IRS, Maryland Comptroller Warn Employers to Be Wary of W-2 Scams

ANNAPOLIS, Md. (January 18, 2018) - With the 2018 tax season starting January 29, the Internal Revenue Service, Maryland Comptroller Peter Franchot and tax industry leaders urge employers to educate their payroll staff about Form W-2 phishing scams. These schemes try to trick payroll personnel into disclosing sensitive information at small and large businesses, public schools and universities, hospitals, tribal governments and charities.

“These cybercriminals will try anything to access taxpayers’ personal and financial information,” said Comptroller Peter Franchot. “Bogus emails, fraudulent identities and persuasive claims are all in their bag of tricks. That’s why my team is laser-focused on stopping and holding accountable scammers who attempt to take advantage of law-abiding Maryland taxpayers.”

In 2017, the Maryland Comptroller’s office blocked suspicious tax returns from 95 tax preparation businesses at 113 locations throughout the state. Since taking office in 2007, Comptroller Franchot’s nationally renowned Questionable Returns Detection Team has identified and blocked more than 88,000 fraudulent returns and intercepted and denied $190.2 million worth of fraudulent refunds.

Last year, the IRS said reports to from victims and non-victims about this scam jumped to approximately 900, compared to slightly more than 100 in 2016. More than 200 employers were victimized in 2017, which translated into hundreds of thousands of employees who had their identities compromised.

By alerting employers now, the IRS and its partners in the Security Summit effort hope to reduce the number of victims this year. Last year, the IRS also created a new process to report these scams.

Here’s how the scams work: Cybercriminals identify chief operating officers, school executives or others in authority. Using a technique known as business email compromise or business email spoofing, fraudsters posing as executives send emails to payroll personnel requesting copies of Forms W-2 for all employees. The Form W-2 contains the employee’s name, address, Social Security number, income and withholdings. Criminals use that information to file fraudulent tax returns, or they post it for sale on the Dark Net.

The IRS has established a special email notification address specifically for employers to report Form W-2 data thefts. Email to notify the IRS of a Form W-2 data loss and use the subject line “W2 Data Loss” so that the email can be routed properly. Do not attach any employee personally identifiable information data. Include your business name, business employer identification number (EIN) associated with the data loss, name, phone number, summary of how the data loss occurred and volume of employees impacted.

Employers can learn more at Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers. Employers also should be aware that cybercriminals’ scams constantly evolve. Finance and payroll personnel should be alert to any unusual requests for employee data.

