State of Maryland Imposing Tax Penalties Before Taxes Are Due?

So, it’s come to this.Revenues are obviously down throughout the country and state and local governments are facing shortfalls.But the State of Maryland has an interesting way of dealing with the problem, if a letter we received yesterday is any indication.

My husband and I filed our state tax return electronically (via our tax preparer) during the first week of April.The balance due to the State was mailed on April 6 and the check was cashed on April 14^th.So far that sounds reasonable.

Here’s the rub.On April 16th, we received a letter from the Maryland State Revenue Administration Division, saying that we owed a balance on our 2007 taxes, along with a penalty for those overdue taxes.That letter from the State was dated April 14^th, a day(we all know) is one day prior to the due date for taxes.Hmmmmm.

We’ve sent them a letter, suggesting that there was an error…our taxes were paid on time…our check was cashed by the State…and we don’t owe a penalty.I fear this won’t be the end.I’ll keep you informed.