Caroline D. Ciraolo was quoted in a recent Tax Notes article entitled “Maryland Tax Court Won’t Issue Opinion on Foreign Earned Income Matter,” published on October 22, 2021. The article addresses the refusal of the Maryland Tax Court to issue a decision on the merits regarding Maryland taxpayers’ right to claim the foreign earned income exclusion under IRC 911 in calculating Maryland taxable income, and the Comptroller of Maryland’s refusal to issue clear guidance after first challenging and then conceding Petitioners’ claim for refund based on the exclusion. Ms. Ciraolo, who represents the taxpayers in the case, told Tax Notes that an appeal of the court’s decision is planned.
The article notes:
Caroline D. Ciraolo of Kostelanetz & Fink LLP, who represented the taxpayers, told Tax Notes in an October 20 email that “the Comptroller denied the taxpayers’ timely claims for refund based on the foreign earned income exclusion (FEIE) and then mounted a substantial challenge to the refunds in the Maryland Tax Court.” She said that “the Comptroller unilaterally opted to refund the overpayments in full, with interest, which Maryland only agrees to do if the overpayment is a result of an error or mistake attributable to the State,” citing Maryland Income Tax Administrative Release No. 14.
“In light of the Court’s decision, and the continued lack of administrative guidance from the comptroller despite requests from Maryland practitioners, Maryland taxpayers are left wondering if the comptroller will continue to force them to litigate to protect their right to the FEIE,” Ciraolo said. “We disagree with the decision of the Maryland Tax Court and, without the requested, clear administrative guidance from the comptroller confirming Maryland taxpayers’ right to claim the FEIE, we welcome the opportunity to appeal to bring attention to this important issue.”
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