New York Taxing Information
In our experience, New York’s state agency is particularly aggressive when it comes to tax collection. Please contact us directly if you have an issue with the New York Department of Taxation and Finance.
Driver’s License Suspension
If you maintain a particularly large tax liability, the state may suspend your driver’s license until such time as your liability is paid or otherwise addressed.
If all other means of collecting your tax liability have been unsuccessful, and there is already a tax warrant in place (which is likely by this point), the state may seize your real or personal property and sell it at auction. You will be notified of various steps and results throughout this process, and proceeds exceeding the amount you owe will be returned to you. The state may also take steps to protect its interests. If at any point you fully pay your liability, the property will be released.
The state may seek to resolve your tax liability by levying a third party for your money, up to the amount owed. This can include your bank accounts, as well as money owed to you in the form of loans, rent, etc.
If you are or believe you will be subject to a levy, seeking assistance in a timely manner can make all the difference. This is because there is a holding period during the levying process, in which you can dispute or otherwise act to affect it. Bringing in professional assistance at this point can prevent your funds from being transferred, and help you arrange proper, manageable means of resolving your liability.
Priority One: Stopping Aggressive Enforced Collections
Generally, married partners are both held responsible for tax liabilities, so if one fails to pay a due tax, the other may have to. However, you may be exempt from doing so if:
- A joint return contains an understatement of tax due to omission or error
- You did not know and had no reason to know of the understatement
- Given a full account of your situation, it would be unreasonable to hold you responsible
Installment Payment Agreement
You may be able to pay your tax bill in monthly installments if you cannot pay it in full. Penalties and interest will continue to accrue on whatever portion of your liability is left unpaid. The state is obligated to protect its interests, so you will need to comply closely with the terms and conditions of any agreement you make with them, lest you incur further penalties or an enforced collection process.
Legal Representation and Power of Attorney
You can appoint another party to represent you before the state. To do so, you must complete and submit the appropriate documentation, which can be found here: https://www.tax.ny.gov/poa/default.htm
Offers in Compromise
In very particular cases, the state may accept settlement of a tax liability for less than its full amount. This is done through an Offer in Compromise, and is typically reserved for those in financial distress. This includes parties that are insolvent or discharged in bankruptcy and individuals for whom full payment would create undue economic hardship. As with an installment agreement, you will need to comply with any terms and conditions given to you by the state if you wish to pursue an OIC.
Penalties and Interest
Failure to pay or file your taxes on time will result in additions to your total liability in the form of penalties and interest. Each varies in amount by the circumstances and type of tax left unaddressed. Current rates and a calculator can be found here: https://www8.tax.ny.gov/PAIC/paicHome
If you are found to be a person bearing responsibility for tax matters within a business, corporation, or other such entity, you may be held personally liable for shortcomings in such matters (i.e. failing to adhere to tax code), and be assessed as such.
If you disagree with an assessment, you can dispute it per the instructions for doing so that are included in a notice of assessment. Disputing an assessment will require that you provide evidence to support your case. Once a responsible person assessment is finalized, the person concerned becomes subject to all collection methods available to the state.
Sales Permit Inhibition
A Certificate of Authority to collect sales taxes may be revoked or suspended if the tax code is not complied with. Conducting business that requires a Certificate of Authority will be prohibited. You will be notified prior to the initial revocation or suspension, and it will be lifted only when the associated tax issue is resolved.
If you maintain a tax liability, the state may file a tax warrant, which serves as a public notice of liability and creates a lien against your real and personal property. Warrants enable further enforced collection actions, including levies, income executions, and seizures, and are lifted once the tax liability has been satisfied.