Hogan signs bill to beef up comptroller's income tax enforcement powers

Senate President Thomas V. "Mike Miller, Governor Larry Hogan, and House Speaker Michael E. Busch, sign bills related to the environment at the Annapolis City Dock before returning to the State House to sign more bills. (Amy Davis, Baltimore Sun video)

The state Office of the Comptroller will have more power to crack down on identity thieves and fraudulent tax preparers under legislation signed by Gov. Larry Hogan Thursday.

The Taxpayer Protection Act, the No. 1 priority this year of Comptroller Peter Franchot amid a rise in tax fraud, passed in the final hours of this year's General Assembly session a year after similar legislation failed.


Franchot described the measure as a "game-changer."

"It's the missing piece of the puzzle for my agency," he said. "This is a very important enhancement of our duty to protect Maryland taxpayers from financial criminals."


The measure was one of more than 200 that Hogan signed in two separate ceremonies — one at the the Annapolis City Dock and the other at the State House.

The Republican governor used the waterfront signing to highlight more than a dozen environmental bills, including three of his own initiatives passed during the legislative session that ended last month.

Not on the signing list for Hogan and the Democratic leaders of the General Assembly — Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch — was a closely watched bill requiring many employers to allow their workers to earn paid sick leave.

Hogan, who opposed the Democrat-backed measure and advanced an alternative that the legislature ignored, has until late May to decide whether to sign, veto or let the legislation become law without his signature. It passed both houses of the Assembly by veto-proof margins.


Franchot, a Democrat, said Hogan helped get the tax enforcement bill passed when he made it part of his legislative agenda this year.

"I think that's the difference perhaps from a year ago," he said.

Similar legislation was passed by both the Senate and the House of Delegates during the 2016 session but failed on the final day after the two versions could not be reconciled. It almost suffered the same fate this year but won final passage with hours to spare.

Franchot said the law gives his agency's investigators the same police power to enforce income tax fraud cases that they now have in cases involving tobacco and motor fuel. Previously, the comptroller had to call on the attorney general's office to take legal action against income tax cheats or unscrupulous tax preparers.

The comptroller said the new power to seek arrest and search warrants would not be used against individual taxpayers who fudge their returns. Instead, it will be aimed at preparers of fraudulent tax forms and individuals who file multiple returns under other people's names to collect their refunds.

Franchot said such fraud has become an epidemic in recent years. He said his agency has blocked $174 million in suspicious returns over the past decade but has been unable to bring the kinds of cases that would deter fraudulent filers.

The measure allows his office to seek injunctions in court against tax preparers who file fraudulent returns in bulk.

"This is our opportunity to prepare some cases against the people sitting in a hotel and sending dozens of fraudulent tax returns electronically to our office," Franchot said.

Topping the list of environmental bills Hogan signed was legislation broadening and extending an existing state program giving tax credits to buyers of qualified electric cars and to businesses that install charging stations. The measure expands the program to $3 million in credits per year, up from $600,000, while decreasing the benefit per tax filer. It doubles the rebates for charging stations.

John Bozzella, president of the trade association Global Automakers, praised the legislation.

"These types of state consumer electric programs are proven tools to help build consumer demand for green cars," he said in a statement.

Hogan, Miller and Busch marked the bill's signing by craming into an electric vehicle, a bright blue compact Hyundai Ioniq, for the ride from the State House to City Dock.

Hogan also signed a stripped-down version of a bill that would have jump-started a water pollution credits trading program. After running into resistance, the administration agreed to pare it back to a four-year program that would spend up to $10 million on pollution reduction projects.

Nevertheless, state Environment Secretary Ben Grumbles called the measure "a great example of bipartisan collaboration that accelerates environmental progress."

"Forming broader partnerships for cleaner water and a healthier Chesapeake Bay will help us get the biggest cleanup bang for the buck," he said.

Also signed was a bill establishing a Maryland Energy Innovation Institute on the campus of the University of Maryland, College Park. The legislation requires a $1.5 million annual appropriation to fund the institute's activities and related programs.

The governor also approved several environment-related bills authored by legislators.

A measure sponsored by Del. Dana Stein, a Baltimore County Democrat, directs the state Department of Agriculture to help farmers with research, education, technical assistance, and — if money is available — funds to improve soil health on Maryland farms.

Proponents said healthy soil captures carbon and reduces greenhouses gas emissions while producing crops with greater yields and more drought resistance.

The legislation, which passed unanimously in the Senate and overwhelmingly in the House, had the support of both climate change activists and the Maryland Farm Bureau.

After the dockside ceremony, two cannon shots rang out from the Pride of Baltimore II, which served as the photo backdrop.

But by then amity, bipartisanship and eco-consciousness had met their limits. Hogan, Miller and Busch rode back in separate SUVs.


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