The District of Columbia Office of Tax and Revenue (OTR) announced today that it has begun to mail Tax Year 2018 assessment notices to all real property owners in the District of Columbia. A total of 198,956 taxable and exempt real properties have been reassessed to reflect current market values as of January 1, 2017. Property owners receiving new assessment notices will not be taxed on the new assessed value until March 2018.

The District’s real estate market remains steady as the average increase in residential properties was 5.52 percent. The commercial market also shows value increases of 3.28 percent.

The 2018 real property assessment notice contains the proposed assessed value for a property as well as the estimated taxable assessment and important information related to property tax relief programs such as the homestead benefit and senior citizen tax relief. In addition, included on the notice is the assigned appraiser’s contact information for taxpayers who wish to discuss their assessment.

District property owners who believe their proposed 2018 assessment does not reflect the market value of their property are encouraged to file an appeal on or before April 3, 2017. The appeal process begins when a property owner submits a First Level Appeal Application to OTR. This year, property owners can appeal their assessment online by visiting otr.cfo.dc.gov under “Real Property.”

Taxpayers with questions should contact OTR’s Customer Service Administration at (202) 727-4TAX (4829).

Today, the Office of Tax and Revenue (OTR) revoked the sales and use tax certificate of urban eatery Fast Gourmet located at 1400 W Street, NW. Failure to pay an obligation amounting to more than $330,000 of sales tax collected from patrons and withholding tax collected from employees has cost Fast Gourmet ownership, DC Gourmet LLC, its ability to conduct lawful transactions in the District.

OTR made numerous attempts to collect the outstanding taxes from DC Gourmet LLC without success. After the owners breached multiple payment arrangements and failed to respond to consequent collection notices, OTR was forced to revoke their sales tax certificate.

This action is part of an ongoing investigation of businesses that are not remitting sales and/or withholding taxes collected. Additional enforcement measures such as liens, seizures, bank levies, and further tax certificate revocations will be taken against businesses that fail to comply with the tax laws of the District of Columbia.

OTR urges businesses that are not in compliance to immediately pay any liability due or to contact the Collection Division at (202) 724-5045 to arrange a payment plan.

With one week remaining, the Office of Tax and Revenue (OTR) reminds District property owners who believe their proposed 2018 assessments do not reflect market value that the deadline to file an appeal is Monday, April 3, 2017.

The appeal process allows property owners to dispute the real property assessment determined by OTR's Real Property Assessment Administration. Each property owner must begin at the first level of appeal before moving to the next level. Learn more about the process and find answers to commonly asked questions at otr.cfo.dc.gov/page/real-property-assessments-and-appeals-faqs.

This year, property owners can either appeal their assessment online at www.taxpayerservicecenter.com/Assessment_Appeal.jsp or download the form at otr.cfo.dc.gov/page/first-level-administrative-review-application and submit to the Office of Tax and Revenue:

Government of the District of Columbia
Real Property Tax Administration
Attn: Appeals Section
PO Box 71440
Washington, DC 20024
Fax: (202) 442-6796

For additional assistance, taxpayers are invited to call (202) 727-4TAX (4829) or visit OTR’s Customer Service Walk-in Center between the hours of 8:15 am and 5:30 pm, Monday through Friday.

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The Office of Tax and Revenue (OTR) announced today that it is offering individual and business taxpayers the ability to apply for a payment agreement online to pay off tax debt owed to the District. The Online Payment Agreement is an internet application available on OTR’s portal, MyTax.DC.gov.

“This new tool is part of OTR’s commitment to improve and expand taxpayer services by providing additional online taxpayer options,” said Keith Richardson, deputy chief financial officer for the Office of Tax and Revenue. “This new process allows taxpayers or their authorized tax representatives a simple and convenient way to establish payment agreements while eliminating the need for paper forms, calls, and personal interaction with the OTR.”

To be eligible for an online payment agreement, taxpayers must meet the following requirements:

• Pay the full amount of the tax liability within 24 months
• File all required tax returns not included in the payment agreement
• Have not cancelled previous payment agreements
• Does not have a business tax debt that exceeds $50,000

An online payment agreement allows taxpayers to pay any remaining balance due in monthly automatic ACH debit withdrawals from their checking or savings accounts. The OTR does not charge a fee for setting up the online agreement.

