‘AN ADVOCATE FOR THE PEO PLE’ New Maryland Comptroller Brooke Lierman seeks a partnership with CPAs and a government that works for all taxpayers and businesses

BY BILL SHERIDAN, CAE

It’s a year of legislative change in Annapolis, and nowhere is that more obvious than in Maryland’s Comptroller’s Office.

After four terms as the state’s top accountant, Peter Franchot has vacated the office he held since 2006. Franchot chose not to seek a fifth term and instead joined a crowded Democratic field in the 2022 race for governor. He finished third in the Democratic primary.

Franchot’s departure brings a 36-year public service career to an end; he served Montgomery County in Maryland’s House of Delegates from 1986 to 2006.

It also opens the door for Maryland’s first new comptroller in nearly a generation, and a history-making one at that.

Brooke Lierman, a Democratic state delegate representing Baltimore City, defeated Harford County Executive Barry Glassman in November to become the first woman to be elected Maryland’s comptroller.

Lierman has said her role is “about partnership, not partisanship,” and she has already demonstrated that belief with Maryland’s CPAs. In 2022, she sponsored a House bill that called for the establishment of a Legal Division in the Office of the Comptroller and the creation of a private letter ruling process.

Private letter rulings, or PLRs, allow taxpayers to get binding answers from the Comptroller’s Office to their tax questions. In turn, the taxpayers can then pay the right amount of tax at the right time, rather than years later after an audit or litigation. Several dozen other state departments of revenue have a similar process in place, and MACPA legislative volunteers have advocated for a private letter ruling process for some time. By establishing a Legal Division in the Office of the Comptroller and creating the PLR process, Maryland has taken a strong step in the fair and transparent administration of state tax laws.

Lierman said the PLR process is “essential both as a service to taxpayers and as a compliance tool,” and her support was key to passing a piece of legislation that Maryland’s CPAs have sought for years. MACPA members — and undoubtedly Lierman herself — will be counting on that level of cooperation and collaboration repeating itself throughout her term.

Lierman sat down recently for an interview with Statement Editor Bill Sheridan to discuss the opportunities that lie ahead for her office, the relationship between the Comptroller’s Office and the state’s CPAs, and the future of revenue administration in Maryland – and how CPAs fit into that vision.

Q&A

Here’s what she had to say.

Comptroller Lierman, thank you so much for joining me. How has the transition been progressing?

It has been a whirlwind. We hit the ground running after election day. We have named the leadership team, and we are working to prepare for meetings to go over the many aspects of the Comptroller’s Office, which is a vast office and tackles so many different areas of our state financial systems. So I’m really excited. There’s a lot to do.

Why this role for you? What was it about the Comptroller’s Office that drew you in?

From my time in the General Assembly serving on the Appropriations Committee and as co-chair of the Oversight Committee on Pensions, I came to know, understand and appreciate just how uniquely situated the Maryland Comptroller’s office is to make a difference on economic matters — to build financially resilient communities, to make Maryland a great place to do business, and to make government work better for people.

Most people, when they interact with the government, often it is through the Comptroller’s Office. I want to make it work well for people because that, in turn, can help them succeed and to become more financially resilient. I’m so excited about the fact that the Comptroller’s Office touches such a huge percentage of Marylanders and Maryland businesses. I want to be there as an advocate for the people, and I think this is the place to do it.

What have you seen in the Comptroller’s Office that’s (a) working well, and (b) might need some improving?

I think our people are our strength. We have incredibly dedicated staff who

CONTINUED FROM PAGE 5 are mission-driven, who are focused on making sure that we can get the job done for Marylanders, that we can collect revenue but also work with families and businesses and taxpayers to ensure that things are going well for them and that the process is smooth. a result of legislation that I brought and helped pass last year. This is something that nearly every other state offers, and it’s an incredibly important service to let people know how our tax laws affect them and how their situation applies to our tax laws. I’m really excited to get that up and

I’m glad you mentioned the Legal Division. That’s something that the MACPA and CPAs in general have been eager to see for a while now. What kind of changes can we expect to see not only for taxpayers but tax professionals as a result of the Legal Division taking form?

