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New York Tax Audit: Company President Personally Liable


The New York Tax Appeals Tribunal upheld a decision to hold a company president personally responsible for unpaid sales tax, including interest. 

The Case

The New York Division of Taxation audited CAI Restaurant,  Inc. (CAI) for the period during September 1, 2004 through May 31, 2006. The Division issued a determination to CAI for $122,608.03 in unpaid sales tax and interest.

The Division subsequently sent the company president, Frederick P. Ippolito, a determination for $66,620.28, plus interest for the period December 1, 2004 through May 31, 2006, holding him personally responsible for the sum.

An Administrative Law Judge upheld the Division's determination. However, Ippolito petitioned the New York Tax Appeals Tribunal to have the determination thrown out.

The Decision

The Administrative Law Judge cited New York Tax Law 1133(a), which makes any person required to collect tax ". . . personally liable for the tax imposed, collected or required to be collected...."

Before the Division sent Ippolito the determination, Ippolito's attorney filled out questionnaires indicating that 1) Ippolito was the only president of the corporation during the three previous years and 2) that Ippolito ". . . was responsible for preparing or supervising the preparation of sales tax returns and ensuring the remittance of tax...."

Based on the above, both the Administrative Law Judge and the New York Tax Appeals Tribunal upheld the Tax Division's determinations.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Will Frei
Avalara Author Will Frei
Will Frei covers sales tax news including best practices, legislation and sales tax technology. He is the Social Media Manager at Avalara.