Because of a mistake made by a title company, two forms were submitted in 2015 on behalf of Montana state Auditor Matt Rosendale calling Rosendale a resident of Maryland when he was actually a resident of Montana.
In 2015, Rosendale and his wife, Jean, sold a roughly 25-acre property in Maryland for $750,000. When the deed was recorded, it included two forms — the property was sold in two pieces — signed by Rosendale and later filled in by the title company to indicate Rosendale was a resident of the state of Maryland, according Rosendale's accountant and a letter from the title company.
Below the box ultimately checked, the form says that under penalty of perjury, the signer has examined the declaration made on the form and to the best of their knowledge it is true.
The form was signed by Rosendale, who was a real estate developer in Maryland before moving to Montana in 2002, as part of a packet of forms sent by a title company, Rosendale’s accountant Thomas McCarthy said Wednesday.
Rosendale signed his name on a line flagged with a sticky note by the title company as part of a large packet of documents to sign, McCarthy said.
Rosendale did not make any other marks on the form except his signature, McCarthy said. The title company later wrongly checked the box saying Rosendale was entitled to an exemption to the withholding of Maryland income taxes on sales or transfers of property by nonresidents because he was a Maryland resident, McCarthy said.
The title company, The Atlantic Title Group, provided the Rosendales a letter Monday that was shared with Lee Newspapers saying the error was their fault because they mistakenly sent Rosendale the wrong form and the Rosendales did not check any boxes relating to residency. The letter acknowledges the Rosendales were residents of Montana at the time of the sale.
"It appears that you were mistakenly sent the incorrect Certificate of Exemption from Withholding and during our processing, the Maryland resident exemption was incorrectly attributed to your Certificate without your knowledge,” the letter reads.
The incorrect form was submitted with the deed, but the title company did not recommend submitting the correct withholding form to “correct the minor error.”
Maryland has state tax withholding laws for nonresidents who sell property in the state, but it offers six exemptions.
The title company mistakenly sent the Rosendales the incorrect certificate for withholding that is meant for those who meet some statutory residency requirements.
McCarthy said Wednesday the Rosendales were still eligible for a full withholding exemption because they sold the property at a loss, which is another one of the six exemptions.
Rosendale’s federal taxes for 2015, which were reviewed in part by Lee Newspapers, show that he sold the property at a $57,444 loss. It was purchased in 1996.
McCarthy said Wednesday he prepared a nonresident Maryland income tax form for the Rosendales in 2015 to properly document the sale. A copy of the form was supplied to Lee Newspapers. McCarthy also said the Rosendales have filed income taxes as Montana residents every year since 2003, and filed for a partial year in 2002 when the family moved to Glendive.
“This is a paperwork error by the title company,'' said Rosendale's communications director, Shane Scanlon. "They admit the sent the wrong form and that Matt and Jean were not the ones who improperly checked the residence box.”
Montana residency has become an issue in the four-way GOP primary for the U.S. Senate nomination.
Rosendale moved from Maryland to Montana about 15 years ago and Democrats have pushed to label him "Maryland Matt.'' Fellow GOP candidate Troy Downing, a Big Sky businessman, came to Montana from California more recently and faces charges that he illegally bought Montana resident hunting-and-fishing licenses when he was a non-resident — charges he disputes. Former Billings judge Russ Fagg and state legislator Al Olszewski, the other candidates, were born in Montana and tout their roots.