In the fast-paced world of New York, a tax problem can feel like a sudden, insurmountable obstacle. The sheer complexity of federal and state tax laws, combined with the aggressive collection powers of the IRS and the New York State Department of Taxation and Finance (NYSDTF), can leave even the most savvy individual or business owner feeling overwhelmed.
At Fine & Clear Tax Solutions, we understand the unique challenges facing New Yorkers. As a family-owned business led by CPAs Guy Finocchiaro and Annamaria Luca-Finocchiaro, we provide clear, strategic guidance to help you resolve your tax issues. Unlike general practitioners, our sole focus is on tax resolution. We bring years of experience and a personal, results-driven approach to every case, whether it’s an audit, a levy, or complex tax debt.
This guide will provide a detailed look at the most common tax problems we see in New York and explain how having a professional CPA on your side can make all the difference.
The New York State Department of Taxation and Finance: An Aggressive Agency
Many taxpayers are so focused on the IRS that they overlook the power of their state’s tax agency. The NYSDTF is a formidable force with its own set of rules and collection tools. Ignoring a notice from the state can lead to severe consequences, including:
- Tax Warrants: The New York equivalent of a federal tax lien, a tax warrant can attach to your property, making it difficult to sell or borrow against.
- Income Executions: Similar to a wage garnishment, this allows the state to take a portion of your wages to satisfy a tax debt.
- Bank Levies: The NYSDTF can seize funds from your bank accounts without a court order.
These actions can severely impact your financial stability. That’s why it’s critical to address a tax problem head-on and with professional guidance.
Common New York-Specific Tax Problems
While many tax issues are universal, the New York area presents some unique challenges that require specialized knowledge.
1. The New York State Residency Audit
For high-income earners who split their time between New York and other states, a residency audit is a common and often financially devastating problem. The NYSDTF is aggressive in its efforts to prove that you are a New York resident, which would make all of your income—including investment income and capital gains—subject to New York state income tax.
The NYSDTF uses two primary tests to determine residency:
- Domicile: Your permanent, true home. The burden of proof is on you to prove that you have abandoned your New York domicile and established a new one elsewhere. Auditors will examine your “near and dear” connections, including family, banking, and professional affiliations.
- Statutory Residency: This is a more black-and-white test. If you maintain a “permanent place of abode” in New York and spend more than 183 days in the state during a tax year, you can be classified as a resident, regardless of your domicile.
A residency audit requires a painstaking review of your life. Every piece of evidence—from phone records and credit card statements to EZ-Pass and travel logs—will be scrutinized. As CPAs, Guy and Annamaria can help you prepare for and navigate this complex audit, ensuring you have the documentation and strategy needed to defend your case.
2. Sales Tax Audits for Businesses
New York has a high sales tax rate and is known for its aggressive sales tax audits, particularly for businesses in cash-intensive industries like restaurants and retail. The NYSDTF may audit your business records and, if they find discrepancies, use sampling or estimation methods to determine your sales tax liability. This can lead to an inflated tax bill that far exceeds what you actually owe.
An audit in this area can be incredibly stressful and time-consuming. We will act as your representative, handling all communication and ensuring your rights are protected. We will help you challenge the auditor’s methodology and negotiate a fair assessment based on your actual records.
Tax Resolution Options Available to New York Taxpayers
When you owe back taxes to the IRS or the NYSDTF, you have options. We work with our clients to determine the best path forward, which may include one of the following:
1. Installment Agreements
A payment plan, or installment agreement, allows you to pay off your tax debt in monthly payments over a set period. This can be an ideal solution if you are able to pay your debt in full but need more time to do so. The NYSDTF offers this option, and we can help you set up a payment plan that is both manageable and keeps the state from pursuing more aggressive collection actions.
2. Offer in Compromise (OIC)
An OIC allows you to settle your tax debt for less than the full amount you owe. Both the IRS and the NYSDTF offer this program. It is typically granted if you can demonstrate a genuine inability to pay the full debt. For New York, you must prove that payment in full would create undue economic hardship or that your financial condition makes you insolvent. This is a complex process that requires extensive financial documentation and negotiation. As CPAs, we are uniquely qualified to analyze your financial situation and prepare a compelling OIC that maximizes your chances of success.
3. Currently Not Collectible (CNC) Status
If you are experiencing a temporary financial hardship, we can work with the IRS and the NYSDTF to have your account placed into “Currently Not Collectible” status. While your tax debt is not forgiven, the government will cease all active collection efforts for a period of time, giving you the breathing room you need to get back on your feet.
The Fine & Clear Advantage: Experience and Expertise
Guy Finocchiaro and Annamaria Luca-Finocchiaro bring a wealth of knowledge to every case. As CPAs, they have a deep understanding of the financial intricacies that other tax relief providers may miss. We offer a hands-on, personalized approach, taking the burden of dealing with the tax authorities off your shoulders.
Our process is simple and transparent:
- Discovery: We start with a comprehensive, confidential consultation to understand your unique tax situation.
- Analysis: We will conduct a thorough review of your case, providing a clear and honest assessment of your options.
- Action: We handle all communication with the tax authorities, from filing back returns to negotiating a settlement.
When you’re facing the pressure of a tax problem, you need a firm that is committed to your success. Don’t go it alone. Let the tax professionals at Fine & Clear Tax Solutions help you find a clear path to resolution.
Call us today at (516) 209-2594 for a confidential consultation.
