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I Received A Tax Notice

Your business received a tax notice from the Comptroller of Maryland. Notices are sent from our offices to business taxpayers for a variety of reasons. It could be a missing return, an error on a return. It could be that your IRS return doesn't match your Maryland return. It could be because you didn't remit the appropriate returns and/or payment for admissions and amusement, sales and use, boxing and wrestling, motor fuel, alcohol or tobacco taxes.

If you have not paid your taxes due in full, or have not filed a Maryland return that we believe you should have, you will receive an income tax notice from the Comptroller of Maryland. If you do not respond to the first notice, an assessment notice will be issued. Once you receive an assessment notice you will be billed for the amount of the assessment in addition to a substantial penalty and interest charge on the tax owed.

Whatever the reason, don't get Caught in the Web! We're problem solvers and want to help solve yours! We've provided a general information guide using the links below so that you can learn more about the notice you received, the methods we used to determine that a noticed had to be sent, and instructions on what to do next. Look at the notice you received and follow the links below using the printed information on the notice to find what you're looking for.

If you have questions about the notice you received, or if you can't find your notice defined here, call the phone number on the notice promptly. By calling the number on your notice, you can find out how to resolve the dispute or file an appeal and request a hearing. Failure to respond to the notice may cause us to assess additional penalty and interest charges and result in further collections efforts.

If you believe you owe state taxes but have not received a notice, call our taxpayer service office at 410-260-7980 from Central Maryland or 1-800-MDTAXES from elsewhere.

Information Request Notices

An Information Request Notice is issued when we believe that a taxpayer is required to file a Maryland income tax return, but has not. A response is requested to help us determine if you do have a filing requirement.

The Non-Filer program identifies individuals who have filed federal income tax returns using a Maryland address but have not filed a corresponding Maryland income tax return.

If you received an Information Request letter but you have previously submitted a Maryland income tax return, please check box A and provide a copy of the Maryland return. If you do not believe that you had a filing requirement, please check box B, and provide an explanation along with documentation substantiating why you were not required to file with the State of Maryland (e.g., copy of W-2, resident income tax return, etc.). If you are required to file but have not yet submitted a return, please check box C and submit your completed Maryland income tax return using the envelope provided.

The Revenue Agent Report Program (RARNF) is based on information received from the Internal Revenue Service (IRS) indicating that a taxpayer's federal return was audited or adjusted. The program compares the information to our records and when no Maryland return is located, an Information Request RARNF letter is generated.

If you received an Information Request letter but you have previously submitted a Maryland income tax return, please check box A and provide a copy of the Maryland return. If you do not believe that you had a filing requirement, please check box B, and provide an explanation along with documentation substantiating why you were not required to file with the State of Maryland (e.g., copy of W-2, resident income tax return, etc.). If you are required to file but have not yet submitted a return, please check box C and submit your completed Maryland income tax return using the envelope provided.

The Extension Non-filer Program (EXTNF) identifies individuals who have made estimated or extension payments but have not filed a corresponding income tax return.

If you received an EXTNF Information Request letter but you have previously submitted a Maryland income tax return, please check box A and provide a copy of the Maryland return. If you do not believe that you had a filing requirement, please check box B, and provide an explanation along with documentation substantiating why you were not required to file with the State of Maryland (e.g., copy of W-2, resident income tax return, etc.). If you are required to file but have not yet submitted a return, please check box C and submit your completed Maryland income tax return using the envelope provided.

The NESNF Program is a non-filer program based on information received as part of an exchange agreement between Maryland and various neighboring states. When we receive information from a participating state that a taxpayer filed a non-resident income tax return indicating they are a Maryland resident, we review our records to verify that a Maryland resident return has been filed. If we cannot locate a Maryland return, an Information Request- NESNF letter is issued to the taxpayer.

If you received a NESNF Information Request letter but you have previously submitted a Maryland income tax return, please check box A and provide a copy of the Maryland you were not required to file with the State of Maryland (e.g., copy of W-2, resident income tax return, etc.). If you are required to file but have not yet submitted a return, please check box C and submit your completed Maryland income tax return using the envelope provided.

Adjustment Notices

An adjustment notice is issued when a taxpayer's account has been adjusted based on an audit program conducted by the Comptroller of Maryland. The notice indicates the reason for the adjustment and the resulting tax and interest due.

We receive information from the Internal Revenue Service advising us of changes made to a taxpayer's federal return, as a result of an audit. We make an adjustment to the taxpayer's account to incorporate all changes which impact the Maryland return. A Notice of Adjustment (RAR) is issued to notify the taxpayer of the changes made and the resulting tax and interest due.

If you received a Notice of Adjustment (RAR) and do not agree with our adjustment, please provide documentation showing that the federal adjustment has been revised. Acceptable documentation would be an updated federal audit report, or a federal Account Transcript. If an amended return was filed with the IRS in response to the audit, please provide a copy of the federal amended return and the IRS acceptance letter. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

We compare the income reported on a taxpayer's Maryland income tax return against the income reported on their federal return. When the income reported on the Maryland return is less than the income reported on the federal return, the Maryland return is adjusted to increase the income accordingly. A Notice of Adjustment (FAGIM) is issued to notify the taxpayer of the changes made and the resulting tax and interest due.

If you received a Notice of Adjustment (FAGIM) and do not agree with our adjustment, please provide documentation to explain the difference in income along with a copy of your federal income tax return. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

We receive information from the Internal Revenue Service that indicates they have adjusted a taxpayer's federal income tax return to include income not previously reported. Since the Maryland return is based on the federal return, we adjust the Maryland return to include the unreported income accordingly.

