New York State Audit Advisory To Taxpayers
- Sales Tax News
- Jul 23, 2012 | Chris Lee
The New York State Department of Taxation and Finance published a document advising taxpayers on various aspects of an audit, including the audit process, a taxpayers' rights during an audit and the potential penalties involved.
The New York Department of Taxation and Finance advises taxpayers of their rights to privacy and confidentiality during the audit process, stating that "The Tax Law prohibits the disclosure of information obtained from a tax return..to any unauthorized person." However, this information may be shared ". . . with the Internal Revenue Service and other tax agencies."
When being audited, steps taxpayers may expect include:
- Preliminary conference
- Audit process (may take a couple of days to a few months)
- Findings (changes may be recommended and taxpayers can dispute the results if desired)
If the taxpayer disputes the findings of the auditor ". . . you should indicate your disagreement on the Statement of Proposed Audit Changes and return
the form to the auditor." The statement will then be reviewed at a later date. After the review, should a taxpayer still be in disagreement with the findings, they may pursue other channels, including ". . . the Tax Department's Bureau of Conciliation and Mediation Services or through the independent Division of Tax Appeals."
The document also lists the three most common reasons that a tax penalty is incurred:
- Late filling
- Overdue taxes
- Underpayment of estimated tax
Taxpayers and businesses can avoid tax penalties by accurately calculating their sales tax expenses and paying them in a timely manner. Tax penalties can be quite severe depending on the amount involved.