For additional information, please refer to the Payment Agreement User Guide/Tutorial, the Payment Agreement Frequently Asked Questions, or call OTR’s Collections Division at (202) 724-5045.

The District of Columbia Office of Tax and Revenue (OTR) announced today that it will hold its annual public Tax Sale beginning Monday, July 17, from 8:30 am until 12 noon and from 1 pm until 4 pm, or until all properties advertised are sold. The sale will be held at 1101 4th Street, SW, 2nd Floor, Room 250, Washington, DC 20024.

A list of more than 1200 properties by parcel, square, suffix, and lot number, with the name of the owner of record and the unpaid tax amount, is available on OTR’s website, as well as today’s Washington Informer, Washington Times and Current newspapers.

Public Seminars:

OTR will conduct four public seminars to explain the Tax Sale procedures to prospective bidders. The seminars will be conducted at 1101 4th Street, SW, 2nd Floor, Room W250, Washington, DC 20024, on the following dates:

• June 27: 9:30 am to 12 noon and 2 pm to 4:30 pm
• June 28: 9:30 am to 12 noon and 2 pm to 4:30 pm

To register for a seminar, please visit the Customer Service Administration’s Walk-In Center, located at 1101 4th Street, SW, 2nd Floor, Room W270, Washington, DC 20024.

Registration:

Registration for the Sale is mandatory and begins Monday, July 10, and continues until the final day of the sale. To register, prospective bidders must make a deposit of at least 20 percent of their total bids. A $200 Tax Sale fee will be added to each property at the time of the sale. Purchasers are also required to complete Form FR-500, Combined Business Tax Registration Application, prior to registering.

For more information on the Tax Sale process, call (202) 727-4TAX (4829) or visit OTR’s Customer Service Center at 1101 4th Street, SW, Room W270.

View the 2017 Tax Sale Listing.

The Office of Tax and Revenue (OTR) announces a new vendor for its prepaid debit card program. Beginning August 1, 2017, US Bank will replace CitiBank in the provision of cards for taxpayers who opt to receive their individual income tax refunds via prepaid Visa®. The ReliaCard® is a secure and convenient alternative to a paper check and can be selected by any taxpayer due a refund between the amounts of $2 and $4,000.

View more information.

In a continuing effort to ensure individuals and businesses comply with the District’s tax statutes, the Office of Tax and Revenue (OTR) has established a new fraud referral form, Tax Fraud Information Referral D-3949A, for taxpayers and practitioners to report tax related activities that they believe are in violation of DC tax laws.

The form can be used to report suspected illegal activity, such as:

• Failure to file tax returns
• Stolen refunds
• Failure to pay or correctly report taxes
• False Schedule H returns
• Claiming of false dependents
• Fraudulent DC employee withholding allowance certificate (Form D-4)
• Fraudulent employer withholding tax statement (Form W-2)
• Fraudulent returns and return preparation schemes
• Erroneous claims for real property and tax abatement programs
• Sale of Social Security numbers for dependents
• Tax evasion activity
• Unlicensed businesses
• Unrecorded payments to employees
• Unreported income
• Inappropriate actions by Office of Tax and Revenue employees

The OTR’s Criminal Investigation Division, who operates the Tax Fraud Hotline, will no longer accept alleged tax law violation referrals over the phone. Persons submitting reports can either provide their name or remain anonymous.

Click here to download a copy of form D-3949A

OTR Notice 2017-03: To Tobacco and Vapor Products Wholesalers Cigarette Tax Rate to Increase to $2.94 Effective October 1, 2017

The Office of Tax and Revenue (“OTR”) will follow certain federal tax filing deadlines that have been extended until January 31, 2018 for victims of Hurricanes Harvey or Irma who reside in presidential disaster areas.

View more information here.

