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Tax Amnesty: Frequently Asked Questions

Tax Amnesty FAQ Quick Links
  1. What is the Amnesty Period?
  2. Which Maryland taxes are included under Tax Amnesty?
  3. What tax periods are covered?
  4. Does amnesty apply to returns due after December 31, 2014, such as the December 2014 SUT return, which was due on January 20, 2015?
  5. What is waived?
  6. How do I know if I am eligible for Tax Amnesty?
  7. What if I was a corporation that was eligible for the 2004 Settlement Period, but has a tax liability unrelated to the issues addressed by the 2004 Settlement Period as referenced in Senate Bill 552. May I take advantage of amnesty?
  8. Can I obtain amnesty if I defaulted on my previous amnesty payment plan as part of either the 2001 or 2009 Tax Amnesty Programs?
  9. How can I find out how much I owe?
  10. How do I obtain Tax Amnesty?
  11. What is the latest an amnesty application will be accepted?
  12. What is considered a completed amnesty application?
  13. Will an amnesty payment be accepted prior to an application being filed?
  14. How do I obtain an amnesty application and appropriate tax forms?
  15. What tax identification number should I use on my amnesty application?
  16. How may I pay?
  17. Where do I mail my completed application and payment?
  18. Where can I drop off my completed application and payment?
  19. What if I make a payment before September 1, 2015?
  20. Are any payment arrangements available?
  21. How does the payment plan work?
  22. How do I compute the 10% down payment?
  23. How may the down payment be made?
  24. When should I make my payment?
  25. If I pay or file electronically, do I have to mail in the amnesty application?
  26. Can I pay off the amount early if I am on the payment plan?
  27. What happens if I miss a payment?
  28. What happens if my initial payment is returned for insufficient funds?
  29. Can I electronically file and pay employer withholding or sales and use tax returns?
  30. What if I do not take advantage of amnesty even though I owe state taxes?
  31. Can I get help from the Comptrollerís Office?
  32. What should I do if I owe tax and interest for returns due both before and after December 31, 2014?
  33. If I obtain amnesty for eligible taxes, and also pay the tax, interest, and penalty for periods due after December 31, 2014, will I be criminally prosecuted?
  34. I previously filed returns but did not pay the tax. Am I eligible for amnesty?
  35. My balance due is entirely penalties and interest. Am I eligible for amnesty?
  36. May a taxpayer assessed with fraud penalties (either 100% or some lesser percentage but still characterized as "fraud penalties") participate in the amnesty program with respect to the interest reduction?
  37. What happens if I donít pay all the Tax Amnesty-eligible tax and interest?
  38. Will any refunds be granted for penalties paid prior to amnesty?
  39. I currently have a deferred payment arrangement with the collections section. Can I apply for amnesty?
  40. What if I already have a deferred payment plan? How will that work with amnesty?
  41. The Comptrollerís Office currently has a garnishment on my wages, has a levy on my bank account, and/or has seized my business or taken other legal actions. Am I eligible for penalty abatement under the amnesty program?
  42. Will court or collection fees be waived under amnesty?
  43. I am currently being audited for one of the amnesty-eligible taxes, but the audit may not be completed during the amnesty period. Can I file for Tax Amnesty to avoid one-half interest and any penalties?
  44. I am currently being audited, and I agree with some of the adjustments but disagree with others. May I file amended returns and pay tax and one-half interest for the portions of the audit with which I agree?
  45. What if the audit is completed after amnesty ends and the auditor finds that I owe more than I paid with my amnesty application?
  46. Are taxpayers who were previously audited and now need to amend their returns to reflect additional income that was not discovered in the audit eligible for Tax Amnesty?
  47. Will my amnesty return(s) be audited?
  48. If I obtain amnesty and my return is later audited with additional tax determined due, is my amnesty revoked?
  49. Can I file for amnesty for taxes that I am appealing or protesting?
  50. Will my tax return information be disclosed to the Internal Revenue Service (IRS)?
  51. When will the next amnesty period be held?
  52. If I want to apply for amnesty for withholding, sales and use tax or admission and amusement tax, and I do not have an established account do I need to file for a Central Registration Number first?
Tax Amnesty Questions and Answers

1. What is the Amnesty Period?

The amnesty period is September 1, 2015 to October 30, 2015.

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2. Which Maryland taxes are included under Tax Amnesty?

