March 2001

State Department of Taxation Creates E-Services Focus Group

The New York State Department of Taxation and Finance recently formed the Electronic Services Focus Group to assist in rolling out new services to taxpayers and tax practitioners.

New York State Society of CPAs’ Municipal and Local Committee former chairs Ken Zemsky and Barry Horowitz and current members Diane Steiner, Mark Levinan, and Arthur J. Gelber, are serving in the group. Other members of the group are drawn from the legal community and industry.

The group has met twice to date, October 17, 2000, and January 18, 2001, at the department’s training facility outside Albany.

“Governor Pataki made taxpayer service an extremely high priority of the Department of Taxation and Finance,” said NewYork State Tax Commissioner Arthur Roth. “These services need to be designed with the input of taxpayer and tax practitioner groups, which is why I formed the Electronic Services Focus Group. I am very pleased with the progress of the department’s staff in developing new taxpayer services and grateful for the group’s input.”

“The department’s outreach to practitioners and taxpayer groups to help it fashion new communications vehicles is very important,” said Zemsky. “There was a time when I was skeptical of the department’s description of taxpayers as customers. I now see a real desire to improve communications with tax practitioners and the public.”

Authentication Service

One service reviewed by the group in October, which has since been rolled out to the public, is personal income tax authentication. This service permits taxpayers to learn the status of their New York state estimated tax deposits.

“The first rule is that taxpayer data is sacred and to be protected at all costs,” said Louise Seeley, the department’s tax processing manager for the PrompTax Program, in October. “The goal is to maintain that protection while providing taxpayer service in a world that no longer operates from nine to five.”

The Department’s authentication model involves an on-line registration application for Internet access. The application is confirmed by mailing a card to the taxpayer at their permanent address with their initial password.

“All taxpayers are considered the owners, of their information, which is why we require taxpayers to set up their own authentication,” said Joel Schensul, director of the DTF’s worldwide office. “After taxpayers obtain their password in the mail, they are permitted to change it and also set up separate passwords for others such as their tax preparer.”

“The taxpayer can access information from the current year and the two prior years,” said Carol Bently, manager of Personal Income Tax Systems. “At present, the service lets taxpayers know the total amount they have on deposit. Eventually, the department hopes to have information available by deposit.”

Taxpayers who have gone through the authentication process can only access their data; they cannot change it. If the total is incorrect, the taxpayer or tax practitioner (if he or she has a password) can submit information over the website to enable the department to track down discrepancies.

“Business taxpayer authentication is a much more complicated model than personal income tax authentication,” said Schensul, “because numerous corporate employees are normally involved with the various taxes being paid by typical businesses and because business taxpayers vary from very small operations to multinational corporations.”

Rich Sniffen, the manager of business taxpayer authentication, outlined the business taxpayer authentication at the focus group’s January meeting. It will initially include two types of tax summaries, corporate tax and withholding tax “PrompTax” payments.

Business taxpayer authorization is entering a pilot phase where a number of business taxpayers will be invited to participate. The program is designed to create a “master” account holder, who, for the present, will be the only person permitted to access the business’ tax information. Within the year, the master account holder will be given authority to set up “delegates” who will be given access to one or more types of tax information.

Once a business taxpayer has been authenticated, the business can propose changes to their estimates, including the way each payment is allocated. The changes proposed over the Internet are then forwarded to the appropriate departmental staff member for processing.

All communications over the Internet occur in an encrypted, or secure, mode. Because of the encryption feature, taxpayers accessing this service need to use level four or higher Internet browsers.

Another electronic service, which is currently being beta tested, is a subscription service that will give members of the public access to technical service bulletins and tax appeals tribunal cases as they are issued. This service will generate an e-mail message to subscribers as new TSBs are issued. Other service areas that departmental staff mentioned to the focus group as being under development include—