Tax Administration Agenda

Fair, Competitive, and Transparent Tax Administration

Maryland’s tax system depends on voluntary compliance, which in turn relies on Maryland residents believing that the system is fair and transparent. As Comptroller, Brooke will work to make sure that Maryland’s tax practices are transparent and seen as fair for both individuals and businesses, and are competitive so as to drive the state’s economy and jobs growth. Brooke will use her state legislator experience and relationships to work with lawmakers and stakeholders for maintaining appropriate tax practices and policies that serve the needs of our state and its citizens.

She will be an independent watchdog for the effectiveness of tax incentive programs and the recently enacted whistleblower program. Brooke will also bring parties together to explore options for modernizing the state’s income tax code to ensure we have policies that support our families, seniors, and small businesses.

PRIORITIES

Maximizing Efficiency and Accountability of our Tax System

As Comptroller, Brooke aims to maximize the efficiency and accountability of Maryland’s tax system. Brooke recognizes the Comptroller’s Office as more than just that of the tax collector. It also provides crucial services to individuals and businesses. In order to fulfill this role, the Comptroller’s Office must function at full capacity by attracting and retaining a well-trained, diverse staff who receive competitive salaries and benefits. Taxpayers and tax professionals rely on the services of the Comptroller’s Office to answer tax questions and receive timely returns. Brooke will advocate exempting the Comptroller’s Office staff from state hiring freezes so high quality services are always available. In the long-term, Brooke aims to increase training for staff members to build on existing tax-policy expertise, maintain top-notch customer service, and continue to advocate on behalf of taxpayers. Brooke will leverage her experience in the General Assembly to fight for full funding of the Comptroller’s Office and to recruit and retain a highly skilled and diverse workforce that reflects Maryland’s diverse population.

Continuing to Modernize and Simplify Maryland’s Tax Collection and Compliance

As Comptroller, Brooke will call for increased resources for collecting corporate and individual income tax. Maryland’s capacities are limited and rely heavily on the Federal Internal Revenue Service which continues to be chronically underfunded. Too many Marylanders with complex assets and high incomes slip through the gaps and do not pay their fair share. Brooke will explore every avenue to help increase tax compliance by increasing the capacity of the Comptroller’s Office or creating multi-state partnerships.

This new system will integrate individual income tax, State sales tax, and business tax collection in a unified system that will update data in real-time and provide comprehensive security controls. The result will simplify compliance for taxpayers and allow more dynamic use of staff. As Comptroller, Brooke will build on this progress and continue to identify opportunities for system improvements that will reduce costs and simplify procedures for businesses and households alike.

Ensuring All Marylanders Are Paying Their Fair Share

Improving Access to and Transparency of Relief Programs

The Comptroller’s Offer in Compromise program provides a lifeline to individuals whose unique circumstances prevent them from paying their tax debt in full. Absent this program, many taxpayers would be unable to pay for their basic living expenses if they had to pay the taxes in full, many individuals would not have sufficient funds to pay for their basic living necessities. Unlike the IRS’s Offer in Compromise program, the standards required for relief at the state level are not clearly defined or disclosed to the public. The process of applying is complicated and frequently takes years to complete. Furthermore, a taxpayer is not eligible for the offer program until two years have passed since the tax debt arose. A two year wait for some may be far too long. Brooke believes that urgently needed relief programs, such as this one, should not be so complicated as to necessitate the need for legal counsel or require lengthy negotiations or wait times. She is committed to establishing clear, definitive standards of review that are transparent and predictable. She is committed to ensuring that the Comptroller’s office is sufficiently staffed and trained to review and process applications in a timely manner in accordance with fixed criteria and to make changes to the laws, if necessary.

