Get Sales Tax Help When Challenging an NYDTF Assessment
Our team of sales tax professionals help businesses with all phases of their administrative appeal of a wrongful sales tax audit and assessment through the New York Department of Taxation and Finance’s (NYDTF’s) various channels.
New York gives taxpayers the right to representation from a lawyer, accountant, or another sales tax professional during their appeal. At Sales Tax Helper, our experienced consultants give businesses quality, cost-effective guidance when appealing a sales tax assessment. We take the lead on key aspects of the process, including:
- Reviewing your Statement of Proposed Audit Changes and corresponding Notice of Determination (NOD).
- Analyzing your business records, audit papers, and assessment for opportunities to decrease your sales tax liability (e.g., unused exemptions or credits, auditor errors, waivable penalties, etc.)
- Filing necessary appeal forms to the NYDTF’s Bureau of Conciliation or Division of Tax Appeals
- Meeting with NYDTF representatives regarding the exchange of information, settlement options, and other available recourse
- Appearing before the administrative judges at the Division of Tax Appeals to advocate for requested sales tax relief
- Exploring your appeal options after exhausting the NYDTF’s available administrative channels
- Pursuing payment relief through New York’s Offer in Compromise Program and other available settlements.
If you or your client is the recipient of a New York sales tax assessment, continue reading for more information related to appeal options with the NYDTF and contact our office for a free consultation.
How Do I Know the NY Sales and Use Tax Audit Is Over and It’s Time to Appeal?
In New York, your sales tax audit generally concludes with receipt of the Statement of Proposed Audit changes followed by a formal NOD. If you received proposed audit changes but have yet to see a NOD, contact our sales tax professionals as soon as possible about available audit defense[GS1] on your case. You could have an opportunity to dispute the auditor’s findings and obtain a more favorable outcome before an assessment. Please note that the final stages of audit defense are usually not the time to resolve disagreements on taxability under the law, but if you have documents showing tax was paid or exemptions apply, it is a chance to lower your future tax bill with the auditor.
Assuming you have a NOD from the NYDTF in hand, the clock is ticking on your right to appeal the assessment. You must file a written appeal within 90 days of the issuance date. Unlike most phases of the audit itself, the 90-day period is a hard deadline and can lead to the assessment becoming final if you do not file an appeal. Your NOD should state the time limit you have to file the appeal. Again, schedule your consultation with our office as soon as possible after receiving a NOD to avoid an unintentional lapse of your appeal rights.
When Is It Worth Contesting the Results of a New York Sales Tax Audit?
We find, in most cases, that audited businesses have one reason or another to make it worth pursuing an administrative challenge of their NY sales tax assessment. This determination always depends on a case-by-case review of your situation, and there is never a guarantee of success at appeal. That said, our vast experience in sales tax matters puts Sales Tax Helper, LLC in a unique position to evaluate when contesting your audit results could make sense. Some of the most common reasons we see for appealing your New York sales tax audit and assessment results include:
- Your assessment includes significant sales tax penalties that could be removed and are greater than the cost of professional appeal fees.
- You have a disagreement over the legal interpretation or application of New York sales tax laws.
- You didn’t have professional sales tax help during the NYDTF audit and overlooked available reductions in liability.
- The NYDTF and its auditors made mistakes during the audit that resulted in exaggerated reporting of your taxable sales.
- The auditor assessed sales from your business that are not taxable in New York because of exemption or because they were made out-of-state.
There are also some nonmonetary considerations in challenging your assessment from the NYDTF. For example, appeals take time and can often go on for months or even years. Many different factors can change during that time, which could alter the final financial outcome of the assessment. The financial state of the business could change, you can have sales tax professionals could uncover new angles to your case with time, you have longer to gather paperwork that supports your position, and a myriad of other opportunities might occur from simply taking the time to appeal the case. Conversely, forgoing your appeal rights means the assessment becomes final, leaving you liable for the assessed amount.
Could Appeal of Your New York Sales Tax Audit Results Lead to an Increased Assessment?
Another common question we get is whether appealing can result in an increase to your assessment amount. In our experience, challenging the audit rarely results in an increase to the assessment barring egregious or unusual circumstances. That’s because appeals are usually limited to the issues raised during the audit. However, some businesses might have concerns that the auditor over-assessed certain issues while missing or under-assessing others. We can provide an objective opinion on these doubts about your appeal options, so you can make an informed choice before blindly paying the assessment.
What Type of New York Sale Tax Appeal Should I Choose?
Businesses can choose between two options for appealing their sales tax assessments with the NYDTF. You can request a conciliation conference through the Tax Department’s Bureau of Conciliation and Mediation Services or an appeal through the Division of Tax Appeals.
Schedule a Conciliation Conference with the NYDTF’s Bureau of Conciliation and Mediation Services
Appealing cases through a conciliation conference first usually makes sense for a couple of reasons. Conciliation is an informal protest procedure in New York, which means it is (1) often less expensive and (2) faster than going to a formal hearing. The process is conducted by a conferee, who acts as a mediator. Each side presents its case with hopes of finding a middle ground for a settlement. More importantly, the conferee has greater latitude to settle the case than the NYDTF auditor and is why this appeal route can be an effective method for mitigating the fallout of your sales tax assessment.
Request a Formal Hearing Before the NYDTF’s Division of Tax Appeals
Alternatively, you could file a petition for an NYDTF tax appeal hearing after receiving the NOD or even following a failed conciliation. An appeal through the Tax Appeals Tribunal is much more formal than conciliation, and it is an adversarial proceeding, like going to court. Instead of a judge, the case is heard by an administrative law judge. Having a representative well versed in sales and use tax laws, and likely a lawyer, is strongly encouraged at this stage.
Note: Interest and penalties could continue to accrue toward your sales tax assessment during the appeal process.
Can I Contest a New York Audit that Is Final or that I Cannot Afford? Relief Through Offer in Compromise
Absent solid legal grounds or showing improper issuance of the assessment, it can be difficult to get an audit reopened after missing deadlines. In some unique situations, you can request a discretionary review of your New York sales and use tax assessment, assuming you have concrete evidence of an erroneous assessment.
However, you may have an opportunity for relief from final sales tax assessments you cannot pay through the NYDTF’s Offer in Compromise Program. Even though the assessment is final, this program allows a taxpayer to contest large tax liabilities by showing they are insolvent or if payment would create economic hardship. The NYDTF has full discretion to accept an offer in compromise and could look to a variety of factors when determining the assessment’s potential to cause you economic hardship.
Appeal Your New York Assessment with Sales Tax Help from a Professional
Most state tax professionals do not deal with New York sales taxes enough to really know the ins and outs of both the regulations and the administrative procedure of fighting an assessment following an NYDTF audit. Sales Tax Helper, LLC primarily handles state and local taxes and has mastery over the ins and outs of the issues and the procedures that could help reduce your assessment. As state and local tax professionals, we challenge the state revenue agency and other state agencies on a regular basis. Our state sales tax consultants often assist with audits, protests, and resolving tax disputes at the administrative court level. Simply put, sales and use tax is what we do every day.
During our free consultation, we will review your tax audit and discuss ways in which we could achieve the results you want. We regularly reduce the New York tax, penalties, and interest assessed to our clients. Whether you hire Sales Tax Helper or not, get a quick and impartial evaluation for free, so you can make an informed choice on appealing a New York sales tax assessment.
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