In August 2013, I wrote a blog regarding New York’s new enforcement procedure to collect state back taxes by suspending drivers’ licenses. The link to my blog post is: http://www.irsproblemsolve.com/2013/08/new-york-back-tax-penalty/. Below discusses a recently published case regarding the license suspension program. The case illustrates how simple it is for NY to suspend a driver’s license for the failure to pay back taxes.
In order to suspend a New York drivers license for the failure to pay taxes, Tax Law §171-v , requires that the taxpayer owe $10,000 or more of NY back taxes. The statute further requires that NY send notification to the delinquent taxpayer of inclusion into the driver’s license suspension program. Upon receipt of the notification, the delinquent taxpayer is provided with 60 days to respond. The taxpayer’s response is limited to the following:
- Pay the back taxes or establish a payment plan
- Notify the Division of a tax exemption; or
- Protest the suspension by filing a request for a conciliation conference with the Bureau of Conciliation and Mediation Services (BCMS) or a petition with the Division of Tax Appeals.
Contrary to popular belief, the IRS wants to work with taxpayers. Owing the IRS money can be intimidating, but you have options. One option when you owe back taxes, is to try to negotiate less than the total amount owed. This is called an offer in compromise, and can be an excellent way for you to catch up financially and move forward with your life.
In some cases, you won’t be able to pay all the taxes you owe. If you can prove to the IRS that you do not have the ability to pay your owed taxes within 10 years, the offer in compromise could be worth trying. Tax Attorney, Todd Unger was recently quoted in a New York Times article that dealt with the IRS and its offer in compromise program. Unger stated that “when the IRS accepts an offer it can be the deal of a lifetime for the taxpayer needing assistance.”Continue Reading...
If you owe back taxes that exceed $10,000 in NY State, your driver’s license may be suspended.
The New York State Department of Taxation and Finance is sending 16,000 suspension notices to delinquent taxpayers. Delinquent taxpayers will then have 60 days from the mailing date to work out a payment plan. The failure to act will result in the NY Department of Motor Vehicles sending a warning letter. If the taxpayer fails to work out a tax payment plan, within 15 days from the date of the second letter, their driver’s license will be suspended. In order to reinstate their license, full payment or a plan to full pay is necessary.Continue Reading...
In order to the alleviate hardships of individuals affected by Hurricane Sandy, the IRS has announced that it will relax procedural and administrative rules that apply to retirement plan loans. The IRS is providing this relief in addition to the postponement of various tax filing and payment deadlines to FEMA-designated areas such as New Jersey, New York, and Connecticut. <!–more–>
To provide disaster relief, the IRS is minimizing the amount of red tape that eligible retirement plan participants would undergo in order to access their money. The standard six-month ban on 401(k) and 403(b) contributions that would normally affect employees who take hardship loans will no longer apply.
The IRS announced tax relief to individuals and business affected by Hurricane Sandy.
The IRS tax relief postponed various tax filing and payment deadlines. Hurricane Sandy victims have until Feb. 1, 2013 to file all tax returns and pay any taxes due. Tax payments and tax returns, include but are not limited to, fourth quarter individual estimated tax payment, payroll and excise tax returns and accompanying payments for the third and fourth quarters. Additionally, tax-exempt organizations required to file Form 990 series returns has been postponed.Continue Reading...
On October 31, 2012, the Internal Revenue Service (IRS) announced that taxpayers and tax preparers have been given until November 7 to file returns and accompanying payments. The relief was issued specifically for those in the areas of the Mid-Atlantic and Northeastern United States that were affected by the storm or by Hurricane Sandy. The announced relief is automatic and does not require filing waivers or extensions.Continue Reading...
The U.S. Justice Department is suing the New York Yankees’ managing general partner, Hal Steinbrenner, son of George Steinbrenner, over what it calls an “erroneous” tax refund.
According to Bloomberg News, citing the complaint, the refund originated from an audit involving the New York Yankees’ parent company for the tax years 2001 and 2002. At the conclusion of the tax audit, the late owner, George Steinbrenner and the IRS settled. The settlement resulted in adjustments to the tax returns of the beneficiaries; Hal Steinbrenner had a 25% interest, of a family trust. Hal Steinbrenner paid taxes in 2008, and then filed an amended 2001 tax return in 2009 seeking a refund because of a $6.8 million net operating loss carried back from 2002.
The IRS is claiming the refund claim was filed late and has sued Steinbrenner to recover $670,493.78.
Refund Claims Must Be Filed Timely, Though Amount of Refund May Be Limited
Generally, speaking the timeliness of a refund claim depends on whether a tax return was filed. If a return was filed, the claim must be filed within the later of: (a) 3 years from the time the return was filed, or (b) 2 years from the time the tax was paid.
Even if a claim is timely filed, the amount of the credit of refund may be limited. In general, the amount cannot exceed the tax paid within the 3 year period immediately preceding the filing of the claim.
Suits By United States for Recovery of Erroneous Refunds Must be Timely.
The recovery of an erroneous refund by suit is allowed only if the suit has commenced within 2 years after the making of such refund unless it appears the refund was induced by fraud or misrepresentation. In that case, the suit may be brought at any time within 5 years from the making of the refund.
The case is U.S. v. Harold Z. Steinbrenner and Christina L. Steinbrenner, 11-02840, U.S. District Court for the Middle District of Florida (Tampa).Continue Reading...
Because of Hurricane Irene, President Obama declared the following New York and New Jersey counties a federal disaster area:
Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren.
Albany, Clinton, Columbia, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Putnam, Otsego, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Suffolk, Sullivan, Ulster, Warren, Washington and Westchester.
Treasury Regulation §301.7508A-1 discusses the postponement of tax-related deadlines because of a federally declared disaster. Taxpayers affected by Hurricane Irene may be eligible for the postponement of time to file returns, pay taxes and other time-sensitive acts.
If you are a New York or New Jersey taxpayer affected by the Hurricane and receive an IRS penalty notice, contact the IRS to request that the IRS abate any interest and any late filing or late payment penalties. On the IRS’s website it states that “Penalties or interest will be abated only for taxpayers if an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.” The IRS also states that “it is waiving the failure-to-deposit penalties for employment (payroll) and tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.”Continue Reading...