Amnesty covers the following taxes:

  • Personal Income Tax
  • Fiduciary Income Tax
  • Pass-through Entity Nonresident Tax
  • Corporate Income Tax
  • Employer Withholding Tax
  • Sales and Use Tax
  • Admissions and Amusement Tax

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3. What tax periods are covered?

Tax liabilities for returns due on or before December 31, 2014, are included in the program.

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4. Does amnesty apply to returns due after December 31, 2014, such as the December 2014 SUT return, which was due on January 20, 2015?

No, under Senate Bill 763, only those returns due on or before December 31, 2014 will be eligible for amnesty.

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5. What is waived?

All unpaid civil penalties, except previously assessed fraud penalties, and one-half of any unpaid interest will be waived for eligible taxpayers and eligible taxes. Criminal prosecutions for state tax violations of amnesty-eligible taxes will be barred unless the charge is already pending or under investigation by a prosecutor.

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6. How do I know if I am eligible for Tax Amnesty?

The Amnesty program does not apply to:

  • Any taxpayer that was granted amnesty under either the 2001 or 2009 Maryland Tax Amnesty Program.
  • Any taxpayer eligible for the July 1, 2004 through November 1, 2004 Settlement Period, as provided in Chapter 557 of the Acts of 2004, which was applicable to the Maryland corporate income tax assessed by the Comptroller, whether or not the taxpayer took advantage of the settlement period. Corporate taxpayers who have questions regarding their amnesty eligibility status should contact Tom Tartal, Business Tax Audit Section Chief, at 410-767-1504.

All other taxpayers are eligible for amnesty unless they are under criminal investigation by the Attorney General, State Prosecutor, or a State's Attorney. Taxpayers against whom criminal charges are currently pending in Maryland courts or who are under investigation are not eligible for amnesty from criminal prosecution for the tax and tax period involved. Those taxpayers are, however, eligible for abatement of penalty and one-half of the interest charges for taxes under criminal investigation if tax and one-half interest is paid. They may be eligible for amnesty from criminal prosecution for other taxes or tax periods.

Taxpayers who have filed returns for the eligible taxes, but haven't paid all or part of the tax due, non-filers, and taxpayers being audited are all eligible for amnesty.

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7. What if I was a corporation that was eligible for the 2004 Settlement Period, but have a tax liability unrelated to the issues addressed by the 2004 Settlement Period as referenced in Senate Bill 552. May I take advantage of amnesty?

Yes, you may take advantage of amnesty for any corporate income tax liabilities that are unrelated to the 2004 Settlement Period and any other tax liability associated with other tax types.

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8. Can I obtain amnesty if I defaulted on my previous amnesty payment plan as part of either the 2001 or 2009 Tax Amnesty Programs?

No, you are ineligible for the 2015 Tax Amnesty Program since you were granted amnesty under either the 2001 or 2009 Maryland Tax Amnesty Program, even though the abated penalties and interest were reinstated.

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9. How can I find out how much I owe?

If you have an existing tax liability, please refer to bills you have received in the past. You can go to www.marylandtaxes.gov, click on the Amnesty page and then BillPay. Enter your notice number and your liability will be calculated for you. You can also calculate the interest using the interest table provided on the amnesty application or on the Comptroller's website.

If you have not filed the required returns and have any questions regarding your tax liability or eligibility for amnesty, email us at amnesty@comp.state.md.us or call 1-800-MD TAXES or 410-260-7980 from Central Maryland. You can also obtain a current account status by calling 1-800-MD-TAXES or 410-260-7980 from Central Maryland. Otherwise, complete the appropriate tax return and submit it with an amnesty application and your payment.

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10. How do I obtain Tax Amnesty?

During the amnesty period, you must:

  1. File a separate amnesty application along with the previously unfiled original or amended returns, if applicable, for each type of tax;
  2. Specify both the tax and the tax periods for which you are requesting amnesty; and
  3. Include full payment of the tax and one-half of the interest, or include a payment of at least 10% of the amnesty amount due and indicate on the application your preference for a payment plan. Individuals only must include their bank account information for direct debit monthly payments.

If you are seeking amnesty on a previously billed liability, only the amnesty application is required along with full payment of the tax and one-half the interest or if you prefer a payment plan, a payment of at least 10% of the amnesty amount due. Please be sure to check the payment plan box on the application. Individuals only must include their bank account information for direct debit monthly payments.

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11. What is the latest an amnesty application will be accepted?

