March 18, 2012

State computer glitch targeted seniors for back taxes they don’t owe

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By Daniel Menefee
Dan@MarylandReporter.com

Treasury building in Annapolis

Treasury building in Annapolis.

About 1,800 Maryland seniors have received erroneous notices from the comptroller’s office saying they owe money for improperly overstating pension exclusions or claiming pension exclusions they were not entitled to on their 2008 e-filed tax returns.

The March 1 letter stated, “You either overstated the allowable pension exclusion amount, or claimed a pension exclusion that you were not entitled to, pursuant to Maryland Law.”

The notices were in error, said Joseph Shapiro, the comptroller’s communications director in an email to the MarylandReporter.com on Friday.

New letters have been sent out to to assure seniors they do not owe any additional taxes, Shapiro said. Incorrect information received from the IRS was updated into the state’s system, which generated the notices.

“Once we got the full information, our compliance folks went back and adjusted all the accounts to clear up the error,” Shapiro said. “All 1,800 seniors have been sent letters explaining there was a glitch and that they do not owe any money. In fact, in some cases we sent some refunds that were owed. If anyone hasn’t gotten that letter, they should in the next day or two.”

“We regret the inconvenience and anxiety that the original notices caused, but the comptroller is happy that once the error was discovered, his staff was able to correct it quickly,” Shapiro said.

Dan Graham, a volunteer tax preparer at the Pascal Senior Center in Glen Burnie, said they have had to be vigilant with the comptroller’s office to correct the returns. In one instance he said they had to make several phone calls and faxes to get a senior a refund.

Graham said problems with the comptroller’s office occurred when calculating refunds of overpayments because of the letter.

“The comptroller wanted to withhold another $85 that [was owed] to a senior,” Graham said.

The problem became known Monday when tax volunteers at senior centers in Anne Arundel County learned of the letters.