Improving Maryland’s Tax Debt Collection

Maryland’s interest rate on tax debt currently stands at 10% and, though it is set to incrementally decrease to 9% by 2023, it is, and will remain far higher than many businesses are legally allowed to charge. For taxpayers who do not have the means to pay the tax due in full this interest rate can be crippling, and many of these taxpayers are living with very limited incomes to begin with. As a result, taxpayers often wind up paying interest many times over the amount of tax that was originally due. Brooke recognizes that these systemic procedural issues unfairly burden and punish the most vulnerable taxpayers with debt that they may never be able to recover from. As Comptroller, Brooke will proactively work with taxpayers in these situations to create appropriate payment plans, abate penalties as needed, and solve underlying issues such as under-withholding. Brooke will work with businesses to provide transparent information and tools to help ensure appropriate employee withholdings.

Maintain Maryland’s AAA Bond Rating

As one of only 13 states to maintain a AAA bond rating, Brooke knows this important bond rating is what allows us to fund many vital programs and investments that so many Marylanders enjoy and expect. Brooke will work to ensure Maryland maintains our AAA bond rating and reject any actions that might jeopardize this critical rating.

Creating a Maryland Taxpayer Advocate

Maryland is one of a handful of states without a taxpayer advocate office. Nationwide, these state offices provide access to taxpayers to resolve issues that cannot be resolved through normal agency channels. Taxpayer advocacy in each state is different, but the underlying goal is to focus and elevate the taxpayer’s voice and provide taxpayer resources within the agency. Thus, using the various other state statutes as blueprints, I plan to create the Office of the Maryland Taxpayer Advocate.

In a system dependent on voluntary tax compliance, it is crucial to find ways to reduce barriers for taxpayers and make the system more efficient, fair, and transparent. Some of the barriers that face Maryland taxpayers include lack of trust in the system, language barriers, inability to access tax help sites, and individual hardships. Because of these barriers, taxpayers may not claim credits to which they are entitled such as the Earned Income Tax Credit, Child and Dependent Care Credit, qualified teacher incentive credit, Student Loan Debt Relief Tax Credit, etc. The Advocate would work to reduce these barriers and to ensure that Maryland taxpayers obtain the tax credits that they are legally entitled.

Timely Resolution of Tax Disputes

Every year, thousands of businesses and individuals file appeals to dispute tax they believe was wrongly assessed by the Comptroller’s office. Many of these appeals take years to resolve. In the meantime, the appealing party’s income tax refunds may be intercepted, and their property levied. Brooke understands the delayed resolution of appeals poses a burdensome hardship to the public, both financially and mentally. Brooke will work to alleviate these burdens by ensuring that the Comptroller’s Office is sufficiently staffed to respond to and process appeals in a timely manner.

Stopping Fraudulent and Predatory Tax Preparation Services

Fraudulent and predatory preparers may take advantage of inexperienced or vulnerable filers, offering false promises for higher refunds with the intention to turn a profit at the expense of taxpayers. Data provide powerful tools in the fight to stop predatory practices. The identification and tracking of unlicensed third-party preparers will be key in weeding out these predatory practices. Brooke will call for disclosure requirements for tax preparers that require predatory preparers to clearly disclose their tax preparation fees to customers and to disclose any payments received on refund advance loans. Brooke will also create a task force to work with the State Board of Individual Tax Preparers to improve enforcement measures.

Increasing Language Accessibility to Comptroller Services

Around 20% of Maryland households’ primary language is one other than English. The Comptroller’s Office currently does not have sufficient resources to serve these households, and many households who speak a language other than English are the very tax filers who predatory tax preparers target. As Comptroller, Brooke would build up staff capacity, increase community outreach, and improve systems to engage with and provide tax services to Maryland households whose primary language is one other than English.

Increasing Transparency Through Private Letter Rulings Processes

Every year, our federal, state, and local tax laws change to some degree. New laws are passed, and regulations are added, amended, or deleted. Maryland is one of a minority of states that does not offer private letter rulings – official guidance on the application of our state laws to a business or individual’s tax status. To remedy this deficiency, on February 9, 2022, I introduced Maryland House Bill 366 which creates a Legal Division in the Comptroller’s office to focus on providing tax guidance. Having a guidance process will lower costs for both individual and business taxpayers and will also provide transparency and consistency.

