Md. Names 'Worst' Tax Scofflaws

Franchot Says 50 Businesses And Individuals Owe A Total Of Nearly $6 Million

April 15, 2009|By Gus G. Sentementes | Gus G. Sentementes,gus.sentementes@baltsun.com

Calling them the "worst of the worst," Comptroller Peter Franchot on Tuesday released a list of 50 businesses and individuals who collectively owe Maryland nearly $6 million in taxes and who, in many cases, have avoided paying taxes for years.

The disclosure of the state's worst tax scofflaws came on the eve of the deadline for filing returns, and a day after Franchot's office reported that overall tax collection revenues were down 3.2 percent last month amid a struggling economy.

He struck an indignant tone when talking about the scofflaws, and described how, earlier in the day, he had visited an aging public school in Prince George's County that could use that revenue.

"These are the worst of the worst," Franchot told a news conference at a state office building in Baltimore. "These individuals and businesses in effect thumb their nose at the state of Maryland and say, 'We don't care about taxes.' "

The effort is intended to put public pressure on those who owe after other tactics have fallen short, Franchot said. The names of the 50 people and businesses who owe the most in taxes are on the comptroller's Web site.

The comptroller's office has been targeting the worst scofflaws with extra enforcement since 2000, when the office was run by Franchot's predecessor, William Donald Schaefer. In all the cases on this year's list, Franchot said, the businesses and people have flouted paying taxes for years, and the state has taken various forms of civil action against them, including fines and liens.

Franchot said the state's tax compliance enforcement efforts - targeting these so-called "worst of the worst" - have brought in more than $53 million since 2000.

In 2001, the General Assembly enacted a two-month tax amnesty in hopes of collecting $70 million in back taxes. Only $39 million was collected.

Franchot noted new technology in which the state is investing roughly $87 million to better track down those who owe taxes. It could help bring in $200 million in delinquent taxes over the next four years, and $80 million to $100 million in subsequent years, he said.

"The vast majority of people and businesses pay their taxes in full," Franchot said. "These folks wantonly disregard our tax laws. It's our communities that are being cheated."

The nearly $6 million owed by the 50 businesses and people is a small fraction of the roughly $13 billion in individual, corporate, sales and use and other taxes that was collected by Maryland in fiscal 2008, according to figures from the comptroller's office.

The person with the highest income tax liability is Leon Clements of the 15900 block of Jerald Road in Laurel, who owes $397,787.37 in taxes, interest and penalties, according to the comptroller's office. A woman who answered the phone at the address said he did not live there, but she could reach him with a message.

The company with the greatest business income tax liability is Engineered Framing Systems, in the 8700 block of Center Park Drive in Columbia, which owes $476,542.52 in taxes, interest and penalties, the state says. John J. Hildreth, a company officer, has been assessed with paying that amount, according to the comptroller's office. No one answered the phone listed as belonging to the company.

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