State of Maryland Collection Activities for Delinquent Business Taxes

Ian Jackson
November 22, 2012 — 2,008 views  
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The Comptroller of Maryland is a taxing authority that is sanctioned to collect taxes on behalf of the state of Maryland. If a business fails to file a tax return or make a payment, the Comptroller issues a letter called a Statement of Account, in which it provides detailed information about any missing returns, tax due portion on delinquent returns, as well as penalties and interest that have accumulated.

The day that you receive your Statement of Account from the Comptroller of Maryland is the day when the state is expecting a payment to be made and/or tax return to be filed. If there is no response received from a taxpayer, a delinquent tax case is transferred to the Comptroller of Maryland Collections, a division that is authorized to collect funds by means of enforcement actions, such as bank levies, seizure of assets, etc.

It is possible to avoid these actions by entering into a repayment agreement with the Comptroller of Maryland. However, as a business owner, you should be aware that you will not be in a position to negotiate a resolution for your back taxes if any of your tax returns are not filed or processed. In addition, failure to stay current with the business tax obligations after entering into a payment agreement with the state of Maryland will automatically default this agreement, and enforced collection activity will be resumed.

The Comptroller of Maryland uses several methods to ensure compliance and collect past due taxes. The first step in the state tax collection process is the filing of a state tax lien in a circuit court at your business location. A state of Maryland tax lien is a legal claim that is made on delinquent taxpayer's assets by the Comptroller of Maryland. Although it does not allow the state to take away and sell your property, it can seriously affect the business credit score and, therefore, the ability to obtain a loan to pay off debts.

The next step of enforced collection is an attachment that can be issued to all business assets, including physical property and bank accounts. An attachment to seize business assets is usually sent to the local sheriff's office. Bank accounts can be levied by sending a notice to the bank where a business has an account requesting to withdraw all money that exists in the account on the day when the state notice is received and send them to the Comptroller of Maryland.

Another method that can be used by the Comptroller to ensure compliance with the state tax law is Sales and Use License Revocation. Any business in retail industry must have this license to operate. Therefore, revocation of Sales and Use License is a serious threat, which can force you out of business.

The Comptroller of Maryland can also apply all money that is due to the delinquent taxpayer by the state to the tax liability of that taxpayer. This includes all state refunds and accounts receivable for goods and services.

The state of Maryland collection process might create financial hardship for the business. Therefore, it is important to take the situation under control as quickly as possible. If your business state tax liability is less than $10,000, you might find it more beneficial to negotiate a payment plan with the state on your own, without paying a tax professional. However, if the balance is higher than $10,000, hiring a tax resolution agent to negotiate a resolution for your business is usually a wise financial decision.

Ian Jackson

This guest post was provided by Ian Jackson, a tax professional who writes for one of the premier tax resolution companies. Find out more at 20/20 Tax Debt Help.