Residency audits
One of the most common New York audits asks whether you were a resident for income tax purposes after moving away or while keeping a home here. The state looks at domicile, meaning where your life is actually centered rather than where you are registered to vote or hold a license. Separately, someone domiciled elsewhere can still be taxed as a resident under a day-count test if they maintain a permanent place of abode in New York. Day-by-day proof, such as phone location data, card statements, and travel records, usually carries more weight than a declaration of intent. New York City income tax applies a parallel residency test to the city itself, and the state administers it.
Business audits and other taxes
Businesses are audited for sales tax, withholding, and corporate taxes, and an audit of one tax sometimes leads to questions about another. Information the state receives from the IRS, from other states, and from third-party reports often prompts these reviews. Auditors usually send a written document request with a response date, and extensions are often possible if requested before that date passes. Responses should be consistent with what was reported to the IRS, because the two are often compared. Where a federal audit changed your income, New York generally expects the change to be reported to the state as well.
When the audit ends in a notice
If the audit is not resolved by agreement, the department typically issues a notice of deficiency or a notice of determination. From there, you can generally request a conciliation conference with the Bureau of Conciliation and Mediation Services or file a petition with the Division of Tax Appeals, and the window to do either is short. Decisions of an administrative law judge can be reviewed by the Tax Appeals Tribunal, with further review in the courts. We look at the audit letter, the years involved, and what you have already provided, and plan how to present the facts before positions harden.