Comptroller Franchot to Help Raise Awareness of Elder Financial Abuse

ANNAPOLIS, Md. (January 5, 2018) – Comptroller Peter Franchot and Attorney General Brian Frosh will kick off PROTECT Week on Monday, January 8 at Charlestown Retirement Community in Catonsville at an event to raise awareness about elder financial abuse and tax fraud prevention. The Comptroller will participate in the week-long campaign, which will hold several events focused on how Marylanders can avoid becoming a victim of these crimes (see schedule below).
Guidewell Financial Solutions, a Maryland nonprofit credit counseling agency, is leading the statewide campaign sponsored by Wells Fargo in partnership with the Offices of the Comptroller and Maryland Attorney General and several other agencies.
“Over the last 10 years, my office has detected and blocked more than 80,000 fraudulent tax returns worth over $185 million,” said Comptroller Franchot. “Victims of tax fraud – many of whom are vulnerable, older Marylanders – sometimes deal with the impact of this abuse for years in silence. That’s why education and awareness are key to keeping seniors safe.”
“There are huge risks that older victims of financial exploitation can face in terms of their personal financial health and overall economic well-being,” said President and CEO of Guidewell Financial Solutions Helene Raynaud. “We’re legally obligated to report suspected financial exploitation of older Marylanders. Raising awareness about the prevalence of this issue is imperative to prevention.”
Financial elder abuse is when someone uses an older adult’s property or money improperly or illegally. PROTECT Week is to raise awareness, to help Marylanders recognize the warning signs and to provide tools to intervene early when an older adult is in danger.
The schedule of events is as follows:
• Monday, January 8, 10:30 a.m. to Noon
Kickoff news conference at Charlestown Retirement Community Main Auditorium: 215 Maiden Choice Lane, Catonsville, MD 21228
Comptroller Franchot and Attorney General Frosh will kick off a presentation to safeguard financial well-being and to prevent financial harm and elder financial abuse. Also taking part are Wells Fargo, Maryland Volunteer Lawyers and Robert E. Frey of the Attorney General’s Consumer Protection Division.
• Tuesday, January 9, 10:30 a.m.
Tele-Town Hall with AARP. To participate, register here.
Comptroller Franchot along with AARP Maryland and the AARP Fraud Watch network will take part in a telephone town hall with Guidewell Financial Solutions and Robert E. Frey from the Attorney General’s Consumer Protection Division to help Marylanders learn how to spot and avoid scams.
• Wednesday, January 10, 1 to 2:30 p.m.
Holiday Park Senior Center, Multi-Purpose Room: 3950 Ferrara Drive, Silver Spring, MD 20906
The Comptroller’s Office will be part of a presentation on elder financial abuse fraud featuring EverSafe, the Maryland Consumer Rights Coalition and the Montgomery County Office of Consumer Protection. Speakers also will address policy issues for the first day of the 2018 Maryland Legislative Session.
• Thursday, January 11, 10:30 to 11:30 a.m.
Riderwood, Montgomery Station Maryland Room: 3120 Gracefield Road, Silver Spring, MD 20904
Comptroller Franchot will join representatives from the Montgomery County Office of Consumer Protection, the Montgomery County State’s Attorney’s Crimes Against Seniors Division and the Maryland CASH Campaign to provide tips and highlight resources available to seniors to help protect their identities and prevent financial abuse and loss.
• Friday, January 12, 9:30 to 11 a.m.
Charlotte Hall Veterans Home: 29449 Charlotte Hall Road, Charlotte Hall, MD 20622
Deputy Comptroller Sharonne Bonardi will take part in a presentation for Maryland’s veteran community on tax assistance and resources to help safeguard financial well being. Also participating are AARP, the Maryland CASH Campaign and Robert E. Frey from the Attorney General’s Consumer Protection Division.
Anyone who suspects that an older adult is being mistreated or is the victim of financial exploitation or fraud is urged to call the Maryland Department of Aging at 1-800-332-6347 or the police.
410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody:
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Franchot Announces Opening of Tax Season January 29

ANNAPOLIS, Md. (January 5, 2018) – Comptroller Peter Franchot announced today that Maryland will begin processing personal income tax returns for Tax Year 2017 on January 29 – the same day the Internal Revenue Service begins accepting returns. The Comptroller’s Office will not immediately process a state tax return if W-2 information is not on file. Employers are required to report wage information to the Comptroller on or before Jan. 31.

Processing of business tax returns begins Monday, January 8.
This year, the filing deadline for 2017 tax returns is Tuesday, April 17 rather than the traditional April 15. In 2018, April 15 falls on a Sunday and Emancipation Day – a legal holiday in the District of Columbia – falls on April 16, which pushes the filing deadline to the following day.

Last year, the Comptroller’s Office stopped accepting income tax returns from 95 companies doing business in 113 locations for submitting numerous highly suspicious returns. Collectively, they filed thousands of state returns that the agency believed were fraudulent.

“In 2017, my office blocked more than 10,000 fraudulent returns worth more than $16 million,” said Comptroller Franchot. “I urge Marylanders to be on the lookout for those who want to steal taxpayers’ identities and personal financial information. Any taxpayer with concerns about a tax preparation business should call my office. We remain vigilant in our efforts to thwart these unscrupulous practices.”

Taxpayers are encouraged to file their returns electronically for the fastest possible processing and to ensure they receive all possible refunds. A list of approved vendors for use in filing your electronic return can be found at

Free state tax assistance is available at all of the agency’s 12 taxpayer service offices Monday through Friday from 8:30 a.m. to 4:30 p.m. A list of office locations can be found at

For more information on any tax-related matter, please visit Comptroller’s website at or call 1-800-MD-TAXES (1-800-638-2937) or 410-260-7980 in Central Maryland.

