Local Tax Matters
Compliance Checks
State and local tax compliance is determined by evaluating a taxpayer’s filing history, outstanding liabilities, and timeliness of payments for all applicable state and local tax obligations. To be fully compliant with state and local tax filing and payment obligations, a taxpayer must accurately and timely file returns, pay taxes on time, and have no outstanding tax liabilities.
Comprehensive tax compliance review
Why is State and Local Tax Compliance Important?
Compliance is crucial not only to avoid accruing penalties and interest from late tax payments but also because state and local tax authorities require taxpayers to be in compliance before taking specific actions on their accounts. This becomes especially important when facing serious collection actions such as driver’s license holds, professional license suspensions, or bank levies.
Furthermore, evaluating a taxpayer’s state and local compliance history is essential in creating a comprehensive plan to address tax issues. Tax representatives must understand what led to the liability and collaborate with the taxpayer to develop a strategy for addressing current liabilities and a long-term plan for maintaining future compliance.
Compliance often comes before relief
When collection actions are on the table, being in compliance can be what stands between you and losing access to a license or a bank account:
- Driver’s license holds
- Professional license suspensions
- Bank levies
Requirements
State and Local Compliance Requirements
Taxpayers may not enter into an Installment Agreement, nor may they have an Offer in Compromise considered unless they are in compliance with their state and local tax filings. State and local compliance programs also require taxpayers to be current with their estimated tax payments and, where applicable, their tax deposits, including estimated tax payments and required tax deposits. Falling out of compliance by missing future tax payments or filing deadlines can result in a default of the installment agreement or an Offer in Compromise.
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Accurate, timely returns
Every applicable state and local tax return is filed accurately and on time — no missing or late filings.
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On-time payment
All taxes owed are paid by their due dates, keeping the account current with the taxing authority.
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No outstanding liabilities
There are no unresolved balances, penalties, or interest sitting on any state or local tax account.
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Current estimates & deposits
Estimated tax payments and, where applicable, required tax deposits are kept up to date going forward.
Next steps
Start with a clear compliance picture
A thorough compliance check is the foundation of any plan to resolve state and local tax issues. Once we understand where you stand, we can move you toward a Maryland Installment Agreement or defend you in a Sales Tax Audit or State Income Tax Audit — and build a long-term plan to keep you compliant going forward.