If you own or operate a business in Maryland you have an obligation to keep your charter in good standing and remain current on all tax obligations. Failure to keep current on all state tax obligations can have devastating consequences for your business. Maryland has the power to impose penalties and fines, seize your business and/or personal assets, and even prevent you from doing business in the state.
Is your business delinquent on Maryland state tax filings and/or payments? You need the help of an experienced Maryland tax attorney. Call Gabaie & Associates, LLC to schedule a free consultation today. We can review your case and help to devise the best possible solution for your specific situation.
Financial Interest, Penalties, and Fees
If you don't file a return and/or satisfy your Maryland tax obligations, the state has the authority to impose financial penalties, fines, and late fees. The longer your tax liability remains unpaid, the more in interest and penalties you'll be required to pay. Unlike the IRS, the state of Maryland does not impose a statute of limitations for collecting unpaid taxes. As a result, interest, and penalties can rack up an expensive bill that will always be collectible by the state, putting your business in an unmanageable financial position.
If you are an officer owning at least 20 percent of a corporation, you can be held personally liable for the unpaid taxes and any penalties and interest that accrue.
Liens and Levies
Your business and/or personal property may not be safe if you become delinquent on your Maryland state tax obligations. If the state believes that you are not sufficiently motivated by financial penalties, it may decide to utilize a tax lien and/or levy.
A tax lien, which basically secures your property as collateral for unpaid taxes, can be devastating for your business. All other debts and liens placed on your property will be subordinate to Maryland's tax lien. As a result, lenders may be hesitant to issue a line of credit or work with your business, for fear that they will not be able to recoup their own costs. This can hamper any new business opportunities that you would have been able to embrace had you paid your tax bill on time.
The state can also seize your business assets, including (but not limited to) cash on hand, equipment, real property, and vehicles. The value of the property seized by the government will offset your tax liability.
Corporation Charter Forfeiture
Your corporate charter, which gives you the ability to enjoy the benefits of operating as a business in the state of Maryland, can be subject to forfeiture if you have an unpaid tax liability. Common reasons that the state may decide to repeal, annul, and/or revoke a corporate charter include unpaid tax liabilities, unpaid unemployment contributions, and failure to make reimbursement payments. Consequences of a forfeiting your Maryland corporate charter include:
- Personal responsibility for business debts and liabilities;
- Possible fraud charges if you continue to operate after forfeiture;
- Loss of access to Maryland state courts; and
- Loss of tax advantages extended to business entities in the state.
Forfeiture of your Maryland corporate charter is perhaps the most serious consequence of your tax troubles. However, you will have the opportunity to satisfy your unpaid tax liability before your charter is officially annulled. If you can't pay your bill all at once we can help you negotiate an installment plan or offer in compromise with the state.
Business Tax Issues? Contact a Maryland Tax Attorney
Are you or your business in jeopardy because you've failed to pay your taxes? It's important to find a way to fix the situation before your business is jeopardized. The Maryland tax attorneys at Gabaie & Associates, LLC can help to devise a strategy to get you back on the right track. Call today to schedule your free consultation with our skilled legal team.
