STVK in the News

Tax Audit Success

Residency Audit: Client Saved $2 million

This office has just completed a New York State Residency audit which was referred to us by another CPA. The issue was statutory residency. Statutory residency is where you have a primary residence (domicile) outside of New York, but also have a residence in New York, and spend more than 183 days in New York. These audits focus on a detailed review of documents to establish your whereabouts for every day of the year, and to determine if you exceeded 183 days in New York to be considered a New York resident. At the time of the referral there was an audit finding with a liability proposed for a little over $2 million. My many years as a District Audit Manager for NYS Taxation and Finance give me unique experience that enables me to see the finer points of statutory resident audits and to understand day counting rules and record keeping requirements. As a result, after reviewing the records with the audit staff, I was able to convince the auditors that my client did not exceed 183 days in New York, therefore was not a resident of New York, and the $2 million tax bill was cancelled.

Sales and Use Tax
We are also having tremendous success with Use Tax issues. Use Tax is due when you purchase goods that are taxable under Sales Tax law, but sales tax was not collected on the transaction. This usually occurs when you purchase goods out of state. The vendor may not be required to collect sales tax on the transaction if they have no connection to New York; however you as the purchaser still owe the tax for using the goods, bringing them or causing them to be shipped into New York. Has New York State charged you with use tax on items purchased?

If you’re having a New York State audit, please call Brian Gordon at 516-938-5219 or email at bgordon@st-cpas.com.

News and Events

Changing Nexus Rules: What you need to know

How can states increase revenue without raising taxes? The answer is to create new taxpayers. Many states have created new taxpayers by expanding the reach of their nexus laws. This means making laws that require companies physically located in other states to either pay their state’s taxes or collect their state’s sales tax. This is referred to as economic nexus as opposed to physical nexus.

New York Sales Tax Audits: Are Test Period Agreements Binding?

This article originally appeared in the January 2016 TaxStringer and is reprinted with permission from the New York State Society of Certified Public Accountants.

There are many different types of sales tax audits. Audits of cash businesses, which are often closely-held or family-owned businesses that lack internal controls, are very common. In these audits, records are sometimes incomplete or, as the state audit division would say, "inadequate." An auditor may then employ an indirect method to determine if the reported sales are correct; this could be based on a physical observation of the business, counting actual sales for a full day, or calculating sales using ratio analysis.

Massachusetts Tax Amnesty

The Massachusetts Department of Revenue is providing a Tax Amnesty program effective April 1, 2016 and it will run through May 31, 2016 for qualifying taxpayers. All tax types are included, except for Preferred Provider excise and taxes covered under the International Fuels Tax Agreement (IFTA ).

For more information regarding State and Local Taxes, please visit
Brian Gordon's S.A.L.T Blog at:
www.st-cpas.com/blog.