Archive for the ‘New York’ Category

New York $1.2 Million, Indians 0

Monday, July 18th, 2011

I may be a baseball fan, but this post has nothing to do with the Cleveland Indians. Rather, here’s the latest chapter in New York’s war against Indian tribes selling cigarettes. In June, a New York Appellate Court lifted an injunction that prevented New York from collecting cigarette taxes on cigarettes sold on Indian reservations in the Empire State. The Indian tribes vow an appeal, but unless this ruling is reversed, Indian tribes must collect tax on cigarettes imported onto their reservations.

So the tribes plan on emphasizing their own manufactured cigarettes. Because those are made on Indian lands, they are exempt from New York sales tax.

Meanwhile, New York has begun seizing tobacco products heading to Indian reservations that lack appropriate tax stamps. The total value of tobacco products seized was $1.2 million; this would have resulted in just under $300,000 of tobacco taxes collected by New York.

I doubt we’ve heard the last of this battle.

You Will eFile in New York

Sunday, October 31st, 2010

I have a few clients in New York (about 20). I have one client who strongly dislikes efiling. It appears he won’t have a choice for his 2010 tax return if I prepare his return. New York has implemented mandatory efiling for most tax professionals.

New York has removed the option of client’s opting out of efiling, and they’ve rescinded their form that allowed for this (Form TR-800 no longer exists). And most tax professionals will fall under the requirement that mandates efiling. If you prepared 100 or more returns for any jurisdiction in 2009 and prepare one or more New York returns for 2010 using tax software, you fall under this mandate for the 2010 tax year. Alternatively, if you fell under the New York efile rules in a prior year the mandate applies to you.

While Robert Flach won’t fall under this mandate (he doesn’t use tax software), almost every other tax professional will. And I don’t like it one bit. It’s not that I’m against efiling (I’m not, and believe it’s the best way of filing returns in most cases) there are situations where efiling is not the best choice. These usually involve complex returns where I want to include additional documentation with the return. (A few states allow pdf files to be submitted with an efiled tax return. It’s unclear whether this will be available for New York returns in 2010.)

Finally, it’s the client that should have the final say in this matter. Take my client who dislikes efiling. If he continues to utilize my services, I’m required to efile his returns. I could lose his business over this mandate and there’s nothing I can do about it (except violating the law). It may be that this law overreaches and is, in some way, unconstitutional. That said, most of my clients are outside of New York and the loss of one client won’t be a big deal for me. Still, possibly losing a client for this reason really irks me.

Indians and Yankees Head to Extra Innings

Wednesday, September 1st, 2010

No, not the Cleveland Indians and the New York Yankees. Instead, it’s the on-again, off-again battle between the State of New York and the Indian tribes of New York state on collecting cigarette taxes.

The Indian tribes sell cigarettes, and they don’t want to collect New York taxes on cigarettes. They view themselves as sovereign nations, and New York law doesn’t count.

On the other hand, the State of New York believes that it doesn’t matter: If you’re located within the boundaries of New York state (and these tribes are, at least geographically), then cigarette taxes must be collected.

This is a big money maker for the tribes, so this is a battle that will likely drag on and on and on. Today’s salvo had a judge putting a halt to the collection of taxes for at least the next two weeks. It’s as if the Indians scored a run in the top of the 13th inning. We’ll soon see if the Yankees can either tie the score or go ahead.

A Method to the Evasion

Tuesday, June 29th, 2010

I am not into hip hop music. I had never heard of the individual mentioned below. But “Method Man” is apparently really, really big, so on we go.

Clifford Smith, aka Method Man, is just your typical hip hop artist. He earned a nice living from 2004 – 2007, at least if you looked at his federal tax return. His state return told a different story, though. He forgot to file his New York tax returns. That became more than an “oops” when the New York State Department of Taxation and Finance discovered the omission.

Mr. Smith pleaded guilty to a misdemeanor charge of attempted tax evasion. If he stays on the good side of the state tax authorities his conviction will be wiped off the books in a few years (he received a conditional discharge).

Mr. Smith’s attorney told the New York Daily News that it’s unfair to call Mr. Smith a tax cheat. I agree completely. Mr. Smith is an attempted tax cheat. He has made restitution of the $106,000 he owed and, if all goes well in about four years there will be no record of this.

Only in Government Can the Lender and Borrower be the Same

Sunday, June 13th, 2010

When I read this, I did a double take. From the New York Times:

Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

Of course this makes no sense. And of course it will come back to hurt New York State. For politicians, though, a problem postponed is someone else’s to deal with…and, thus, nothing to be concerned with.

