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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I live and work in New York State (not in New York City).

Resolved Question:

I live and work in New York State (not in New York City). In mid 2009 I received a request from NYS Depart of Taxation and Finance requesting a copy of my 00 return. After three letters to them asking which year they were referring to (I could not imagine they wanted 00 and thought they wanted a more recent return) they indeed finally answered that they wanted 2000. I sent them the original return which was filed timely on extension in 2001. The first letter I got back from them stated that I owed NYC tax (I don't live in NYC) but that issue was rescinded following my protest letter concerning this. The second issue was that they now claimed never to have received a check with the return of $837, when originally filed and asked me for a copyo f ssame, in lieu of which they are asking for that amount plus interest and penalties, bringing the total to $2000+. I am not able to locate my records from 10 years ago. Am I responsible after so long a time?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

Hello Customer,


The statute of limitations in the state of NY for the collection of back taxes is 20 years from the date the taxes became due and payable. This is covered in NY statute 1092(3)


The date that the taxes became due and payable would be the due date of the return, or the date that the state made any additional assessments to your filed return, whichever is later.


I agree that it is unrealistic that they should just now be coming back to you with a problem from 10 years ago, but by law they have the right to do so. I would also add that we have seen a tremendous amount of questions come through this forum by other taxpayers having similar problems with the state of NY. Many states are facing deep budget deficits and seem to be on a house cleaning mission to collect whatever taxes they still show open on their books, and NY seems to be at the top of that list right now.


You can certainly try to protest this collection effort, but by law they are within their rights to try and collect for up to 20 years.



Thank you



Customer: replied 7 years ago.

Thanks, this was helpful, but obviously not the answer I am looking for. The troubling part of this is that they waited this long to ask for it, and if I had known they were looking for it I would have produced the cancelled check or alternatively I would have paid the tax if in fact I did not. I suspect that the return, along with the check got misplaced by them which is why they are asking for it.

So,.... if I am only required to keep records for 7 years (is that right) doesn't the state have an obligation to ask for it within that time, even if they have a right to COLLECT taxes back 20 years, they have to let me know if they get a return and they don't have the check. They admitted that they got the information preliminarily from our federal return, which admits that they probalby got the state return too since they were mailed together.

What would you write to them in reply then?

Expert:  Merlo replied 7 years ago.

Hello again kjr,


Actually the requirement to keep tax records for 7 years only applies to the IRS and not to the individual states. And even with the IRS, depending on the circumstances, there are times they can even go back further than 7 years. So the 7 years is really just a "recommended" length of time that you keep your records. But it does not prevent them from going back further on this.


I agree with your assessment of the situation in the fact that they may have simply lost the return along with the payment, but unfortunately the burden of proof falls on the taxpayer. I am assuming that you have tried contacting the bank you used at the time this payment would have been made to see if they have anything in their archived records that would go back this far. If not, I would certainly make that attempt before doing anything.


As far as the letter, I can only suggest that you question why they waited so long to notify you of a missing payment, and explain that, as most people, you simply do not keep records going back that far. And under the circumstances, at the very least you might request that they waive the penalties and interest that are being assessed.


I honestly do not know what else to suggest to you other than getting a tax attorney involved, and that might end up costing you more than what the taxes are. It is most definitely an unfair predicament to put you in, but all I can tell you is that legally the state is within their rights to request payment if you cannot provide proof that payment was already made.



Thank you kjr



Customer: replied 7 years ago.

thanks again. The only other consideration here is whether I should invoke the legal doctrines of laches and waiver, i.e. that they had the opportunity to ask for a return in 2001 (or 2002) when they found it missing, and they failed to do so, and therefore there is an implication that they DID receive it,...otherwise they would have asked. I suspect that a whole bunch of mail went missing during that time, and they are just now playing cover up and catch up. The question is whether the onus of proof regarding THAT is upon them (i.e. if there were a lot of people who filed returns with IRS and the state is claiming that they never received NYS Tax form....doesn't pass the smell test!).

Anyway, you are right, a tax attorney will cost multiples of what this is worth, a frequent conundrum for us small people (Leona Helmsley is smiling to us from the grave! :) )

any further thoughts on these issues?

Expert:  Merlo replied 7 years ago.

Hello again kjr,


Honestly the possibilities you are bringing up do involve more of a legal approach here which I do not feel competent enough to address. I can help you with tax regulations and issues of tax reporting, but when trying to invoke legal doctrines, that is really something that is more for a tax attorney to address.


You can certainly try this approach as I do not see where you have anything to lose by doing so, but certainly could not predict the outcome here.


Customer: replied 7 years ago.
thanks. although the sum is not trivial, it is not worth throwing good money after bad in chasing it. I will write a letter best I can and hope for at least an abatement. Appreciate your help.
Expert:  Merlo replied 7 years ago.

Hello again kjr,


I do wish you the best of luck in getting this resolved. As I said earlier, we have seen a flood of posts come through this forum from people in similar situations with the state of NY, so they must be on a mission of some kind.


If this was helpful, I would appreciate it if you would please press the Accept button on this answer.


Thanks again



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