One of the things that’s obvious to almost everybody is how outdated our technology is. That results in so much more work for customers, constituents, for Marylanders and Maryland businesses, but it also creates so much more work for the people in the Comptroller’s Office in terms of updating forms and answering phone calls. We don’t have a clear, modern IT system set up for people to use, and that creates more work for everybody. I’ve started learning about the work that we’re doing to create and implement a new IT system for revenue administration, but we have a ways to go. It’s a slow and painstaking process to get it done, but people are working diligently on it.

I’ve loved meeting our people. I’m meeting more people every day to hear about what they think we need to make sure that we can fulfill the mission of the Comptroller’s Office.

What future opportunities do you see — things you’d like to implement or new ideas?

One of the things I’m excited about is the fact that we are creating an Office of Legal Division in the Comptroller’s Office and will finally be able to do private letter rulings in the state of Maryland — running and make sure it’s staffed properly so we can do that important work.

I’m also really excited about rethinking the Comptroller’s website to make it more user friendly — to make sure that Maryland taxpayers and business owners can go to the Comptroller’s website and get everything they need.

We’re also thinking through a lot of other ideas as well. The Board of Public Works has been thinking about sustainable investing and making sure that we’re meeting our goals on the pension side. It comes down to making sure we’re fulfilling our duty to think long term for our pensioners and taking climate risk into account to ensure that we have responsible investing by our state retirement and pension board. And there are many other things. I’m excited to work to beef up the Ombudsman’s Office and have Taxpayer Services advocate like the IRS and many other states have.

There are a lot of possibilities, but we have to start where we are. We have a great team and we will continue building that team so we can do a lot of this work for Marylanders.

My hope is that once it’s up and running and fully staffed, it’ll be a partnership. You will have a partner in the Comptroller’s Office who can work with the MACPA and tax attorneys to solve some of the ongoing questions that exist so that your clients can know what they owe and pay what they owe. We’d really like to work with Maryland’s CPAs to help solve recurring questions that come up over and over again. We need definite answers to those questions so we don’t have to keep asking over and over, and researching over and over. We’d like to understand what those questions are so we can get them answered quickly, publish those opinions, and have them located in a place where people who need them have access to them.

It’s going to be hugely important that we partner with the MACPA and our tax attorneys through the Office of Legal Division, and that we’re staffing it with people who are excited to be partners and to work with you on that work. We are mission driven, and making sure we’re sharing that mission and working together is important to the success of the agency — and to MACPA’s success as well.

You’re part of a completely overhauled board of Public Works. Maryland’s highest administrative body, made up of the governor, the treasurer, and the comptroller, and you’re all fairly new to your jobs now. What’s that dynamic like? What’s it like to be coming into a situation like that?

It’s really exciting. I’m excited to serve with Treasurer (Dereck) Davis, who I served with in the General Assembly. And I’m thrilled to be sitting next to Gov. (Wes) Moore. We are all excited to work together, and I think we all understand just how important the Board of Public Works is not just to the future infrastructure of the state, but to Maryland’s future economy. The Board of Public Works is not just about laying pavement. It’s about building communities and community wealth and a more financially resilient economy in Maryland.

I’m excited to work with my BPW colleagues to make sure we are examining those contracts, that they fulfill those missions, and that we’re working with our contractors going forward to make sure there’s accountability and transparency so we know that our money is being spent in a way that’s building a stronger economy, building buildings and laying broadband, and working in our wetlands. There’s so much that we can do from the Board of Public Works. I’m really excited about it.

With that vision in mind, what’s your philosophy on evaluating spending decisions at that level? What kind of criteria do you apply as you’re considering where the money goes?

That’s a great question. I actually practice procurement law and I have represented small businesses across the country in both federal and state procurement matters. Often what happens is that rather than securing the best value for our tax sellers, people go for the lowest cost. Almost inevitably, when you buy the lowest cost, they put change order after change order after change order in — so it ends up not being the lowest cost at the end, and you’re not getting the value you want. What we should be looking for is best value. Are we creating jobs in Maryland? Are we creating wealth in Maryland? Are we working and meeting our goals? Is this a contract for a new public building that’s going to be located in a floodplain? Let’s think through how we’re spending our dollars and where those dollars are going so we don’t have to retrofit everything in 10 years.

