How to Deal with a Tax Lien in Maryland

Andrea Miller
Andrea Miller
March 06, 2019

  • If you do not pay your Maryland state taxes, the comptroller may issue a tax lien. This is a legal claim on your property.
  • A tax lien allows the state to seize accounts, wages, and property to resolve your tax debt.
  • A tax lien may damage your credit score and can only be released when the tax debt is paid in full.

Taxpayers who owe past-due state taxes may be able to qualify for a Maryland tax lien release. A tax lien gives the state tax agency a claim to your property, including bank accounts, earnings, real estate, vehicles, and other assets. If you do not make arrangements to pay your taxes, these items can be seized to resolve your debt.

State Tax Collections

If your employer does not withhold enough money from your wages to meet state tax obligations, you may find that you have a balance due at tax time. This can be prevented by adjusting your withholdings and/or arranging to withhold additional funds to cover your taxes.

If you owe taxes, you will receive an income tax notice from the comptroller’s office. This is sent by mail to the personal or business address on file. You can receive a notice whether or not you have filed your annual tax return.

How to Deal with a Tax Lien in Maryland

Image via Flickr by lendingmemo.com

If you do not respond to this initial notice, you will receive an assessment notice that details your past-due balance along with applicable interest and penalties.

Notice of Tax Lien

If you have not responded to state tax bills, the Comptroller of Maryland can file a notice of tax lien. This is done through the circuit court where you live or where your business is located. The tax lien is recorded as a public record, and it lets creditors know that the state has a claim on your property. This will damage your credit score and can make it difficult to qualify for new credit, such as a mortgage, credit card, or car loan. If you need security clearance for your job, this status may be affected by the tax lien.

The state can also seize any federal tax return or outstanding vendor payments to which you are entitled. These funds can be used to repay your Maryland tax debt. If the state intends to take this collections route, you will receive a Notice of Intent to Offset. You will also be charged a fee for any return or payment that is seized to offset your state tax balance.

With a salary lien, the state can seize a portion of your salary to pay your past-due tax debt. Funds in your bank accounts can also be seized.

How To Get a Tax Lien Released

The only way to get a tax lien released is to pay your Maryland tax balance. After doing so, you can visit the applicable circuit court to obtain a certified copy of the lien release. This can be submitted to the three major credit agencies so your credit report will reflect the lien release. Although the Comptroller may report this information to the credit bureaus, it sometimes takes weeks or months for the office to do so.

Making Maryland Tax Payments

Even if you cannot afford to pay your full tax balance, you can arrange to pay part of the balance due. This could help you avoid a tax lien.

Tax payments can be made online, through a direct debit program, or through the mail with a check or money order. You can also set up a payment agreement. This allows you to pay your Maryland tax balance over time.

Other Collections Actions

In addition to placing a lien on your property, the state can turn your balance over to an external collection agency. This agency will escalate attempts to collect your debt, resulting in further damage to your credit and additional penalties and fees.

Maryland posts the names of those who owe taxes to the state online through its “Caught in the Web” program. This can damage your personal and business reputation.

Each county handles tax liens differently. For example, real estate and other property that is subject to a tax lien is auctioned off periodically by Baltimore County. Any proceeds, less the cost of the sale, are used to resolve your tax balance.

If you have questions about your tax debt, you can call the Comptroller’s office at 410-974-2432 or toll-free at 1-888-674-0016.

Disputing Your Tax Assessment

If you disagree with your Maryland tax assessment, you have the right to dispute the Comptroller’s findings. Your appeal will be heard by an administrative hearing officer from the Hearings and Appeals Section of the State Comptroller’s Compliance Division.

You must request an appeal in writing. This can be done online at the Maryland Online Hearing Request page. You can also email your request to cdhearings@comp.state.md.us or mail it to Comptroller of Maryland, Hearings and Appeals Office, 301 West Preston Street, Room 315, Baltimore, Maryland 21201-2383.

Include any missing information with your appeal request. This may resolve your appeal without the need for an in-person hearing.

If you file an appeal within the allotted time, you will receive a mailed notice with the date and time of your hearing. This will be an informal hearing with a hearing officer.

Be sure to bring your photo ID with you to the hearing. You can be represented by an attorney, accountant, or tax professional during these proceedings. You will be asked to present your case along with supporting information. These details will be considered by the hearing officer.

After the hearing, you will receive a Notice of Final Determination that indicates the decision of the hearing officer. If you disagree with this decision, you have 30 days to file a subsequent appeal.

If you’re struggling to pay federal or state taxes, the team at Solvable can help. We’ll gather information about your tax debt to match you with a well-regarded debt relief agency. Get started today to avoid a tax lien and other financial complications.

 

Let us match you with the best tax debt relief company