WASHINGTON – Got a hard-luck tax story? Chances are it won’t top the Lanham resident who was hit with $651,624 in extra taxes after a 2001 audit, or the Centreville taxpayer who was assessed an additional $491,423.
Those two extraordinary assessments helped boost ZIP codes in Lanham and Centreville into the top 10 in the state for the highest combined post-audit tax assessments for 2000 and 2001.
Lanham was highest and Centreville was in third place, according to a Capital News Service analysis of personal income tax audit records for those two years from the Maryland Comptroller’s Office.
“Just one extraordinary assessment can throw the numbers out of kilter,” said James Loftus, deputy director of compliance in the Comptroller’s Office. A few large assessments can “distort” the amount of taxes assessed for each ZIP code after audits of personal income tax returns, he said.
That was the case with Lanham ZIP code 20706, where the 188 audits in 2000 resulted in a total assessment of $147,431 but the 191 audits a year later were assessed a total of $805,447. Most of the difference was due to the single audit that led to the $651,624 assessment.
In Centreville ZIP code 21617, the number of audits remained the same, at 22 each year. But the assessments jumped from $11,097 in 2000 to $500,187 in 2001.
Statewide, the number of audits remained relatively stable, going from 21,478 in 2000 to 22,558 a year later. Assessments rose at a slightly faster rate: Taxpayers in all ZIP codes owed $14.8 million in extra taxes in 2000 and $16.3 million in 2001.
Along with ZIP code 20706 in Lanham, six other Prince George’s County areas were among the 10 ZIP codes with the highest tax assessments — 20744, 20747, 20774, 20748, 20735 and 20721.
Loftus found it “interesting” that Prince George’s had several ZIP codes in the top 10, but he said could not explain the reasons, except to say that the comptroller’s office did not single those areas out for audits.
“We really don’t try to target specific areas,” Loftus said.
And the comptroller’s spokesman, Michael Golden, backed up Loftus.
Golden said it is hard to extrapolate a pattern from two years’ worth of data. Even if more years were considered, a pattern would not likely emerge, he said.
“My guess is that it would shift all over the place because the compliance division of the comptroller’s office isn’t targeting a specific area,” Golden said. “Audits aren’t done based on geography.”
Some members of the Maryland Society of Accountants said they were not certain why Prince George’s claimed the most ZIP codes in the top 10 for assessments.
“I’m not sure why location should have anything to do with audits and additional income, but maybe there is a correlation,” said Marion Thompson, a certified public accountant in Gaithersburg.
She said the only audit she has handled where additional taxes were levied for underreported income was in Montgomery County, for 2000 and 2001.
And tax preparers in Prince George’s could not explain why county ZIP codes would have high tax assessments.
“We don’t see a higher incidence of audits or just a lot of audits,” said John Cotter, district manager for H&R Block in Prince George’s County. “If our clients were audited, we would help them with an audit and get their records together.”
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