Amnesty applications must be received or postmarked no later than October 30, 2015. However, it is to your advantage to file as soon as the amnesty period begins, in case you or the state discovers a discrepancy in your application and your application is not considered to be completed by the due date.

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12. What is considered a completed amnesty application?

An application is considered complete if all requested information is filled in, the application is signed and dated, completed returns are attached, if applicable, and full payment, or at least 10% down payment, is submitted with the application.

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13. Will an amnesty payment be accepted prior to an application being filed?

Yes, if you pay the amount due as represented on your amnesty application by direct debit through Bill Pay, bFile or iFile with a return, or by credit card, then your payment will be processed when made. Subsequently, when your mailed amnesty application is received, the amount will be matched to your application. However, payments made prior to September 1, 2015 will not qualify for amnesty.

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14. How do I obtain an amnesty application and appropriate tax forms?

The application and tax forms are available at the Comptrollerís website, www.marylandtaxes.gov. Applications and forms are also available by mail or you may obtain them from any office of the Comptroller of Maryland.

Written requests for applications and forms should be sent to the amnesty email address at amnesty@comp.state.md.us or by mail to:

Maryland Tax Amnesty
Comptroller of Maryland
P.O. Box 2031
Annapolis, MD 21404-2031

Telephone numbers:

1-410-260-7980 in Central Maryland
1-800-MD-TAXES from elsewhere

Forms by phone: 410-260-7951

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15. What tax identification number should I use on my amnesty application?

Use the number you normally use on your returns for the tax involved.

  • Personal Income Tax: Social Security Number.
  • Fiduciary Income Tax: Federal Employer Identification Number.
  • Pass-through Entity Nonresident Tax: Federal Employer Identification Number.
  • Corporate Income Tax: Federal Employer Identification Number.
  • Withholding Tax: central registration number and Federal Employer Identification Number.
  • Sales and Use Tax: central registration number and Federal Employer Identification Number.
  • Admissions and Amusement Tax: central registration number and Federal Employer Identification Number.

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16. How may I pay?

You may make your payment by direct debit through Amnesty Bill Pay on the Comptrollerís website at www.marylandtaxes.gov, by credit card, or by check or money order submitted with your amnesty application.

Direct debit is available on any electronically filed returns. Enter one-half the interest due in the Interest for Late Filing field if paying in full.

If you are paying by credit card, you can use Discover, Visa, American Express or MasterCard online through Official Payments Corporation (OPC), or NICUSA, Inc. Links to both providers are available on the Comptrollerís website at www.marylandtaxes.gov. There is an additional convenience fee of 2.49% of the amount charged. (This fee is not to be paid to the State of Maryland.)

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17. Where do I mail my completed application and payment?

Completed applications and payments should be mailed to:

Maryland Tax Amnesty
Comptroller of Maryland
P.O. Box 2031
Annapolis, MD 21404-2031
 

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18. Where can I drop off my completed application and payment?

You may drop off your completed application and payment in our Annapolis office only, at:

Revenue Administration Center
110 Carroll St
Annapolis, MD 21411-0001

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19. What if I make a payment before September 1, 2015?

Any payment made before September 1, 2015, will NOT be eligible for amnesty. In addition, any payment made before September 1, 2015 will be applied to penalties, interest, then tax, in accordance with statutory requirements.

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20. Are any payment arrangements available?

Yes, the law provides that the Comptroller may authorize payment plans for amnesty applicants, but full payment of the amnesty amount must be made by December 31, 2016. Interest at the full statutory rate of 13% per year will accrue on the unpaid tax amount due during the payment plan.

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21. How does the payment plan work?

If you choose to enter into a payment plan agreement with the Comptroller, the agency will compute the amount owed after crediting your account with the down payment made with the application. You will have to pay a down payment of at least 10% of the total amnesty amount owed and the remaining amount will be paid in equal monthly installments for the number of months you indicate on the application. The amount calculated by the Comptroller will include interest that will accrue on the tax owed during the payment plan. The Comptrollerís office will set this up for you based on the term selected on your amnesty application.

For personal income tax, you must provide your bank account information and agree to have your account debited each month for the duration of the plan. If you do not have a bank account, please call 410-974-2432 for alternate arrangements.

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22. How do I compute the 10% down payment?

Your minimum down payment amount is based on the sum of your tax owed plus one-half the interest multiplied by 10%.

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23. How may the down payment be made?

