CPA Resources
CPA Resources

Corporate reporting 'failure to file' notices explained

There has been some confusion over "Failure to File" notices sent recently to Maryland business with regard to the state's corporate reporting requirement.

Beverly Richard, chair of the Maryland Association of CPAs' State Tax Committee, offers the following explanation:

"Many taxpayers were erroneously included on the 'list' of possible entities subject to the informational reporting. If your entity received this notice, you MUST go online and file the exemption if you are not subject to the reporting. This will resolve the issue.

"The exemption is simply the federal EIN and a checkbox to say you are exempt because (single entity, S corporation, pass thru, insurer, etc.). It only takes a moment, but it is the way to resolve the issue.    

"Many firms went online and filed the exemption for all of their clients who were not in a combined report (including S corporations and P/S) because we have no way of knowing who received a tax alert from the Comptroller. This was a proactive step to attempt to avoid as many notices as possible.

"If your entity was identified by the comptroller as possibly subject to the reporting, you MUST either file a report or file an exemption. The Comptroller's Office just sent out 15,000 notices, and they will not manually handle each one. They don’t want phone calls, letters or e-mails; they just want you to go online and file the report or the exemption."

The following notice appears on the Comptroller's Web site:

Corporate information reporting: The Comptroller's Office has notified over 15,000 corporations that they have not filed a corporate information report as required by law. We will respond as promptly as possible to telephone and e-mail inquiries. However, due to the heavy volume of calls and e-mail recently received, we are unable to respond as promptly as normal.

If you received a "Notice of Failure to File" and you are not a member of a corporate group, no penalties will be assessed if you file for an exemption. To do so, access our corporate reporting system. Next, in the "File for an Exemption" box, enter your FEIN and reason for the exemption and click on "Submit." You will receive a confirmation number that you should record for future reference.

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