It’s about thinking through some of those basic questions and making sure that rubric and framework is applied to the contracts that come to the Board of Public Works. It’s my goal that every agency and group that comes to the Board of Public Works gets that and are fully implementing that.

It doesn’t always work like that, unfortunately, so we are going to need to work upstream to make sure the agencies understand that this is the mission. We’re going to have to identify the barriers to implementing that vision. Are they statutory? Are they regulatory? Or is this just a bad tradition that we need to let go? We need to have people in the Comptroller’s Office and on the Board of Public Works who can work to help pinpoint some of those challenges and barriers.

What’s the ideal relationship between the Comptroller’s Office and the state’s CPAs? What kind of help do you need from our profession?

There has to be a partnership. There has to be an open door so we can talk with the MACPA, its members, and tax attorneys about the challenges their clients are seeing and the challenges they’re seeing in the Comptroller’s Office. Likewise, the comptroller has to be open with MACPA members, accountants, and tax attorneys about some of the limitations we have right now because of our outdated technology. And we might have to brainstorm and come up with workarounds until we fully implement Compass (the Comptroller’s Office’s new tax processing system), making sure we’re keeping the CPAs and tax attorneys up to date on how things are going.

I think it’s about having a give-and-take and talking openly and being trusted partners about how we can make sure Marylanders are able to pay their taxes in the correct amount and on time, and that they’re able to get their refunds timely. Also, it will always be the job of the comptroller to go after fraudulent behavior. If you hire an accountant or a tax attorney, I think that indicates you’re trying to do the right thing, generally, and pay the proper amount. But there will always be a group of companies and people out there who are looking for ways to not pay what they owe. It’s essential that the comptroller has a strong fraud detection unit, and we do. There’s always more to do, though, in terms of modernizing and thinking through what new technology exists to help find some of the unpaid taxes.We saw a great amount of fraud throughout the pandemic — not necessarily tax fraud, but other kinds of fraud. So there’s a lot of work to do, and I hope that as they see some of that type of behavior, CPAs and tax attorneys will bring it to the attention of the Comptroller’s Office. Certainly, the Comptroller’s Office needs to say to tax attorneys and CPAs, “Heads up: We are starting to see this type of fraudulent behavior. Please keep your eyes out for it.” That’s what a partnership looks like, and having those kinds of regular and ongoing conversations is important.

What does the future of this office look like to you? Where would you like to take it going forward?

If we’re focusing on revenue administration and taxes and authority, I want Maryland to be at the top of the country. I want people to get their refunds quickly, but more importantly, I want people to be

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CONTINUED FROM PAGE 7 able to pay their taxes in a quick, easy, and efficient way and claim all the tax credits they’re entitled to and know about them. Too many people don’t know that they should be claiming the Earned Income Tax Credit, for example. We just passed a senior tax credit last year in the General Assembly, and many seniors are not going to know about that credit, or how to claim it. I want Maryland to be the place where people get their tax credits, they know about them, it’s easy to pay your taxes, and you get great customer service when you have questions.

I want it to be easy to start a small business in Maryland, and for the tax infrastructure in Maryland to be easy for taxpayers and businesses to deal with. I want Maryland government to work the best it possibly can for all taxpayers and small businesses

— for businesses and families and nonprofits alike. Nothing’s ever going to be perfect, in business or in government. But when there are challenges, I want people to think, “When I call the Comptroller’s Office, they’re able to help me. They can pinpoint my problems, and they can help close loopholes and get things done for people.” That’s my goal for our revenue administration activities and for all of the work we’re doing around taxes.

I’m so excited to work with people around the state. I loved running (our campaign) statewide. I love talking with people about what the Comptroller’s Office does, empowering them with information and hearing from them about what works, what doesn’t, their ideas for how the comptroller can help.

And I’m excited to keep doing that work. It’s just so important for our comptroller — and for all of our public officials — to make themselves available to the public, so people understand what these government roles are and how they can work in their communities. I’m excited to keep doing that while also working to make sure that we are thinking through how we can modernize the structure of the Comptroller’s Office so it’s best serving the people of Maryland.

Bill

Sheridan, CAE, is editor of The Statement and chief communications officer for the MACPA.