You may make your payment by direct debit through Amnesty Bill Pay on the Comptrollerís website at www.marylandtaxes.gov, by credit card, or by check or money order submitted with your amnesty application.

If you are paying by credit card, use Discover, Visa, American Express or MasterCard online through Official Payments Corporation (OPC), or NICUSA, Inc. Links to both providers are available on the Comptrollerís website at www.marylandtaxes.gov. There is an additional convenience fee of 2.49% of the amount charged. (This fee is not to be paid to the State of Maryland.)

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24. When should I make my payment?

You should make your initial payment on or after September 1, 2015 and no later than October 30, 2015. Any payments made before September 1, 2015 or after December 31, 2016, will NOT be eligible for amnesty.

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25. If I pay or file electronically, do I have to mail in the amnesty application?

Yes, amnesty will not be granted until the completed application is received.

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26. Can I pay off the amount early if I am on the payment plan?

Yes, you may pay the total amount owed at any time.

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27. What happens if I miss a payment?

Missing payments may result in the revocation of your amnesty approval and the reinstatement of any previously abated penalties and interest.

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28. What happens if my initial payment is returned for insufficient funds?

If you submit a check that is returned for insufficient funds, then your amnesty application will be denied and any abatement that has been made will be reinstated unless you resubmit an amnesty application and valid payment before October 30, 2015.

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29. Can I electronically file and pay employer withholding or sales and use tax returns?

Yes, use bFile, available on the Comptrollerís website at www.marylandtaxes.gov, to file and pay most delinquent employer withholding or sales and use tax returns. If you are paying in full, enter one-half of the interest due in the Penalty and Interest field when filing sales and use tax returns. For employer withholding returns, add one-half of the interest due to the amount you entered into the Maryland Income Tax Withheld field and enter the sum in the Remitted Amount field. The tax and interest amounts reported will be direct debited from your bank account.

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30. What if I do not take advantage of amnesty even though I owe state taxes?

After amnesty the chances of being caught and charged with failure to file or pay will be greater than ever. The Comptrollerís Office is adding new technology that will make it easier to identify individuals and businesses who are not filing returns or who are under-reporting income, sales, or withholding taxes.

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>31. Can I get help from the Comptrollerís Office?

Yes, information about amnesty, including applications and returns, is available on our website, www.marylandtaxes.gov. You can also visit any local office listed at the end of these questions or on our website, or our toll-free number 1-800-MD-TAXES. (From Central Maryland, call 410-260-7980.) We will send you applications and returns and provide an updated calculation of tax and interest due on eligible taxes. You can also e-mail us at amnesty@comp.state.md.us with any questions about the amnesty program.

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32. What should I do if I owe tax and interest for returns due both before and after December 31, 2014?

You should satisfy those obligations in different ways. Pay amnesty-eligible amounts using the amnesty application. Liabilities not eligible for amnesty should be paid through the normal statement and filing process.

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33. If I obtain amnesty for eligible taxes, and also pay the tax, interest, and penalty for periods due after December 31, 2014, will I be criminally prosecuted?

The Comptroller will not refer your case for criminal prosecution if you voluntarily disclose your liability and pay the tax, interest and penalty for periods not eligible for amnesty.

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34. I previously filed returns but did not pay the tax. Am I eligible for amnesty?

Yes, amnesty is available for nonpayment of eligible taxes on returns due prior to December 31, 2014. You must file an amnesty application. You must pay the tax and one-half interest or make a down payment of at least 10% of the amnesty amount due and enter into a payment plan agreement by October 30, 2015.

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35. My balance due is entirely penalties and interest. Am I eligible for amnesty?

No, if there is no outstanding tax liability and all that remains due on the account is interest and penalty, you are not eligible for amnesty.

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36. May a taxpayer assessed with fraud penalties (either 100% or some lesser percentage but still characterized as "fraud penalties") participate in the amnesty program with respect to the interest reduction?

Yes, if you have been assessed fraud penalties, you may still apply for amnesty for other tax periods and for interest reduction for the period for which you were assessed fraud penalties. However, no fraud penalties will be waived.

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37. What happens if I donít pay all the Tax Amnesty-eligible tax and interest?

If you default on your payment agreement, your amnesty approval may become void. Each eligible period is considered separately for purposes of amnesty. Amnesty will be granted only for those periods for which tax and one-half interest are paid in full.

