As The Daily Record reported Tuesday, the Maryland Comptroller’s office released its list of top tax evaders this week — 25 businesses and 25 individuals.
The list of businesses, available publicly on the comptroller’s website, includes the names, officer’s names and addresses of the businesses owing most to the state government. However some of the listings seem to be flawed.
“Worldwide Internet Sweepstakes,” for instance, the No. 1 business “scofflaw,” is listed with a Rockville address. While a Google search for that exact business name yielded no Rockville results, there does seem to be a website “World-Wide Internet Sweepstakes” showing the same Rockville address listed on the tax scofflaws list, although the site looks incomplete. The website also lists an email address similar to the name of the officer assessed for “Worldwide Internet Sweepstakes.”
A similar URL leads to the site for a World-wide Internet Sweepstakes LLC that is based in Las Vegas, with a header that reads “Buena Vista Computer Club.”
OK, it’s a hyphen… not a huge difference, right?
But there’s more.
The second and fourth listings, “Specialty Hospital of Washington – Hadley” and “Capital Hill Healthcare Group,” seem to be referring to two branches of Specialty Hospitals of America. The first is Specialty Hospital of Washington Hadley and the second seems to be either the Specialty Hospital of Washington Capitol Hill or the Capitol Hill Nursing Center at Specialty Hospital of Washington.
Either way, the Specialty Hospital site lists no “Capital Hill” (note the “a”) location or entity. Both of these hospital locations have Washington addresses, and the tax type is listed as “withholding,” which implies that some of their employees should have had Maryland taxes withheld.
So far, it’s just spelling mistakes, but one more finding is little more confusing, to say the least.
Rockford LT Inc. appears on the comptroller’s list as owing $314,554 in corporate taxes to the state of Maryland. It is listed with a New Jersey address.
The only search result yielding Rockford LT Inc. with that New Jersey address was a 1996 Securities and Exchange Commission filing for Linens ‘n Things Inc.
Linen ‘n Things has the same headquarters address as is listed on the comptroller’s list, but in that filing, Rockford LT Inc. is listed as a subsidiary incorporated in California and Minnesota. The filing explains that each new store the chain opens is incorporated as its own corporation.
Granted, that’s an old filing. Maybe Linens ‘n Things opened a Maryland location after 1996 that was incorporated under the Rockford name. But all locations of the home goods store have closed now.
Regardless of spelling errors and location confusion, Glen Frost, a tax attorney with offices in Annapolis and Columbia, said that state tax law can be a little harsh for businesses down on their luck.
“People who were very successful prior to the economic downturn… a large portion of people on those lists are those people,” said Frost.
And even those who are aware of their tax debts may find that their options are slim, he said, because they cannot come to a compromise with the government until they have been closed for two years.
For instance, Captain’s Table, a restaurant in Solomons, Md. that appears on the comptroller’s list as owing more than $200,000, seems to have closed last year. But it will not be eligible for an offer in compromise for nearly two more years.
Preventing a business license renewal is one of the steps used to urge these businesses to pay, said Comptroller Peter Franchot. That might make it difficult to get the money to pay.
Andrew Friedson, Director, Office of Communications, Comptroller of Maryland, issued the following response to this blog on Friday Jan. 31:
“Contrary to the misstatement of the facts contained within the story, the Comptroller’s Office has always and continues to go out of its way to work with taxpayers and businesses that make any effort to fulfill their lawful obligations, regularly setting up payment plans and utilizing our office’s legal discretion. The fact remains that despite the glaring inaccuracies portrayed in the story, the businesses included on the ‘Caught in the Web’ list are not simply down on their luck in a tough economy. These are businesses with at least one, if not many, outstanding tax lien(s) against them who have knowingly dodged their tax obligations and have ignored numerous communications from our office. Their willful neglect of their tax obligations is an affront to the vast majority of Maryland taxpayers and businesses that abide by the law.
“The alleged discrepancies between the business names on the list and those found through what appears to be an exhaustive Google search are due to variances in the official names of a registered legal entity and those used in the public domain—a routine point our office would have been happy to clarify, if the expected time was taken to contact our office. The only true mistake in the release was the misspelling of a single word.
“Notwithstanding the facts grossly misstated in your piece, the Comptroller’s ‘Caught in the Web’ list remains a great program and a proven technique for recapturing money owed to the State by the most egregious tax cheats, helping to establish a culture of tax fairness for the vast majority of Maryland taxpayers who follow the law and play by the rules.”