Effective October 1, the following tax rate changes will apply as required by the Fiscal Year 2018 Budget Support Emergency Act of 2017:  

• Sales and Use Taxes:

Parking or storing vehicles: The rate for sales or charges for the service of parking or storing vehicles will remain at 18 percent and will not increase to 22 percent as stated in the Fiscal Year 2016 Budget Support Emergency Act of 2015.

• Hotel/Transient Accommodations:

The total rate of tax on gross receipts for the sale of or charges for any rooms, lodging or accommodations on or after October 1 will increase from 14.5 percent to 14.8 percent. The new rate of 14.8 percent applies to bookings made after October 1 that were not fully pre-paid for all room charges and applicable tax.   

Note: For bookings that were made and fully pre-paid before October 1, the 14.5 percent rate will still apply.

• Real Property Taxes:  

First-time Homebuyers: The recordation tax for qualifying first-time homebuyers purchasing homes for a price that does not exceed $625,000 is reduced from the general rate of 1.45 percent to .725 percent.

For additional information, visit www.taxpayerservicecenter.com or call OTR’s Customer Service Center at (202) 727-4TAX (4829).

Keith J. Richardson, deputy chief financial officer for the Office of Tax and Revenue (OTR), announced today that Eva Liggins has been named director of operations of the Office of Tax and Revenue. Liggins has been acting in this position since April. Prior to her reassignment, Liggins served as the director of the Customer Service Administration for six years.

Liggins has more than 30 years of customer service management experience in the private and public sectors. She was the director of 311 Dallas where she managed the 311 Call Center, Water Customer Service, Dispatch Operations and the Courts and Detention Services Call Center. She also served as chairwoman for the 311 Synergy Group, a national organization of 311 professionals.

Previous positions include serving as vice president for the Title Approval for the Chesapeake Appraisal & Settlement Services, Inc. in Columbia, Md, and Manager of the Administrative Services Center for PHH Vehicle Management Services.

Liggins holds a bachelor’s in psychology from Hampton University, Hampton, VA. She is also a graduate of the Executive Leadership Institute of the National Forum for Black Public Administrators. 

View the presentation.

The District of Columbia Office of Tax and Revenue (OTR) announced today that businesses can now file and pay their sales and use, specialized sales and street vendor/mobile food services taxes using the online portal, MyTax.DC.gov. Additionally, the portal must also be used by Qualified High Technology Companies requesting certification and for Special Event Promoters registration. This new filing option is a result of the successful implementation of the third phase of OTR’s changeover to a new integrated tax system.  

“The changeover to the Modernized Integrated Tax System (MITS) is an investment the District has made to improve services for all taxpayers,” said Keith J. Richardson, deputy chief financial officer for the Office of Tax and Revenue. “This multi-phase project enhances OTR’s efforts to increase transparency, reduce processing time, improve notices of account, and enhance fraud detection measures.”
 
Over the last two years, income, withholding, corporate and unincorporated franchise taxes were implemented into the new system. Taxpayers can now complete many of the services that previously required travel to the OTR by using MyTax.DC.gov.  Taxpayers can file these taxes online, request refunds, set up standard payment plans, if delinquent, file required documentation electronically, and review information they have filed.  

Over the next year, other taxes such as motor fuel, ballpark fees and other miscellaneous fees will be converted to the new system.  

For additional information, visit MyTax.DC.gov, email OTR’s e-Services Unit at E-Services.otr@dc.gov or call (202) 759-1946.

(WASHINGTON, DC) – Today, Mayor Muriel Bowser and Congresswoman Eleanor Holmes Norton (D-DC) hosted Alexandria Mayor Allison Silberberg and representatives from the U.S. Conference of Mayors, National League of Cities, National Association of Counties, the African American Mayors Association, and Americans Against Double Taxation at a press conference to discuss concerns around the current federal tax reform bills.

“Tax reform should provide relief for the middle class, not further burden hard-working Americans by eliminating the policies and resources that have been put in place to support them,” said Mayor Muriel Bowser. “Today, we call on Congress to preserve critical sources of financing that allow cities like Washington, DC to build affordable housing for families and veterans, invest in safe and reliable infrastructure upgrades, and support educational opportunities for residents of every age.”

