Average refunds are down more than 8% compared to last year due to the recently enacted change in tax laws. The primary culprits for lower refunds are:
Reduced State & Local Property Tax Deductions
Reduced Tax Withholding from Paychecks
The shock of a lower refund or even worse, having to owe has been all too familiar to taxpayers residing in the Tri-State area. If you need assistance in helping to prepare for next year by learning how to increase your tax withholding or speaking with a tax professional about your property taxes, contact us at (888) APRIL-15 or click “Book Appointment” above.
Governor Andrew M. Cuomo today announced that 8,900 New Yorkers had their driver licenses suspended for failing to pay taxes they owe the State. The crackdown is the result of legislation signed into law last year aimed at encouraging individuals who owe more than $10,000 in back taxes to settle their bills with the Tax Department.
“We are sending a clear message to tax delinquents that they either have to pay the taxes they owe, or face real consequences,” said Governor Cuomo. “For many, this message is getting through and as a result thousands of people have come forward to do the right thing and find a way to pay their taxes. Those who haven’t are losing their drivers licenses.”
“Driver licenses are a privilege, not a right, and this program has prompted unprecedented action from tax delinquents who were otherwise ignoring their debt,” said Commissioner Thomas H. Mattox. “Thousands have contacted us to do the right thing – pay their tax bills in full, or work with us to arrange a payment plan that satisfies the debt. Those who continued to ignore their debt have had their licenses suspended.”
In the first round of notifications, more than 17,700 drivers were contacted beginning in August, 2013. Along with the 8,900 suspensions, 6,500 tax debtors have either paid in full or are making payments on their debt, while 2,300 were determined to be ineligible for suspension.
As a result of the program, tax collections increased nearly $56.4 million on a state and local basis – a 34 percent increase over the initial estimate of $42 million. The program will continue to raise millions of dollars annually as thousands of other debtors are notified and, ultimately, resolve their debt.
When a driver gets a license suspension notice from the Tax Department, they have 60 days from the mailing date to arrange payment. If the taxpayer fails to do so, the Department of Motor Vehicles sends a second letter providing an additional 15 days to respond. If the delinquent taxpayer again fails to make contact, DMV is authorized to suspend the license until the debt is paid or a payment plan is arranged.
A taxpayer who drives with a suspension in effect is subject to arrest and penalties. Those with a suspended license can, however, apply for a restricted license that allows them to drive to work, and return directly home.
In New York State, 96 percent of taxes are paid by businesses and individuals who voluntarily meet their tax responsibilities. The remaining four percent is collected through the Tax Department’s audit, collections and criminal investigations programs. Through enforcement programs, such as suspension of driver licenses, the Department ensures fair tax administration for all New Yorkers.
According to the New York State Department of Finance and Taxation, the remainder of all delayed refunds should be ready by “early August”:
The wait for state tax refunds has progressively grown longer, reaching 12 weeks and beyond this year, said Phillip Goldstein of CPA firm Goldstein Lieberman & Co. in Mahwah, N.J. He blamed the delay on state labor cutbacks.
“They have fewer people working there, which is holding things up,” Goldstein said of the state. “And this isn’t just a New York issue. We’re seeing this in every state across the board.”
Geoffrey Gloak, spokesman for the state Department of Taxation and Finance, cited the inexperience of a new vendor processing the returns, the New York State Industries for the Disabled.
“The tax department is assisting the vendor to both speed processing and provide quality assurance,” according to a statement issued by the department. “Recovery of the department’s costs associated with this effort and interest payments (to taxpayers) is provided for in the contract and will not come at an additional taxpayer expense.”
If you still haven’t received your refund from NY State, hopefully you will soon. Have you received your NY State refund yet? Let us know in the comments section below.
NY tax commissioner Thomas Mattox recently deputized the entire staff of the NY Inspector General’s office in what is a being dubbed a pre-emptive “crime fighting” move. What was meant to be a quite ceremony has caused a stir because the new powers granted to the IG’s office allows them the ability to look at NY state employee’s tax returns–and potentially any other NY tax return that they dub “relevant” to an investigation–without the taxpayers consent. Mind you, this power is not limited to select IG employees, but rather ALL employees including low-level receptionists and clerks:
In a memorandum of understanding [(MOU)], Mattox made all of the IG employees deputy tax commissioners. He appointed each IG employee by name, from [Inspector General] Biben to secretaries at the IG’s office. The list was filed Jan. 31 with the Department of State. The memo of understanding permits those appointees the right to “inspect state tax returns and state tax return information” to allow the Inspector General to fulfill its “legal responsibilities” and “essential function.” The tax data can be turned over “when the information is relevant and material to an ongoing NYSIG investigation.” The caveat is that the probes must entail the conduct of Department of Taxation and Finance employees or “tax crimes potentially committed by employees” of state agencies.
There is no legislative authority for this data exchange. Several legislative officials and lawmakers did not know anything about the memo of understanding, and some expressed surprise or concern.
