Tax Professional Newsletter 08/07/20

Tax Department response to novel coronavirus

The Tax Department continues to respond to the COVID-19 pandemic, listening to taxpayers and taking steps to help.

If your client has been directly impacted by the novel coronavirus (COVID-19) and was unable to file or pay their sales tax on time, they may request relief from any penalties that we impose using one of the following methods:

• Online—Log in to their Business Online Services account and select Respond to department notice from the Services menu.
• Phone—Speak directly to a Tax Department representative at 518-485-0384.
• Fax—Fax a written request directly to the Tax Department for review at 518-435-8601.
• Mail—We'll review any request for relief that is submitted in writing.

Please refer to the notice your client receives for mailing address and further instructions on responding to the department.

Make an estimated tax payment for your client

Your client may be required to make estimated tax payments to New York State if they receive certain types of taxable income and no tax is withheld, or if they are subject to the metropolitan commuter transportation mobility tax (MCTMT). (Examples include self-employment income, pension or annuity income, interest and dividend income, and cash payments.)

You can make estimated tax payments for your clients electronically using department-approved tax preparation software, as well as schedule payments in advance. When you include your client’s bank account information, we will automatically deduct the payments on the date specified.

Office of the Taxpayer Rights Advocate

Have you or your client tried to resolve a tax matter without success? Have you exhausted all other administrative remedies within the department? Visit the newly revised Office of the Taxpayer Rights Advocate page and you may find the assistance you need.

The Office of the Taxpayer Rights Advocate was established in 2009 as a place for taxpayers to receive an independent review of their tax situation while promoting and upholding the department's mission of fair and equitable application of the tax laws. Tax professionals should seek help from the advocate’s office once they have exhausted all other administrative remedies. Advocates listen carefully and attempt to find a fair resolution of taxpayer issues. In addition, the advocate participates in the department’s policy committees, lobbies for taxpayer issues, and proposes legislation.

Mailings your clients may receive this month

Your client may be asked to respond to one or more of the letters the department is mailing this month.

You can respond to a notice or bill online to provide additional information, or to protest the bill. This is the fastest way to provide an explanation and attach supporting documentation.

In addition to the notification we discussed in last month’s newsletter—on unreported federal changes—this month’s letters include:

New York State residency change inquiry letter

Your client may receive a New York State residency change inquiry letter requesting information that was missing from or conflicting with their New York State Form IT-203, Nonresident and Part-Year Resident Income Tax Return. Missing or conflicting information may include the date they moved into or out of New York State, sales dates of any capital gains, or addresses and sales dates missing from any properties sold.

It is important that your client respond with the requested information with any accompanying documentation so that we can verify the items reported and the resulting tax responsibility. Failure to respond to the inquiry letter may result in billing for unverified information.

Visit Nonresident and part-year New York State resident forms and instructions for more information.

Statement of Proposed Audit Change

Certain deductions may result in your client receiving a Statement of Proposed Audit Change.

College tuition credit

Your client took the college tuition credit or itemized deduction and their scholarships or grants listed in Box 5 of IRS Form 1098-T are greater than the amount listed in Box 1, Payments received for qualified tuition and related expenses.

NY 529 college savings program

The subtraction modification for the NY 529 college savings program is only allowed for contributions made by the account owner, in that year, to the account owner's own account with limited exceptions. 

Upcoming due dates

8/20/20:

Sales tax return for monthly filers

9/15/20:

• Personal income tax (and MCTMT if applicable) estimated tax payments
• New York S corporation return for calendar year filers who requested an extension
• Corporation tax (New York C corporation and New York S corporation) estimated tax payments for calendar year filers
• Partnership and LLC estimated tax payments (NYS and MCTMT if applicable) (For payments required to be made on behalf of nonresident partners and members and C corporations)
• S corporation estimated tax payments (For payments required to be made on behalf of nonresident shareholders)
• Partnership returns for calendar year taxpayers who requested an automatic six-month extension to file

Stay on top of due dates; bookmark our Tax Calendar.

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