Attention Maryland taxpayers: When mailing an amended return in hope of getting a refund, make sure you send the document to the comptroller by registered mail and be sure to keep the receipt.
Such proof is required in cases when the comptroller’s office claims to have never received the amended returns and cannot track them down, Maryland’s second-highest court ruled this month.
The Court of Special Appeals’ decision was a $58,419 defeat for James and Monica Myers, who said they mailed their amended returns by conventional certified mail within the three-year statute of limitations for seeking a refund. However, their word was insufficient as a matter of law to refute the comptroller’s claim that the returns were not received and could not be found, the appellate court said in its reported 3-0 decision.
Maryland tax law follows federal regulations, which hold that a receipt for registered mail provides conclusive evidence that an amended return was delivered even if the Internal Revenue Service claims not to have received it, the Court of Special Appeals said.
The federal regulation supersedes the common law “mailbox rule” that regards a document as validly submitted on the date it was posted regardless of its receipt, the court added.
“Maryland’s income tax should be construed consistent to federal law ‘to which it is inextricably keyed,’” Judge Kathryn Grill Graeff wrote for appellate court, quoting from the Court of Appeals 1977 decision Comptroller of Maryland v. Diebold Inc.
“Accordingly, in a situation where a taxpayer mails a claim for a refund, but the comptroller does not receive the claim within the limitations period, the taxpayer can show timely filing only by a receipt of registered mail or other proof pursuant” to the federal regulation, Graeff added.
Maryland Comptroller Peter Franchot hailed the court’s decision.
“To ensure equal and impartial treatment of all Maryland taxpayers, we are pleased the Court of Special Appeals agrees with our agency that taxpayers must have proof of their claims – even if that means proving they mailed returns on a certain date that falls within the statutorily prescribed limitations period,” Franchot said in a statement Friday. “Our employees make every effort to respectfully work with taxpayers to help them achieve the best results possible, but we must work with a legal set of rules that apply to all.”
The Myerses’ attorney, Chaya Kundra, did not immediately return a message Friday seeking comment on the court’s decision and on any plans to seek review by the Court of Appeals. Kundra is with Kundra & Associates PC in Rockville.
The Myerses were spurred to amend their tax returns by their accountant who correctly predicted that a constitutional challenge to county “piggy back” taxes might be successful with regard to money earned in and taxes paid to other states but not credited by the counties, according to court papers.
The couple dutifully mailed the amended returns for the tax years 2008, 2009 and 2012 upon their accountant’s preparation of them in January 2012, July 2013 and August 2015, which were within the three-year statute of limitations for the three tax years.
The Supreme Court struck down the application of the piggy back tax to money earned and taxes paid out of state in its Comptroller of Maryland v. Wynne decision in 2015.
When no refund was forthcoming, the Myerses mailed a second set of their amended returns on Aug. 11, 2017, according to court papers.
The comptroller acknowledged receiving the amended returns on Aug. 16, 2017, but declined to provide refunds, saying they were not filed within the three-year statute of limitations.
The Myerses successfully sought relief from the Maryland Tax Court, which applied the mailbox rule and credited their testimony that they had mailed their amended returns for the tax years 2008, 2009 and 2012 immediately upon their preparation by their accountant, as was the couple’s custom, and thus within the three year time limit.
The Anne Arundel County Circuit Court agreed with the tax court, prompting the comptroller’s successful appeal to the Court of Special Appeals.
Graeff was joined in the opinion by Judges Christopher B. Kehoe and Terrence M.R. Zic.
The Court of Special Appeals rendered its decision in Comptroller of Maryland v. James R. Myers et al., No. 95, September Term 2020.