In a PIckle. VA resident & didn't know I had to pay MD taxes

9 Replies

I live in Virginia and just recently found out that I should have been paying income taxes on my Maryland rental condo property to Maryland instead of Virginia.  I moved to Virginia in 1980 so that would be 36 years...Ouch.   

Any thoughts on how to handle this without paying another 36 years of taxable income to the state of Maryland?

@Stanley Gray I have a feeling this a question best left to a very experienced tax professional, but I am curious to see the responses :) Hope you are able to get this worked out.

@Stanley Gray if they haven't found out yet....

How much is the condo generating? Could be that you don't have a filing requirement in MD.

For many years it was generating little to no income but in the last 10 years or so it has been generating 4k - 5k of net income as reported on my federal return.

Brandon Hall, would you recommend a MD CPA or a MD Lawyer who specializes in MD taxes?  Do you have anyone you would recommend?

You could use Brandon. He's in DC - the CPA doesn't have to be in the same state as yourself :) 

Try the naive approach - - call them an say: "I've moved to VA and need to catch up on taxes, What do I do?"

Use your conscience as to how to answer questions that may arise.

I am an experienced CPA who worked for the IRS, too. In the years where there was no income or a loss, you may not need to file a return, since there was no tax due. Typically, there is a statue of limitations which begins with the actual filing date, so if the filing hasn't been done, there's no statute in place yet. I know for a fact that if you find the before they find you, there's likely to be less fallout. I have written letters requesting abatement from penalty under the due cause provisions to abate thousands in penalties successfully, and then work a plan out for the client. Most states and the IRS will allow you to spread it out over several years, because getting it over time is better than them not getting it at all!

Jim Kennedy CPA

Call your tax lawyer. Good luck.

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