410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody:
410-260-6346 (office); 443-924-1473 (mobile)

IRS Says Standard Mileage Rates for 2018 to Increase From Rates for 2017

ANNAPOLIS, Md. (December 28, 2017) - The Internal Revenue Service has issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
  • 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
  • 14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased one cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. More information may be found at

IRS Has Tips for What to Do Before the Tax Year Ends on December 31

ANNAPOLIS, Md. (December 27, 2017) - As tax filing season approaches, the Internal Revenue Service is reminding taxpayers that there are things they should do now to get ready for filing season. Here are some tips to get ready:

  • For most taxpayers, Dec. 31 is the last day to take actions that will affect their 2017 tax returns. For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2017 count for the 2017 tax year, even if the bill isn’t paid until 2018. Checks to a charity count for 2017 as long as they are mailed by the last day of the year.
  • Taxpayers over age 70 ½ are generally required to receive payments from their individual retirement accounts and workplace retirement plans by the end of 2017, though a special rule allows those who reached 70 ½ in 2017 to wait until April 1, 2018, to receive them.
  • Most workplace retirement account contributions should be made by the end of the year, but taxpayers can make 2017 IRA contributions until April 18, 2018. For 2018, the limit for a 401(k) is $18,500. For traditional and Roth IRAs, the limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age 50 or older.
  • Taxpayers should be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
  • Taxpayers who have moved should tell the U.S. Postal Service, employers and the IRS. To notify the IRS, mail IRS Form 8822, Change of Address, to the address listed on the form’s instructions. For taxpayers who purchase health insurance through the Health Insurance Marketplace, they also should notify the Marketplace when they move out of the area covered by their current plan.
  • For name changes due to marriage or divorce, notify the Social Security Administration so the new name will match IRS and SSA records. Also notify the SSA if a dependent’s name changed. A mismatch between the name shown on your tax return and the SSA records can cause problems in the processing of a return and may even delay a refund.
  • Some refunds cannot be issued before mid-February. By law, the IRS cannot issue refunds before mid-February for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb 27, 2018, if they chose direct deposit and there are no other issues with the tax return.
  • Some Individual Taxpayer Identification Numbers must be renewed. Any Individual Taxpayer Identification Number not used on a tax return at least once in the past three years will expire on December 31, 2017. Additionally, all ITINs issued before 2013 with middle digits of 70, 71, 72 or 80 (Example: 9XX-70-XXXX) will also expire at the end of the year. As a reminder, ITINs with middle digits 78 and 79 that expired in 2016 can also be renewed. Only taxpayers who need to file a U.S. federal tax return or are claiming a refund in 2018 must renew their expired ITINs. Affected ITIN holders can avoid delays by starting the renewal process now.
  • Those who fail to renew before filing a return could face a delayed refund and may be ineligible for some important tax credits. More information, including answers to frequently asked questions is available on
  • Keeping copies of tax returns is important. Taxpayers may need a copy of their 2016 tax return to make it easier to fill out a 2017 tax return. Some taxpayers using a software product for the first time may need to provide their 2016 Adjusted Gross Income, or AGI, to e-file their 2017 tax return.

Taxpayers who do not have a copy of their 2016 return and are existing users can log in to if they need their AGI. Otherwise the IRS will mail a Tax Return Transcript if requested online or by calling 800-908-9946. Plan ahead. Allow five to 10 days for delivery. Visit the IRS’ website to learn more about identification verification and electronically signing tax returns.

IRS Warns Taxpayers of Email Scam Targeting Hotmail Users

ANNAPOLIS, Md. (December 14, 2017) – The Internal Revenue Service is warning taxpayers and tax professionals of a new email scam targeting Hotmail users that is being used to steal personal and financial information.

The phishing email subject line reads: “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX.” The email leads taxpayers to sign in to a fake Microsoft page and then asks for personal and financial information.

“Cyber thieves are always on the hunt to take Maryland taxpayers’ money,” Comptroller Peter Franchot said. “That’s why my staff and agents remain vigilant in alerting consumers to scams like this, particularly at holiday time when people are distracted by the holiday rush.”

The IRS has received more than 900 complaints about this new phishing scheme that seems to exclusively target Hotmail users. The suspect websites associated with this scam have been shut down, but taxpayers should be on the lookout for similar schemes.

Individuals who receive unsolicited emails claiming to be from the IRS should forward it to and then delete it. It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. For more information, visit the Tax Scams and Consumer Alerts page on

The IRS reminds tax professionals to be aware of phishing emails, free offers and other common tricks by scammers. Tax professionals who have data breaches should contact the IRS immediately through their Stakeholder Liaison at the webpage for Data Theft Information for Tax Professionals.

