Hey yinz! Our office just got in at least two 2004 NY proposed audits on nonfiled NY returns. Federal returns were filed with an NY address. Tax calculated with heavy penalties; nonfiling and negligence. So, just giving yinz a heads up...the states are digging deep.....
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Calif
Well Joan, you just know that FTB in Calif will be issuing a lot of these notices. They are broke and I even heard that they might not be able to pay out any refund checks on the 2008 tax returns filed.
I am already experiencing notices on Sales Tax and EDD.
Seems like we had this same problem in California several, several years ago, can't remember when, but probably at least 10 years ago.
Sandy -
My state has been doing this for years. After the first year, we learned not to use an in-state address just for convenience so that correspondence goes where you want it to.Originally posted by joanmcq View PostComment
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Yeah, NY has always been a pain on residency issues, but getting two with the same issue from the same (old) year looks to me like a stepped up effort. Both do owe taxes, but not as much since one should have filed a part year return (but will be busted big time for 2005 & 2006) and the other gets a credit for tax paid to NJ.
I know CA is going to be scrounging. One of my friends just rented a new place (former landlord got forclosed on) and is a fairly new state employee, but I don't think he's in danger of getting laid off since he works for FTB. I don't do payroll or sales tax, so haven't seen stepped up efforts there, but you know they'll be going after every dime.
A good way to get clients in the door early; file early or else you may get an IOU instead of a refund!Comment
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New York
is testing also for first time filers in NY-where were they the previous year. That is what we received this week. They requested 2003 NY return for a client. They explained that they had received the 2003 info from the IRS and calculated the income tax based on the federal return, $24,000+ due. In this case it was a U of Michigan grad with a job in CT. He moved June to CT and in Sept 2004 he kept the same job, but moved to NYC. We started filing NY in 2004 and NY-are hoping we missed 2003. I guess they are doing their jobs, but it is all caused by the states current economic conditions. Their search for found money is a pain. They could see 2004 was a part year residency if they looked, but they again want us to do their job and hope for collection on some accounts. We had to file the state forms for 2003 as part of the response.
IRS received their big budget increase in 2007 when as part of the department's presentaion showed facts that had the IRS collecting $4 for every additional $1 added to the audit division of the IRS. If I was on their side that would be enough for me to increase the budget until the 4-1 ratio got smaller.Comment
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NY Tax
I had a similar experience this week.
In 2003,a client was in process of divorce - physically lived and worked in NJ all year, filed M/S, but his mailing address on the tax return was the residence address where the wife still lived.
NYS was asking him for a 2003 NY resident return.Uncle Sam, CPA, EA. ARA, NTPI FellowComment
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