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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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I received an assessment from the Comptrollers office stating

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I received an assessment from the Comptroller's office stating that for tax year 2005 I owe $1,140.88, not counting interest and penalty. I no longer had any tax backup records for that year and the state had essentially no information - maybe one number they got from the feds on which to make their determination - a notice of adjustment of taxes due. So I was granted a hearing with the Maryland Comptroller's office, at which time I requested a more detailed breakdown of the numbers. I was later sent a Personal Income Tax Computation Notice. However, the notice stated a Maryland Income Tax of $856 and a Baltimore City income tax of $583.68. That would be a piggyback tax of 68.2%, which can't be correct. So I was asked to obtain an "MFTRA X Literal Transcript" for 2005 from IRS. I appealed to the Maryland Tax Court based on the fact they do not have sufficient information to accurately evaluate my tax liability. It was a guess based on a federal adjustment.

According to the official Maryland website, the burden of proof is on the taxpayer. I see three issues here: 1) mistakes Maryland tax people are making when calculating the numbers are evidence of their lack of knowledge about the facts, 2) I should not be required to obtain an official transcript of my own federal taxes for 2005 due to the principle of federalism as stated in the U.S. Constitution, and 3) placing the burden of proof on the state taxpayer is also unconstitutional due to federalism. Is federalism a basis for appeal if I lose my case in Maryland Tax Court?
Submitted: 5 years ago.
Category: Tax
Expert:  socrateaser replied 5 years ago.
Is federalism a basis for appeal if I lose my case in Maryland Tax Court?

A: The case law surrounding federalism and state taxes is actually damn thin. Only one case found for any U.S. jurisdiction or federal agency, but it's from the U.S. Supremes, so it matters:

  • “...the background presumption [is] that federal law generally will not interfere with [the] administration of state taxes.” National Private Truck Council, Inc. v. Oklahoma Tax Comm'n, 515 U.S. 582, 588, 115 S.Ct. 2351, 2355, 132 L.Ed.2d 509 (1995) (citing principles of comity and federalism).

So, I think the federalism argument is a nonstarter.

Hope this helps.

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