Comptroller Franchot’s Statement on New Revenue Estimates

ANNAPOLIS, Md. (December 13, 2017) – The Board of Revenue Estimates voted today to reduce by $73.2 million the revenue projection for the State of Maryland for Fiscal Year 2018 and to increase by $11 million the estimate for fiscal year 2019. That establishes a $17.6 billion revenue estimate for the next fiscal year, which begins in July 2018.

The Board’s actions are largely driven by continued weaker-than-anticipated sales tax revenues as consumers remain reluctant or unable to spend. Additionally, non-nexus online shopping continues to cut into tax revenues and hinders the growth of brick-and-mortar Maryland retailers. The negotiations over tax bills in Washington continue to be monitored; once final action is adopted, the impact on Maryland revenues will be added into future revenue estimates.

Following are Comptroller Franchot’s remarks, as prepared for delivery:
“I know a lot of Marylanders and my colleagues at the state and local levels are wondering how Maryland will be impacted by the federal tax reform legislation being considered by Congress.

And like each of you, it is my hope that common sense will prevail and that our lawmakers will think long and hard before enacting provisions that will have dramatic effects on middle-class families and state revenues.

The revenue projections that have been brought to this Board for approval were meticulously and carefully crafted based on what we know … and the trends we are seeing … and the data we are receiving. Once Congress approves a final version of the tax reform legislation, our experts here will work diligently to determine its impact on Marylanders’ income and our state’s fiscal future and propose revisions to our revenue estimates where appropriate.

In other words, we’re doing the best we can with the information we have. But, here’s what we do know and here’s what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession, with an unemployment rate hovering around 4 percent and stock market trends that are headed in the right direction, the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven’t fully recovered.

We continue to see that with declining sales and use tax revenue. With wages and salaries that are lackluster at best. Even those who are employed with good-paying jobs have – in more cases than not – elected to put their disposable incomes in their piggy banks instead of putting money back in our local economy. And who can blame them?
With all the uncertainty that’s being produced by Washington at an almost daily basis, coupled with the continued fiscal and economic challenges that our state and our communities face. It’s understandable why so many of our citizens remain hesitant and timid about how they spend their hard-earned incomes.
Given the challenges that our working families and small
business owners face and the potential impact that will emerge from federal tax reform legislation, it is my hope that the General Assembly will continue to exercise fiscal restraint as they consider legislation that will impact the fiscal health of our state and our citizens.
I renew my call for a moratorium on new taxes and fees, because the last thing Maryland families and businesses need are further disruptions to their budgets in a time when some of our friends and neighbors are struggling to make ends’ meet and pay the bills.
At the state level, we have to be careful and smart on how we spend the taxpayers’ dime and simply forego the things that we want… in order for to pay for the things that we need. And I hope that the General Assembly will once again consider legislation that will require online retailers to collect and remit sales and use taxes.

And I want to emphasize that this is not a new tax … or a new fee … this is simply leveling the playing field for our small businesses that diligently comply with our sales and use tax laws against online retailers who have gotten away with not doing so because of legislative inaction. Because at the end of the day, government should not be picking winners and losers – and when we force small businesses to compete with online retail giants that offer convenience, lower prices, and don’t collect and remit sales tax we are putting our brick-and-mortar stores and main street retailers at a tremendous disadvantage.

I was proud to testify in support of the Main Street Fairness Act that Senator Madaleno and Delegate Hixson introduced last session, and I do hope that legislators can work in a bipartisan fashion to advance this legislation in the 2018 General Assembly session.
So, let me close by urging those of you who have not yet completed your holiday shopping to go out and support our small businesses and local retail stores that not only offer great and quality products, but serve as the bedrock of our communities and our state economy.”

View the data here.



410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody:
                                        410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Launches Petition to Rally Support for Craft Beer Legislation

ANNAPOLIS, Md. (December 11, 2017) – As a statewide coalition of brewers, consumers and stakeholders gear up for the effort to modernize Maryland’s antiquated and dysfunctional beer laws, Comptroller Peter Franchot today launched a petition drive in support of his proposed Reform on Tap Act of 2018.

Comptroller Franchot announces this new petition drive with the goal of collecting a minimum of 6,541 names – representing the total number of jobs the craft beer industry supports in the state, according to a recent study conducted the Maryland Bureau of Revenue Estimates.