38. Will any refunds be granted for penalties paid prior to amnesty?

No, previously paid interest and penalties cannot be credited or refunded, even if paid on taxes which are now eligible for amnesty.

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39. I currently have a deferred payment arrangement with the collections section. Can I apply for amnesty?

Yes, however, you must file an amnesty application and pay the remaining tax and one-half interest due during the amnesty period or enter into a new payment plan such that the amnesty amount will be paid in full by December 31, 2016.

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40. What if I already have a deferred payment plan? How will that work with amnesty?

Payments made prior to amnesty will not be reallocated, but your payment plan can be adjusted for the waiver of one-half the interest and penalties. The liability will be calculated on the amount owed at the time of the application.

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41. The Comptrollerís Office currently has a garnishment on my wages, has a levy on my bank account, and/or has seized my business or taken other legal actions. Am I eligible for penalty abatement under the amnesty program?

Yes, however, you must file an amnesty application during the amnesty period, and pay the remaining tax and one-half interest due during that period or enter into a new payment plan such that the amnesty amount will be paid in full by December 31, 2016. You should contact the collections agent handling your case for questions regarding the legal action taken against your business upon submission and approval of your completed amnesty application.

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42. Will court or collection fees be waived under amnesty?

No, the law only provides for a waiver of civil penalties and one-half of the interest.

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43. I am currently being audited for one of the amnesty-eligible taxes, but the audit may not be completed during the amnesty period. Can I file for Tax Amnesty to avoid one-half interest and any penalties?

Yes, you can complete an amnesty application, file amended returns, and pay the tax and one-half interest due and obtain amnesty.

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44. I am currently being audited, and I agree with some of the adjustments but disagree with others. May I file amended returns and pay tax and one-half interest for the portions of the audit with which I agree?

Yes, amnesty applies to the amount included on the amended return and the audit will be concluded in the normal manner. Civil and criminal penalties may be imposed on any additional amounts assessed by the auditor.

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45. What if the audit is completed after amnesty ends and the auditor finds that I owe more than I paid with my amnesty application?

The additional amount due will be assessed in the normal manner. If a penalty is imposed, it will not be imposed on the amount of tax paid with the amnesty application.

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46. Are taxpayers who were previously audited and now need to amend their returns to reflect additional income that was not discovered in the audit eligible for Tax Amnesty?

Yes, taxpayers in this situation will be eligible for amnesty so long as they are eligible taxpayers under the law and the returns were due on or before December 31, 2014.

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47. Will my amnesty return(s) be audited?

Itís possible. Tax returns filed under amnesty are subject to the same verification and assessment process as applied to any other tax returns filed under ordinary circumstances.

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48. If I obtain amnesty and my return is later audited with additional tax determined due, is my amnesty revoked?

No, amnesty remains in effect to the extent of the tax and interest paid during the amnesty period. However, the audit adjustment will stand on its own and the additional tax due may be subject to interest and penalty. Thus, any return filed under the program should be as accurate as possible.

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49. Can I file for amnesty for taxes that I am appealing or protesting?

Yes, if you wish to continue your appeal you may do so. Simply pay the tax and one-half interest during the amnesty period and continue your appeal. If you prevail, the tax and interest paid will be refunded to you and you may be entitled to interest on the overpayment.
 

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50. Will my tax return information be disclosed to the Internal Revenue Service (IRS)?

To the extent information received under the program is subject to the Comptrollerís exchange agreement with the IRS, the information will be disclosed. It is important to realize that the disclosure of much of the information received under Amnesty may not result in a corresponding federal tax liability for any one of the following reasons:

  • Taxpayers may have filed federal tax returns, but failed to file all necessary state tax returns (Example Ė Income Tax).
  • Many of the taxes eligible for amnesty have no comparable federal tax (Example Ė Sales Tax).
  • Maryland tax law differs from federal tax law in some important aspects. (Example Ė municipal bonds, different states of residency).

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51. When will the next amnesty period be held?

There is no assurance that Tax Amnesty will happen again. You should, therefore, take advantage of this opportunity to pay the tax and one-half interest on all eligible taxes and periods, have the remaining charges abated, and receive amnesty from criminal prosecution.

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52. If I want to apply for amnesty for withholding, sales and use tax or admission and amusement tax, and I do not have an established account do I need to file for a Central Registration Number first?

Yes, you will need to submit a completed Combined Registration Application (Maryland form CRA) to obtain a central registration number before your amnesty application can be processed.

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