Income tax returns contain highly sensitive personal information and this move at the very least raises serious privacy concerns, and at the most may be outright illegal:
Steven Teitelbaum, former chief counsel to the tax department from 1995 to 1999, said the IG is getting unusual powers under a deal that is not lawful. He said the tax commissioner can only make tax department employees deputy tax commissioners. “He’s authorized fishing expeditions,” Teitelbaum said. “He’s given people the authority to look at anyone’s tax return” if the IG “thinks somebody is or may have been cheating.” Prosecutors are not supposed to obtain the data unless the tax commissioner makes a referral to them, he said.
Laurence Stevens, a staff attorney at the tax department for 30 years before retiring in 2007, said the underlying problem is that tax department employees are barred from giving out information from tax returns. “We took that really seriously,” he said, recalling a 1978 case in which the tax department quashed a subpoena from the attorney general’s office when its Organized Crime Task Force sought tax data about suspects it was pursuing. The Court of Appeals upheld the department’s position to deny the data…
“That MOU,” said Teitelbaum, “is one of the most overreaching usurpations of the law that I have seen in almost 12 years of varied state service. This cannot be allowed to continue.” He said public employees should be concerned. Alerted to the memo of understanding by the Times Union, Public Employees Federation spokeswoman Darcy Wells, said…
the IG could infringe on privacy rights of employees. “We have major problems with it,” she said.
State Senator John DeFrancisco called these appointments dangerous and questioned the “legality of the authority given by Cuomo’s tax department, which has strict privacy rules, to his appointed state inspector general, who has broad investigative power…”
Assembly Speaker Sheldon Silver, a Manhattan Democrat, said the issue is a concern because the Cuomo administration is providing private tax records to the Inspector General’s Office investigators without subpoenas or other review by a judge, the way district attorneys and the state attorney general must.
“There has to be some standards,” Silver said Monday.
“I don’t know where legal authority comes from,” said DeFrancisco, a Republican, lawyer and chairman of his chamber’s Finance Committee. “It could lead to simply fishing expeditions. I just think it’s very, very dangerous.”
He said district attorneys and the state attorneys general require a court order to get private tax records — and then only after the investigative agency proves the data is needed for an investigation that’s already under way.
The Governor’s & The NY State Department of Taxation are downplaying these appointments saying that the IG department has affectively had these powers since at least 1996. However, DeFransico–who has been a Senator since 1992–said “This is something that is new to me”. Quite frankly, the fact that it is being downplayed should automatically instill trepidation…especially for NY State employees.
The State of Arizona is taking the first crack at trying to collect sales tax from amazon.com–the biggest online discount retailer. According to a filing with the SEC, Arizona calculated that Amazon owes the state & various cities $53 Million in uncollected taxes from March 1st, 2006 through December 31st 2010.
Amazon plans to defend itself from the charges: “We believe that the assessment is without merit and intend to vigorously defend ourselves in this matter…Depending on the amount and the timing, an unfavorable resolution of this matter could materially affect our business, results of operations, financial position, or cash flows.”
Other states including Illinois, Arkansas, Connecticut, North Carolina, New York, Rhode Island, South Carolina and Texas are all fighting for Amazon to collect sales tax. With severely cash strapped states and the public nature the national debt conversation, it appears it is only a matter of time before online retailers like Amazon are forced to collect sales tax. The outcome of the Arizona suit & others that are sure to follow are of little consequence. Amazon will simply have to collect sales tax or not. However, collecting sales tax equates to higher prices for users of amazon.com. Its usually the consumer that ultimately suffers.
According to the Tax Foundation–a Washington D.C. based research firm–New Jersey & New York Sates were ranked the worst climates in the United States for business.
The Tax Foundation’s “State Business Tax Climate Index” compares the 50 states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property.
New Jersey took the last place among 50 states in terms of business friendliness. New Jersey scored at the bottom by having the third-worst individual income tax, the fifth-worst sales tax, the 13th-worst corporate tax, and the second-worst property tax. The report said New Jersey’s and local tax burden percentage has consistently ranked among the nation’s highest, currently estimated at 12.2 percent of income (first nationally), above the current national average of 9.8 percent.
The report also said New Jersey taxpayers receive less federal funding per dollar of federal taxes paid than any other state, making the Garden State the nation’s biggest “donor state.” Per dollar of federal tax paid in 2005, New Jersey citizens received $0.61 in the way of federal spending.
New York was ranked at No. 49, beating only New Jersey. New York had the second-worst individual income tax, fifth-worst unemployment insurance tax and sixth-worst property tax.
During the past three decades, New York’s state and local tax burden percentage has ranked among the nation’s highest, currently estimated at 12.1 percent of income (second nationally), above the current national average of 9.8 percent.
The 10 lowest ranked, or worst, states in the 2012 Index are Iowa (No. 41), Maryland (No. 42), Wisconsin (No. 43), North Carolina (No. 44), Minnesota (No. 45), Rhode Island (No. 46), Vermont (No. 47), California (No. 48), New York (No. 49), and New Jersey (No. 50).
On the other hand, the 10 best states are Wyoming (No. 1), South Dakota (No. 2), Nevada (No. 3), Alaska (No. 4), Florida (No. 5), New Hampshire (No. 6), Washington (No. 7), Montana (No. 8), Texas (No. 9), and Utah (No. 10).