Marylanders can sign the petition by going to the Comptroller’s website, Petitions will also be distributed at events and breweries across the state.

“Marylanders from across the state and across every demographic overwhelmingly support reforming our laws to allow our homegrown craft brewing industry to grow and become the national leader,” said Comptroller Peter Franchot. “This petition drive will once again re-affirm the fact that Marylanders want this state to be supportive and welcoming of these family-owned small businesses and manufacturers that do so much for our communities and our state’s economy.”

Surveys have consistently showed Marylanders overwhelmingly support the craft brewing industry and updating Maryland’s antiquated laws governing the production, distribution and sale of Maryland craft beer.

A recent online survey taken after Comptroller Franchot released the Reform on Tap Act showed that 93 percent of respondents believe that Maryland’s laws for brewers are too restrictive. Additionally, more than 92 percent of respondents feel that there should be no limits on how much beer a brewery can produce or sell in its taproom.

The Maryland craft brewing industry had an overall economic impact of $637.6 million and supported or created 6,541 jobs in 2016, according to an economic impact study conducted by the Bureau of Revenue Estimates that was released earlier this fall.

The study found that when the sale and distribution activity of non-Maryland craft beer is included in the projection, the estimated economic impact grew to $802.7 million. The industry contributed $53.1 million in state and local revenues and $55.3 million in federal revenues, which directly supports investments in education, public safety, transportation and the environment.

In 2016, Maryland craft breweries directly employed 430 workers and had an indirect and induced effect on 264 jobs, yielding a total of $28.4 million in wages and generating $143.7 million in economic output, according to the study.

Both alcohol distributors and retailers (bars and restaurants) also greatly benefited from Maryland’s craft brewers, with a direct, indirect and induced effect on almost 6,000 jobs, about $200 million in labor income and nearly $500 million in economic activity, the report found.

410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody:
410-260-6346 (office); 443-924-1473 (mobile)

Taxpayers with Expiring ITINs Should Renew before December 31

ANNAPOLIS, Md. (December 6, 2017) – The Internal Revenue Service is reminding taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to submit their renewal applications as soon as possible. Failing to renew them by the end of the year will cause refund and processing delays in 2018.

Over the summer, the IRS mailed letters to more than one million taxpayers whose ITINs are set to expire – those with middle digits 70, 71, 72 or 80. Any ITIN that has not been used on a federal tax return at least once in the last three consecutive years also will expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application by the deadline.

Who should renew an ITIN?

• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.
• Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.
• Taxpayers who are eligible for or who have a SSN should not renew their ITIN but should notify IRS both of their SSN and previous ITIN so that their accounts can be merged.
• Taxpayers whose ITINs have middle digits 78 or 79 that had already expired and were never renewed should renew their ITIN if they will have a filing requirement in 2018.
To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.

There are three ways to submit the W-7 application package:

• Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
• Taxpayers have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
• In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center instead of mailing original identification documents to the IRS. When making an appointment, be sure to indicate that this involves an ITIN renewal application.

Visit for more information.

Thieves Are Using W-2 Scam to Get Employee Data, Tax Information

ANNAPOLIS, Md. (December 1, 2017) – The IRS is warning business, payroll and human resource communities about a growing W-2 email scam by which criminals are gaining access to W-2s and other sensitive tax information that employers have about their employees.

During National Tax Security Awareness Week this week, the IRS has been partnering with state tax agencies – including the Maryland Comptroller’s Office and tax industry stakeholders – to remind people about the importance of data protection.

W-2 scams put workers at risk for tax-related identity theft. The IRS recommends that all employers educate employees about this scheme, especially those in human resources and payroll departments. These employees are usually the first targets.

Here are five warning signs about the scam:

• The thief poses as a company executive, school official or other leader in the organization.
• Scam emails often start with a simple greeting. It can be something like, “Hey, you in today?”
• The crook sends an email to an employee with payroll access and requests a list of all employees and their Forms W-2. The thief may even specify the format in which they want the information.
• Thieves use many different subject lines and use words like “review,” “manual review” or “request.” In some cases, the thief may send a follow up email asking for a wire transfer.
• Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft occurred. Criminals usually try to use the information quickly, sometimes filing fraudulent tax returns within a day or two.

This scam is such a threat that a special IRS reporting process has been set up. If you think you were a victim of this scam, visit to find out how to report it.