This year, even folks on top of their tax deadlines came out on the wrong end of the Office of Tax and Revenue’s fining machine.
Over the course of two years, the OTR changed the filing date for small business tax returns not once but twice—first extending the deadline to January 2012, then dialing it back to October 2011. Those taxpayers who didn’t get the memo the second time were assessed fines—plus interest—for unwittingly filing their tax returns late.
In December 2010, the OTR sent out a letter to small business owners, explaining that instead of filing their sales tax returns on a monthly basis, they should just file one for the entire year, due on Jan. 20, 2012.
Darrell Clark, who files an FR-800 for sales tax from a book he contributed to, received one of these letters. “I would like to think I’m a reasonably prompt person,” he says.
But when he filed his taxes in Jan. 2012, he was assessed almost an 18 percent late penalty.
Turns out, in the meantime, the OTR had tied the filing date to the fiscal year calendar. According to OTR spokesperson Natalie Wilson, their reason was “that’s when the [D.C.] Council makes its changes to the tax forms.”
She also says the OTR mailed letters notifying taxpayers of the change, but it looks like some got lost in the mail. “We have received some calls, but it has not been a large volume.”
Despite the OTR’s communication lapse when it came to changing the filing date, Clark says notice of the fine came quickly. “They were pretty efficient at finding me,” he says. “Three weeks later I got a notice in the mail of the penalty.”
When Clark called the OTR back in January, a customer service representative confirmed that his situation was not necessarily unique—they’d gotten quite a few calls from people who didn’t know the deadline had changed.
After being bounced around through the OTR’s customer service office, Clark says he gave up and paid the fine anyway. “It’s sort of that combination of arrogance and ignorance,” he says. “We’re too stupid to notify you that we changed the law, but we’re still going to charge you for breaking the law.”
Wilson says the OTR intends to refund any fees, plus interest, assessed to those who weren’t aware that the filing date had been changed. She asks that they call the OTR’s customer service hotline at (202) 727-4TAX (4829).