson
On January 24, 2017, the Attorney General filed a criminal information against Evelyn Thompson, 54, of Prince George’s County. According to the allegations contained in the information, between January 2014 and April 2016, Thompson, who was not registered as a licensed tax preparer in Maryland, prepared and filed fraudulent tax returns with the Comptroller on behalf of numerous Maryland residents. In most of the returns, Thompson included false information to fraudulently increase the tax refunds her taxpayer clients would receive. Thompson also charged her clients a fee for the preparation and filing of their tax returns. Thompson, however, did not report the fees received on her personal income tax returns. She also included false information on her personal tax returns to fraudulently inflate the tax refunds she received. Thompson has been charged with one count of felony theft scheme between $10,000 and $100,000.

Attorney General Frosh and Comptroller Franchot commended the investigative efforts of the Comptroller’s Field Enforcement and Revenue Administration Divisions, and the Attorney General’s Criminal Investigations Division, along with the Maryland State Police. The cases are being prosecuted by the Attorney General’s Office.

An indictment or information is only an accusation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

 

COMPTROLLER’S OFFICE CONTACT: Alan Brody 410-260-6346 (office) or 443-924-1473 (cell)

 

Governor Hogan, Comptroller Franchot Announce Taxpayer Protection Act of 2017

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)