New York Tax Audit: Company President Personally Liable
- Sales Tax News
- Sep 5, 2012 | Will Frei
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 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.
Sales tax liability is risky business. Discover how AvaTax can accurately automate your sales tax management process so you can rest easy in the event of an audit.