If you received a Notice of Adjustment (CP2000) and do not agree with our adjustment, please provide documentation showing that the federal adjustment has been revised. Acceptable documentation would be an updated federal audit report, or a federal Account Transcript. If an amended return was filed with the IRS in response to the audit, please provide a copy of the federal amended return and the IRS acceptance letter. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

Notices of Adjustments are issued when a taxpayer's return is adjusted based on one of the following audit programs:

A taxpayer's return is adjusted to eliminate or reduce the Earned Income Credit (EIC), Local EIC and Refundable EIC based on information we receive from the Internal Revenue Service (IRS). Maryland taxpayers are entitled to claim a credit State EIC equal to 50% of the allowable federal EIC.

If you have received this notice and feel it is in error, please provide a copy of your federal income tax return along with an Account Transcript which indicates the credit allowed on your federal return. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

Maryland income tax law requires taxpayers to add back an amount equal to the tuition and fees deduction claimed on their federal return. Information is received from the IRS identifying Maryland taxpayers who have claimed the tuition and fees deduction on their federal return. If the correct addition is not included on the Maryland return, the return is adjusted to include an addition modification equal to the tuition and fees deduction.

If you have received this notice and feel it is in error, please provide a copy of your federal income tax return along with an Account Transcript. If an amended return was previously filed with the IRS to change or eliminate the deduction, please provide a copy of the federal amended return and the IRS acceptance letter. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

The amount of withholding taxes claimed on an individual's tax return is matched against the W-2 Wage and Tax Statements provided to the Comptroller's office by the individual's employer. When there is a discrepancy in the amount claimed, the return is adjusted accordingly.

If you have received this notice and feel it is in error, please provide copies of the statements (W-2s, 1099-Rs, etc.) showing the amount of additional Maryland withholding. Documentation should be sent to the Compliance Programs Section, as indicated on the notice.

We verify that taxpayers claiming the pension exclusion had income from a qualifying employee retirement system and were at least 65 years old, or totally disabled, or had a spouse who was totally disabled, during the tax year in question. If our records indicate that one of these criteria is not met, an adjustment is made to eliminate the pension exclusion claimed.

If the individual meets the criteria to claim the exclusion, the amount claimed is then verified to determine that the exclusion has been properly calculated. If we find that there was an error in the calculation, the tax return is adjusted to allow the proper amount of exclusion.

A qualified employee retirement plan must be qualified under Sections 401(a), 403 or 457(b) of the Internal Revenue Code. Foreign pensions do not qualify for the pension exclusion.

To be considered totally disabled, an individual must have a mental or physical impairment which prevents you from engaging in substantial gainful activity. The taxpayer must expect the impairment to be of long, continued or indefinite duration or to result in death.

If you received this notice, and feel it is in error, please provide your explanation and documentation to Compliance Programs as indicated on the notice.

Hearing Request Notices

Hearing Request (RAR-1202)

In receipt of your correspondence regarding your request for a hearing.

If you have questions about the notice you received, or you can't find your notice defined here, call the phone number on the notice promptly. By calling the number on your notice, you can find out how to resolve the dispute or file an appeal and request a hearing. Failure to respond to the notice may cause us to assess additional penalty and interest charges and result in further collections efforts.

Cigarette/ Tobacco Tax Notice Description

Section 13-408(b) of the Tax General Article, Annotated Code of Maryland provides, "If the Comptroller determines that a person has possessed or transported cigarettes or other tobacco products on which the tobacco tax has not been paid as required under Title 12 of this article, the Comptroller shall assess the tobacco tax due."

It is illegal to purchase cigarettes over the Internet. It is also illegal to bring more than five cartons per person into Maryland from another state. Importing more than five cartons is a felony if transported. See Tax General TG 12-104 and TG 13-1015. The current tax rate is $2.00 per pack of twenty (20).

The Comptroller received information indicating you purchased cigarettes over the Internet or out-of- state. The cigarettes purchased did not have the proper Maryland tobacco stamps affixed. According to our records, neither the Maryland tobacco tax nor the Maryland sales & use tax has been paid as required.

As a result, you, as the consumer who possessed the cigarettes, are responsible for remitting the cigarette tax. In addition, Maryland sales tax is due based on the total cost of the cigarettes.

For additional information, please view Consumer FAQs about Tobacco.

If you have questions about the letter you received, please call the number provided on the letter.

Individual Income Tax Notice

Individual Income Tax Computation Notice

An Individual Income Tax Computation Notice is an initial notice showing the tax and interest currently due on an individual income tax account.

Notice of Income Tax Assessment

A Notice of Income Tax Assessment (NITA) is issued when there is no response to an initial notice or when a tax liability is not resolved or paid within the time indicated on the initial notice. The NITA includes updated interest and a penalty of up to 25% based on the unpaid tax. Appeal rights are provided on this notice.

Temporary License Tax Notice

When sales are made at shows or fairs by vendors who do not have a permanent sales and use tax license, the sales tax is collected and remitted on a thirty (30) day Temporary License Form. You can view a sample of COM/ST-203 by clicking the link.

If you are going to participate in an event/ craft show involving the sale of tangible personal property in Maryland, you are required to collect the 6% Maryland sales and use tax, and remit the tax collected to the Comptroller of Maryland on form COM/ST-203, within thirty (30) days of the event.

For a one-time event you must obtain a thirty (30) day Temporary License, to remit any tax collected. A temporary license can be obtained by calling our Business Nexus Unit at 410-767-1543 or 410-767-1531. If you are a promoter, you may also complete and return the Temporary Sales Tax License Information form to templicense@marylandtaxes.gov. You must file the thirty (30) Day Temporary License even if no tax is due.

If you participate in three (3) or more events each year, you are required to obtain a permanent sales tax license. A permanent license can be obtained by visiting our web site at www.marylandtaxes.gov and completing a Combined Registration Application Form.