Together, the leaders called on Congress to preserve the State and Local Tax Exemption (SALT) deductions, Private Activity Bonds (PABs), and critical tax credits such as the New Markets Tax Credit – a tax credit that increases the flow of capital to businesses and low-income communities by providing a modest tax incentive to private investors. The current House tax reform bill, H.R.1, would eliminate PABs and New Markets Tax Credits. These tools support public-private partnerships in cities like Washington, DC by providing low-cost, tax-exempt financing to the private sector for many important programs and projects, including:

• charter schools, such as the Thurgood Marshall Academy Public Charter School;
• nonprofits, including the new Bread for the City headquarters;
• affordable housing projects;
• universities, including Georgetown University;
• hospitals;
• Canal Parks at the Yards; and
• the Far Southeast Family Strengthening Collaborative.

In Washington, DC, the elimination of PABs would particularly devastate affordable housing opportunities, including the production of affordable housing for veterans and families. Since Fiscal Year 2010, PABs have funded more than 9,000 affordable housing units in the District and leveraged an additional $650 million in private equity. In total, PABs and the companion four percent Low-Income Housing Tax Credit have helped deliver more than $2.5 billion in total development.

The elimination of PABs would also make it impossible for the District to continue programs such as the Industrial Revenue Bond (IRB) program. The IRB program provides access to tax-exempt financing to help businesses and non-profit organizations renovate and build new construction, make tenant improvements, and purchase capital by securing interest rates up to four percent lower than a traditional commercial loan. More than $9.5 billion has been issued through Washington, DC’s IRB program since 1994, and participants have included: Capitol Hill Day School, Georgetown University, the Spy Museum, and Gallaudet University.

In the coming weeks, Mayor Bowser will continue to advocate against the elimination of SALT and PABs.

Contact: Natalie Wilson (202) 442-8072

Today, the District of Columbia Office of Tax and Revenue (OTR) revoked the sales and use tax certificates of three Five Guys restaurants. The owners failed to pay the District $530,939 in sales taxes collected from its patrons.

Revocation of the sales tax certificates prohibits the following restaurants from making retail sales - selling of food and beverages:

• 1400 I Street, NW
• 1300 2nd Street, NE
• 470 L’Enfant Plaza East, SW

OTR made numerous attempts to collect the outstanding taxes from the establishments without success. When the owners failed to respond to multiple collection notices, OTR was forced to revoke their sales tax certificates.

This action is part of an ongoing investigation of businesses that are not remitting sales taxes collected. Additional collection actions, such as seizures, bank levies and additional sales tax certificate revocations are planned for businesses that are not in tax compliance.

OTR encourages businesses that are not in compliance to file missing returns immediately, pay any liability due or arrange a payment plan. This can be done at OTR’s tax portal, MyTax.DC.gov.

The new Federal tax law limits the amount of state and local income and real property taxes that individuals may deduct from their Federal income tax, beginning in calendar year 2018.  

Under the new law, the amount that may be deducted is limited to $10,000 of the combined local income and real property taxes.This applies ONLY to taxpayers who itemize their income tax filings.

District property owners may pay their 2018 real property taxes in 2017 to get the full benefit of that deduction in 2017.These payments MUST be received and recorded in calendar year 2017.The payments made will be credited to the calendar year 2018 real property tax obligation. 

About 40 percent of District taxpayers itemize their income tax filings.Taxpayers who do not itemize will not receive a tax benefit by paying early.

The Property Tax payment can be made two ways:

• The District of Columbia Office of Tax and Revenue’s (OTR) website www.taxpayerservicecenter.com provides the opportunity to pay by electronic check (e-check). Click on “Prepay your 2018 Real Property Tax Here” to get to the correct form. The payment MUST be made before midnight December 31, 2017. The information required to make the payment is the property address (or lot and square numbers), your bank routing number and bank account number.
   
• Wells Fargo will accept payment by check or credit card at any DISTRICT branch office. Payment MUST be received by close of business on Saturday, December 30. You MUST bring a 2017 real property tax bill to the bank so that they can process the payment. Some Wells Fargo branches are not open on Saturdays.

