Tax Department's Five-Year Rule Review Plan Starts Again

Published Date:
Jan 14, 2014

Don't like a tax rule? The state is going to give you a chance to change it. The State Administrative Procedure Act (SAPA) generally requires agencies to review existing rules at five-year intervals. To that end, the state tax department is putting up for review a series of 2009 (or older) rules and inviting comments. These rules have already been in effect for at least five years, and the department is not saying it will change all of them—or even any of them. But if you want them left alone, expanded or rolled back, now is the time to put in your two cents.

The full list of rules open for comment is posted on the NYSDTF site, along with instructions for submitting comments, which are due by February 24. Below are some of the key rules likely to be of interest to CPAs.

Department Communications. In 2009, the department changed rules to cover communications to tax preparers and the general public, using the web and email. It changed advisory opinion policy to improve timeliness and protect taxpayer confidentiality. Are you happy with the current status? Can the department find still more ways to communicate? Is anonymity necessary in advisory opinions?

Consumer Bill of Rights. Also five years old is the mandated flier titled "The Consumer Bill of Rights Regarding Tax Preparers." What do you think of this bill of rights: Should it be expanded or modified in any way? Is it satisfactory as is?

Permanent Place of Abode. Nothing gets CPAs worked up like a discussion of this thorny issue. Five years ago the idea was to except any dwelling maintained by fulltime undergraduate students from a definition of a PPA. Dorms were already exempt because they didn't meet older PPA standards, but this 2009 rule exempted undergraduate apartments as well. Should undergrads still be entitled to the PPA exemption whether they live in a dorm or apartment? Or is anyone living in a traditional apartment automatically living in a PPA?

Meals and Lodging. This rule, which goes back to 1999, greatly simplified regulations regarding employee meals and lodging. It retained only provisions that meals and lodging furnished by certain employers to employees are not subject to sales tax if the employers receive no consideration from employees and the values of the meals and lodging are not included as income for the employees for income tax purposes. Is this rule still clear? Does it need to be modified or simplified even further?

Abatement of Penalties. This especially extensive rule expanded the application of reasonable cause to various other penalties imposed by the state tax law that allowed for abatement upon a showing of reasonable cause and an absence of willful neglect. According to the department, the rule created a "broad, uniform reference applicable to various taxes by including penalties that were not previously covered by the regulations and tax articles that have penalties that are jointly administered." Is this abatement rule comprehensive enough—or too comprehensive?

Offers in Compromise. This rule codified the department's policy on offers in compromise. It provided written guidance regarding the grounds for an offer in compromise and the procedures for submission, review and acceptance or rejection of an offer. Is the rule still suitable? Should additional conditions or procedures be added to make offers in compromise harder or easier to get?

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