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Annual Tax Institute Features Presentation from New Taxpayer Advocate
By Dennis W. Jewell
Buffalo Chapter President Buffalo tax attorney Jack Trachtenberg has left a position at one of Buffalo's largest law firms after seven years to become the state's first Taxpayer Rights Advocate at the New York State Department of Taxation and Finance in Albany. The 32-year-old Trachtenberg is a Binghamton native and a 2002 graduate of the University of Buffalo Law School. The position was created to balance the state's recently amplified enforcement actions with taxpayer service to ensure that the tax laws are reasonably and fairly applied. Trachtenberg reports directly to Department of Taxation and Finance commissioner Jamie Woodward. Trachtenberg recently addressed the 56th Annual Tax Institute, held in Buffalo, and stated that the Office of the Taxpayer Rights Advocate has three main goals: 1) Direct Assistance to Taxpayers, which means getting directly involved in cases where the taxpayer has been unable to resolve their problem through normal tax department channels.
2) Systemic Advocacy, which is looking at the "big picture" and identifying and addressing systemic problems with tax laws, regulations, policies, and tax administration.
3) Reports, which means filing annual reports to the tax commissioner and state Legislature on problem areas and recommended reforms. According to Trachtenberg, the state uses cutting edge databases that intelligently integrate and analyze information from many different sources, such as various licensing agencies, courts and the DMV in order to identify suspicious activity. He added that the state's large deficits have led to increased enforcement in the areas of audit and criminal investigations. "There is no doubt that there is a lot of fraud going on out there," said Trachtenberg, adding that Deputy Commissioner for Tax Enforcement William Comiskey is committed to bringing violators to justice. He cautioned that taxpayers and their representatives shouldn't contact his office until they have first attempted to resolve their dispute through normal tax department channels, such as talking with an agent's supervisor. His office may grant exception to this policy, however, if adverse action is imminent and such action would cause undue harm. He also stated that one of the biggest problem areas that his department will be addressing is in collections. A large number of large and very old tax liability cases are still on the books, and the state is attempting to collect them with increasingly aggressive methods. Often, however, these cases are not collectible and, in Trachtenberg's opinion, the state is therefore wasting resources pursuing these taxpayers. "The collection procedures are often pushing well-meaning and potential productive citizens underground, giving them an incentive to leave the state, move their assets out of state or take other actions to avoid collection of these liabilities which are often very, very large due to the quick manner in which penalties and interest can accrue. Many of these taxpayers try to pay off their debts but are simply never able to keep up with the penalties and interest," said Trachtenberg. Some of his recommendations for collections reforms are: - Set a time limit to docket sales tax warrants.
- Establish a clear and definite statute of limitations for collections.
- Reform the installment payment plan program.
- Create a new, formal "uncollectable" status.
- Cap penalties and interest.
He also said that he supports a new program proposed by Governor David Paterson, Penalty and Interest Discount Program, or PAID. It would give taxpayers with old liabilities a chance to clear up their debts with an up to 80 percent discount on penalties and interest. The legislature is expected to consider this proposal in the near future. He would also like to see reforms in the Offer in Compromise Program, feeling that the current program is not working. There are many cases where the taxpayer should receive relief but the program is not available to them. His ideas for improvement in this program include: remove the insolvency requirement, modify the minimum offer requirement, create a formal hardship exception, permit offers based on doubt as to liability and grant appeal rights for denied offers. Trachtenberg is looking for feedback from CPAs and other tax professionals. He expects that his new Web site will be up and running by the time this article appears. He can also be contacted at the New York State Department of Taxation and Finance, Office of the Taxpayer Rights Advocate, W.A. Harriman Campus, Building 9, Albany, N.Y. 12227.
He can be e-mailed at jack.trachtenberg@tax.state.ny.us.
Dennis W. Jewell can be reached at dwj@jewellcpa.com
Click here for a list of the Buffalo Chapter's past presidents. | 