Do not mail payments as they may not be recorded in 2017.

Late on December 27, 2017, the IRS issued a news release in the form of an IRS Advisory, “Prepaid Property Taxes May be Deductible in 2017 If Assessed and Paid in 2017.”  In short, the IRS Advisory states, “State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

For the District of Columbia, real property taxes for Fiscal Year 2018 (October 1, 2017 through September 30, 2018) are assessed, by law, as part of the approved budget approval process for the new fiscal year which begins October 1. At that time, the tax rate is set and the liability is established for all properties for the fiscal year. Taxpayers also received Notice of Proposed Assessments for Fiscal Year 2018 as of March 1, 2017. Taxpayers must make payments on or before March 31, 2018 and on or before September 15, 2018. The billings for the first half of the fiscal year will be sent no later than February 28, 2018 and for the second half of the fiscal year on or before August 15, 2018. The attached IRS Advisory provides two examples for when a taxpayer can and cannot deduct prepayment of these taxes in 2017. Based on a legal review by the Office of Tax and Revenue, the District falls under Example 1 which indicates taxpayers prepaying their 2018 tax bills in 2017 can deduct the tax payments on their 2017 tax return. Pursuant to the IRS Advisory, since the District both assessed properties and set real property tax liabilities in 2017, there is a basis, if a taxpayer chooses to prepay real property taxes by December 31, 2017, for the taxpayer to claim a deduction on his or her 2017 return.

The Office of Tax and Revenue continues to recommend that taxpayers consult with their own tax advisors before making any prepayments. They may also need to coordinate payments with their mortgage company.

How to PrePay Real Property Taxes

If a taxpayer chooses to prepay property taxes given their federal tax situation, they may choose to base their property tax prepayment on the amount paid in the previous half-year. The prepayment can be for the entire fiscal year (October 1, 2017-September 30, 2018).  Once the prepayment for 2018 is made in 2017, adjustments based on the corrected amount will be included in subsequent billings. These adjustments may be due to factors such as the homestead deduction, senior deduction, or other changes that impact billings.

Taxpayers can prepay online by going to the OTR website at www.taxpayerservicecenter.com and clicking on the prepay 2018 tax banner. They can then put in their property information and, after it is selected, click the “Pay Here” button at the bottom of the page and then pay by e-check. They will need their checking or savings account number and routing number. This option is available until midnight on December 31.  

The other option is to go to any District Wells Fargo branch where they can pay via check or credit card. They will need to bring their latest property tax bill so their account is credited appropriately. This option is available until close of business for the particular branch on Saturday, Dec 30.

The Office of Tax and Revenue (OTR) announced that it is following the lead of the Internal Revenue Service (IRS) and opening the District of Columbia’s tax season on Monday, January 29. OTR provides the following tips to help residents prepare for the filing season.

Gather all Paperwork    
OTR urges taxpayers to gather all of their forms and documents needed before preparing their tax returns when the filing season officially opens.

File Electronically (e-File)
More than 400,000 individual income tax returns are processed and received by OTR each year. OTR urges taxpayers and preparers to file their tax returns electronically as it is faster, helps to minimize errors, and provides an electronic filing acknowledgement.

OTR offers two electronic filing methods:

• Free File: A service that allows taxpayers to choose from a number of free tax prep software options
• Fillable Form: An online version of the D-40/D-40EZ form and schedules that allows taxpayers to fill in their tax information, e-sign, and e-file their return

Tax Preparers/VITA Sites
Taxpayers should start thinking about who will prepare their tax returns for the upcoming filing season. As a reminder, once a tax return is signed by the taxpayer, he or she is legally responsible for the accuracy of all the information on the return. OTR urges taxpayers to check that all information is accurate before signing tax returns. The IRS offers tips to help taxpayers choose tax preparers wisely.

For residents who may qualify, the Volunteer Income Tax Assistance (VITA) program offers free tax help for taxpayers who earned less than $54,000, persons with disabilities, and limited English speaking taxpayers. VITA sites are typically located at community centers, libraries, and schools. The IRS provides a VITA locator tool on their website or taxpayers can call 800-906-9887 to locate the nearest VITA site.

