By Simon Eskow

New York City’s Department of Finance Commissioner Martha Stark and members of the New York State Society of CPAs recently discussed cooperation over tax issues as the city faces a gaping budget deficit.

Stark, who became head of the department in February, met with members of the Society’s State, Municipal and Local Taxation Committee in a formal introduction in early November.

“I just wanted to talk about my vision for the department of finance,” Stark said. “I want to keep people thinking…We have more than a $5 billion budget gap. We have to cut our budget, but we have some revenue options on the table.”

Stark said cooperation with CPAs to help shore up the budget deficit without “misusing” taxpayers made sense.

The committee has met quarterly with representatives of the city’s taxing authority to discuss topics such as the Unincorporated Business Tax (UBT), online filing and other issues. But the meeting with Stark seemed to set the tone for ongoing cooperation between the interests of CPAs and their clients and the needs of a cash-starved city.

“I think the meeting went great,” committee member Barry Horowitz said. “She seems very hands-on and willing to help on the business side.”

Members of the committee asked Stark to review the 4 percent UBT, which they said punished small-business clients by taxing activity conducted outside of the city. They also asked whether the city would follow the state’s lead in offers-in-compromise, and if the department could provide guidance on certiorari proceedings.

Members suggested they could help the department educate city tax agents on tax law, and to review tax forms, especially for the purposes of electronic filing, which they said is impractical at the moment because a client’s tax return can reach up to 100 pages.

“We’ve had a great relationship with your department,” committee Chairman Mark Levin told Stark. “We’d like to know what we can do to help you. We’re open to suggestions and we’ve never been shy about saying anything. We’ll do what we can.”

Stark grew up in the city and attended New York University, first as an undergraduate, and then as a graduate of its law school. She has had a long career in government, including stints with the state department, which she jokingly said helped her deal with unpaid traffic tickets in the city’s diplomatic community.

Stark said she got her first glimpse of tax fairness at the age of 14 when she helped her father file 1040s for neighbors at $20 a form.

“I started to help him and I’d get $5 for every return I did, until I realized that he wasn’t paying me enough,” Stark said. “So we agreed we’d get $10 each. It was the beginning of my commitment to tax fairness, and I came to realize the importance of tax services.”

Stark said that under her guidance, the department would have a greater commitment to customer service, part of which includes implementation of a new audit technology system, not yet fully in place, that will help agents target audit issues better.

“We want to make sure all auditors will be lifted to a higher level of professional inquiry,” she said.

Stark said the department is working to improve its relationship with the tax tribunal, the city’s independent appeals court for tax issues, to ensure that city taxpayers aren’t “turned upside down” by the tax-collecting process.

While the city is working on revenue options within its power, members asked about the potential impact of the “commuter tax,” which would have to be approved by the state legislature. Stark said a study showed the tax could represent a $500 million boost to the city’s budget. New York needs the state to help bridge the budget gap, Stark said, especially considering the city pays a larger portion of its services than any other city in the U.S. except for Washington. She added that the city is working “cooperatively” with the state on that and other issues, like a tax on trade shows and joint audits with the state and the Internal Revenue Service on tax returns for certain entities.

Unilaterally, the city will question whether the taxes are “broad-based” and evenhanded, with agents spending more time tracking down “folks who aren’t paying their fair share,” she said.

Committee members said they’d be open to help wherever they could, especially in educating agents on the intricacies of tax law, and reviewing forms. Members said they would continue with their quarterly meetings with representatives of the department.