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I've had a bit of a dispute recently with the Maryland state comptroller over the comptroller's handling of communication regarding a past income tax filing and I'm wondering what legal recourse I have and whether it's worth pursuing, given the relatively small amount of money that is at stake. Here is the story:

In 2011 I moved to a new address, both my old address and new address are in Maryland. I filed my 2011 taxes using the Maryland i-file system, which is like a free online turbotax for state taxes. In September and again in November of 2014, the state sent me a letter to my old address notifying me of an audit which found a mistake that I had made in filing my taxes (note again that I used the Maryland i-file system to file taxes that year). Note also that my 2011 taxes as well as all of my subsequent taxes were filed from my new address where I have been living since May of 2011. So these letters did not get to me until December when my tennants that are living at my former property gave them to me. After several phone calls and emails with various departments of the comptroller, I came to understand that the comptroller wanted $600 in taxes plus a $60 penalty fee and around $200-300 in interest (at the ridiculous rate of 13% anually). I sent a request on April, 22 of 2015 for the penalty fee and interest to be forgiven, which received an automated acknowledgement, but was never responded to. Now, a few weeks ago on May 5, 2016 someone finally contacted me to remind me of my debt and after exchanging several e-mails has agreed to forgive the $60 penalty fee but is unwilling to forgive any of the interest. I believe that the interest dating back to at least September of 2014 should be forgiven as well. At this point the total bill has grown to about $950 with interest, which I finally decided to just pay to avoid further interest.

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Can you sue? The answer to that is almost always yes.

In this story, if you wanted to dispute such a small amount, you should have done so before paying it. It's always easier and almost always cheaper to not give someone money than to give it and then try to get it back!

(There are some situations where you have to pay an amount in order to dispute it – e.g., certain government fines, and some IRS bills. The agencies will make it clear when that's the case, and presumably you would only have paid if you were intending to follow their dispute process.)

  • Good to know. I didn't want to compound the problem by not paying it, in the event I don't win. I really feel like I'm being scammed by the state in this scenario. – kjgregory May 19 '16 at 17:09
  • This is taxes, which is where that normally applies. – Joshua Apr 12 at 14:24

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