That’s just like Lt. Drebin at the end of the clip (below): There’s nothing to see here (unless you’re a concerned taxpayer).

What Do Hawaii, North Carolina, New York, Illinois, and California Have In Common?

Sunday, February 21st, 2010

The Tax Foundation noted last week that several states will be delaying income tax refunds. Hawaii won’t be sending out refunds until July 1st; North Carolina will send them out “when they feel like it,” and New York Governor David Paterson wants to delay refunds for those who file in March. Meanwhile, Illinois is simply not paying its debts.

Meanwhile, it’s almost a certainty that California will be joining this list. Barring a miracle in the Legislature (the Democrats and Republicans and Governor Schwarzenegger coming to an agreement in the next few weeks), registered warrants (aka IOUs) will have to be sent out beginning in late March or early April. Controller John Chiang implied this when he said the state was running out of cash. Meanwhile, the Democrats in the legislature continue to pass big ticket programs (e.g. healthcare legislation) so it’s as if they’re living in dreamland.

“I am not a crook.”

Sunday, February 7th, 2010

New York will soon have a ‘racino’ at Aqueduct Race Track in Queens, New York. (A racino is a race track that also has slot machines.) Governor David Paterson chose Aqueduct Entertainment Group to build and run the racino. New York Assembly Speaker Sheldon Silver is quoted in the New York Post as saying that no investor could have a felony conviction, “or any other crime or offense involving . . . misappropriation of funds, or tax evasion.”

It turns out that one of the partners in AEG is Queens developer Darryl Greene. Mr. Greene, according to the Post doesn’t have any convictions. However, companies he’s involved in owe $1 million in state income taxes.

Well, that’s still not a conviction…

This has apparently been a big story in Albany. The process is clearly political and with elections coming up this Fall, expect the Republicans in the New York legislature to hold hearings and make this into a political football.

Government 2, Democrat 0, Republican 0

Sunday, January 24th, 2010

Roger Corbin was a founding member of the Nassau County (Long Island, New York) Legislature. He was arrested last year and accused of filing false federal tax returns and lying to agents of the FBI and IRS. He allegedly received $226,000 from developers—checks made out to “Cash”—and deposited them in his personal account. He then allegedly ‘forgot’ to include them on his tax return. He compounded this by then allegedly lying to government agents.

His attorney, Thomas Liotti, told the Associated Press that he will plead guilty to tax evasion on Monday. Mr. Liotti, a Democrat, was defeated in his re-election bid last fall.

Across the Hudson River, another politician is in trouble. Leonard Kaiser, the former Republican mayor of North Arlington, New Jersey, and the former executive director of the Bergen County Utilities Authority and the Meadowlands Commission, pleaded guilty to tax evasion. Mr. Kaiser’s wife also pleaded guilty to a similar charge.

Mr. Kaiser’s troubles stemmed from his 2002 re-election bid. Mr. and Mrs. Kaiser wrote checks from their 2002 campaign fund to Mrs. Kaiser for “salary.” However, New Jersey law doesn’t allow personal use of campaign funds, and the payments weren’t disclosed on campaign financing documents or on their tax returns. Given that the total income involved is $30,000, a minimal sentence is likely.

Public servants indeed.

New York: $1 Billion in New Taxes Proposed

Thursday, January 21st, 2010

The headline says it all: Yet another politician who doesn’t understand what voters want. New York governor David Paterson (D) proposed a $134 billion budget that contains $1 billion in new taxes:

  • A $1 increase in the cigarette tax to $3.75/pack;
  • A new tax on sodas of $0.01 per ounce; and
  • 50 speed cameras that will issue tickets at $100 a pop.

Governor Paterson is up for re-election this fall. I suspect voters will remember the proposed budget and the speeding cameras at election time.

Knocked Out From New York

Wednesday, November 18th, 2009

I’m not a boxing fan. For those of you who are, you’ll recognize Manny Pacquiao and Floyd Mayweather Jr. as big names in the sport. Those two boxers will fight in the Spring of 2010.

Newsday asked boxing promoter Bob Arum if Yankee Stadium was being looked at for the fight. “No chance,” Arum told Newsday. “Nothing would please me more than to have it at Yankee Stadium, but the way the tax structure in New York is set up, it’s impossible.”

Taxes matter. Apparently the prime candidate for the match is the new Cowboys Stadium in Arlington, Texas. Texas, of course, doesn’t have a state income tax.