Friday, April 23, 2010

NYS Tax Update

Lara and Neil attended the NYS Bar Association NYS and NYC Tax Institute yesterday, and while none of these provisions have as of yet been passed, there are a number of proposals that appear likely to be included in the final budget bill.  Among them are:

1)  A provision that would make Covenant Not to Compete payments to Non-Residents New York Source Income if the payments relate to a NY business.

2)  Substantial changes to the OIC program including eliminating the requirement that the taxpayer have either filed bankruptcy or been insolvent, and changing the calculation of the minimum offer from the Maximum Amount that can be Collected Under the Law to an amount that Reasonably Reflects Collection Potential.

3)  The elimination of the client Opt-Out as an automatic ground for the abatement of the penalty for failure to e-file.  (This provision is apparently in response to a concern about the abuse of the client opt-out).

4)  Allowing same-sex couples whose marriages are now recognized in NY to file Joint NY State returns. The filing of these returns will require the preparation of a pro-forma Federal return.

In addition, there are currently two bills before the NYS Legislature (S.6951 & S.2409A) both of which are intended to reverse the current rule that makes LLC members and Limited Partners per se personally responsible for unpaid Payroll and Sales tax regardless of whether they would otherwise meet the definition of Responsible Persons.

Lastly, Acting Commissoner Woodward announced that the NYS website will soon contain a list (in searchable form) of EVERY taxpayer against whom a Tax Warrant has been filed.

These issues will all likely be decided in the next few weeks and months and they will be discussed in detail at future seminars.