Increasing Community Outreach

Brooke strongly believes that the Comptroller’s Office has an important role to play in community outreach and education. An increasing number of Marylanders are employed as gig workers and independent contractors, or are organized as sole-proprietors, which means extra tax filings and reporting requirements. Additionally, many Marylanders with low or limited income are not fully accessing tax credits that they are eligible to receive. Brooke will task the Comptroller’s 12 field offices across the state to go into communities, reach out, and engage with taxpayers on the critical information they need to know about filing taxes in Maryland. Brooke will ensure that these field offices serve as the frontline in soliciting input and ideas from taxpayers in an effort to continuously improve the Comptroller’s Office and Maryland’s tax system.

Coordinating Financial Education and Services with Community Groups

Brooke will also make sure that the Comptroller’s Office works in close coordination with Maryland’s many nonprofit, community-based, and volunteer tax preparers and financial education programs. Maryland is fortunate to have such a strong network of organizations and volunteers committed to assisting their fellow tax filers. Brooke recognizes the tremendous value these programs provide and she will ensure the Comptroller’s Office recognizes their contributions, works side-by-side with them, and supports their efforts.

Enhanced Tax Preparation, Licensing & Financial Education Assistance for Sole Proprietors

Maryland has 300,000 to 400,000 sole-proprietorships. Sole proprietors, or schedule C tax filers, can have complicated tax situations and lack easy access to high-quality tax assistance. Tax filings for this type of entrepreneur are often quite complex, and may go unfiled or submitted incorrectly without the guidance of experts. We know that small business drives employment and innovation. Navigating complex paperwork should not be a barrier to entry. Many of these filers are people of color. In Baltimore City, people of color represent 60% of all sole proprietorships. As Comptroller, Brooke will roll out enhanced tax preparation assistance for sole proprietors throughout field offices in the state to ensure that these entrepreneurs are not being unfairly taxed. Additionally, the Comptroller’s regional offices can serve as support hubs for sole proprietors for financial literacy and business licensing resources.

Leveraging Data and Reporting

Brooke believes that sound data collection, analysis, and reporting methods are critical to ensuring that Maryland’s tax system is fairly administered and works for all, while also stopping bad actors who exploit the system. Brooke will maximize the Comptroller’s Office data collection processes to drive evidence-based policymaking and operations. Sound data and reporting will be critical in achieving the policy goals referenced above, such as identifying racial inequities in the tax code and prosecuting fraudulent tax preparers and promoters. Brooke will also use data to identify unclaimed tax credits in order to drive efforts around ensuring that all Marylanders, especially low-income Marylanders, have an adequate opportunity to claim the full amount of credits they are eligible to receive. Brooke will also track and identify the top areas and instances of noncompliance that deprive Maryland of important tax revenue for more efficient enforcement. Finally, Brooke is committed to using the capacity of the Comptroller’s Office to research tax policy issues that are important to Marylanders.

See Brooke’s Tax Policy Ideas throughout her policy platform!

BROOKE’S RECORD

Brooke has led the charge to bring more transparency to government agencies, first requiring a report by the Public Information Act Ombudsman’s office regarding responsiveness of state agencies, and then drafting and championing legislation to expand and enforce sponsored legislation to expand and improve Maryland’s Public Information Acts.
Brooke has been instrumental in uncovering lackluster enforcement by the Maryland Department of the Environment through her work requiring quarterly reporting, and is championing legislation to require more public reporting of enforcement of our environmental and natural resources laws.
Brooke works with the three Main Street programs in her district to support their work and efforts and understands the importance of bringing CDCs, church groups, community school coordinators and small businesses together to ensure we are bringing help and aid to people where they live, work, play, and shop.

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