The Maryland Tax Amnesty Bill (Maryland Senate Bill 552) was signed into law on May 7, 2009, by Governor Martin O'Malley. The Act establishes an amnesty period for payment of outstanding tax liabilities resulting from non-reporting, under-reporting, or non-payment of taxes—including state and local individual income tax, corporate income tax, withholding tax, sales and use tax, and admissions and amusement tax—due prior to December 31, 2008.

           If a taxpayer qualifies for amnesty under S.B. 552 and files a delinquent return during the amnesty period (September 1, 2009 through October 30, 2009), the Comptroller shall waive all civil and criminal penalties and one-half of the interest previously imposed upon the taxpayer.  Taxpayers unable to pay the full amount of taxes due may, at the Comptroller’s discretion, enter into a payment plan with the Comptroller whereby the full amount of tax due plus one-half the interest must be paid by December 31, 2010.  However, the one-half interest amnesty applies only to past interest due; interest accruing on outstanding tax liabilities that are not paid at the end of the amnesty period must be paid in full. 

          Taxpayers disqualified from amnesty treatment include employers with over 500 employees in the United States, employers part of an affiliated corporate group with over 500 employees combined in the United States, and any taxpayer who utilized the Maryland tax amnesty program in 2001. 

          S.B. 552 contains no provisions in this bill which limit the ability of the Maryland Comptroller’s office to share information with the Internal Revenue Service.  Therefore, participation in the amnesty program could potentially subject a corporate entity or individual to adverse federal tax actions. 

          The Maryland Comptroller’s office will be issuing regulations describing in further detail how the amnesty program will fully function.

Most Taxpayers can't deduct penalties paid as deductible business expenses for either state or federal tax purposes.  If you owe back taxes to Maryland, we can help determine:
Our office routinely represents taxpayers before the Comptroller's Office, and has specific experience from the last amnesty period (2004) in advising clients on the amnesty program. We have specific State and Local Tax (SALT) from personnel formerly with KPMG's Mid-Atlantic SALT practice, and Arthur Anderson's tax practice. Our In House CPA's can assist you with the preparation of any back tax returns which remain outstanding.