MyTax.DC.gov
To help facilitate the processing of a return once it is submitted, taxpayers can check the status of a refund, provide substantiating documentation, or communicate with customer service by visiting the District’s new online tax portal, MyTax.DC.gov.

Contact OTR
Assistance is available from 8:15 am to 5:30 pm, Monday through Friday.

• Walk-In Center: 1101 4th Street, SW, Suite W270
• Telephone Center: (202) 727-4TAX (4829)
• Email: Taxhelp@dc.gov

The Office of Tax and Revenue (OTR) reminds taxpayers and tax professionals that a number of changes will take effect for the 2018 tax filing season.

Following are highlights of several of the changes:

Individual Income tax filing deadline: The deadline to file individual income tax returns is Tuesday, April 17, 2018. April 15 falls on a Sunday and OTR will be closed on Monday, April 16 in observance of Emancipation Day.

Standard Deduction Increased: The standard deduction has increased for tax year 2017 as follows:

• From $5,200 to $5,650 for single filers,
• From $6,500 to $7,800 for head of household filers, and
• From $8,350 to $10,275 for married filers.

Schedule H: The Homeowner and Renter Property Tax Credit amounts for tax year 2017 are:

• Property tax credit increases from $1,000 to $1,025
• Schedule H federal AGI eligibility threshold for under age 70 increases from $50,000 to $50,500
• Schedule H federal AGI eligibility threshold for age 70 and older increases from $60,000 to $61,900

DC Earned Income Tax Credit (EITC) for Childless Workers: The formula for determining the DC EITC for childless workers has changed. A DC EITC Worksheet for Filers Without A Qualifying Child is included in the Individual Income Tax Forms and Instructions Booklet.

Pre-Acquisition Disclosures: The Consumer Financial Protection Board (CFPB) has published its final Prepaid Account Rule, creating detailed consumer protections for prepaid accounts. For tax year 2017, if taxpayers elect to receive a refund using the U.S. Bank ReliaCard™ or use a pre-paid card to make payments, they are required to review and acknowledge the Pre-Acquisition Disclosures (Short and Long Forms) prior to selecting the ReliaCard option as method for receiving a refund or using a pre-paid card when making a payment.

New Prepaid Debit Card: US Bank ReliaCard™ is a prepaid debit card issued by the US Bank. This replaces the DC Tax Refund Visa® Prepaid Card.

Food Commodity Donations Tax Credit Limitation: The non-refundable tax credit for farm to food donations was repealed effective April 7, 2017. Taxpayers (individuals and businesses) may only claim this credit for donations made between January 1, 2017 and April 7, 2017.

Franchise Tax Rate: The tax rate for unincorporated and incorporated businesses for tax year 2017 is 9.0 percent.

New Business Registration Policy: OTR will no longer automatically register businesses for Corporate or Unincorporated Franchise Tax from the D-20 or D-30 tax returns. All new entities starting business operations or promoting/vending at special events in DC MUST register at MyTax.DC.gov using the new business registration process by completing the FR-500 for business income (Corporate or Unincorporated Franchise, Sales and Use, Withholding Wage, Withholding Non-Wage), or FR-500B for Special Event Promoters and/or Vendors. The FR-500 requires all entities to provide information for responsible officers, including social security numbers (SSN’s), and will not be processed without this information.

Tax Fraud Protection: OTR’s enhanced security measures to safeguard tax dollars and combat identify theft/tax refund fraud may result in longer processing times for some tax returns and associated refunds. The processing window for selected tax returns could be up to 25 days.

As previously announced, OTR will open the District of Columbia’s 2018 tax filing season on Monday, January 29. Stay tuned for more details and information as it pertains to the tax filing season.

The presentation focuses on the following changes that may significantly impact District revenues and/or District taxpayers:

• Federal Tax Rates
• Standard Deduction
• Personal Exemption
• Child Tax Credit
• State and Local Tax (SALT) Deduction
• Estate Tax Exclusion
• 20% Qualified Business Income Deduction
• Immediate Expensing/Interest Deduction Limitation for Businesses