Owe NYS Income Tax or Sales Tax? [10 Must Know FAQs]

What is a NYS tax warrant?

A tax warrant is lien against any real estate or any personal property that you own.

A tax warrant gives the NYS Department of Taxation and Finance  the legal authority to pursue collection activity against you. It is typically the first step in the collection process.

Once a tax warrant has been issued, the NYS Department of Taxation has the legal authority to issue a bank levy; go after a percentage of your wages; or seize your property.

The tax warrant will be recorded at your local county clerk's office as well as the New York Department of State.

Since a tax warrant is a matter of public record, it will be often picked up by credit reporting bureaus.

As such, a tax warrant can possibly have a negative impact on your credit as well as impede your ability to borrow or sell the property against which the tax warrant has been issued.

Typically, a tax warrant will stay in effect until such time that the state tax liability is satisfied or 20 years, whichever comes first.

Can NYS Take My Wages or Income ?

If you owe NYS income tax to the NYS Department of Taxation and Finance, your employer may likely receive an income execution.

Your employer will be required under the law to withhold and send 10% of your gross income or 25% of your disposable income to the NYS Department of Taxation and Finance until such that that the tax liability is paid.

In other words, an income execution is an ongoing levy.

A percentage of your wages will be automatically deducted and forwarded to the state based upon how frequently you are paid (weekly, biweekly, etc.).

Can NY issue a bank levy?

Yes. Just like the IRS, the NYS Department of Taxation and Finance uses bank levies as a common enforcement tactic to collect back taxes.

Can NY seize and sell my property?

Yes. Before your assets are seized, a tax warrant will be issued.

The asset will be seized and you will be advised of the date of sale of your property.

If you reach an agreement with the state prior to the sale date, your property will be returned to you.

Otherwise, your property will be sold at public auction for fair market value.

If the value of your property exceed the amount of your tax liability, including penalties and interest, then you will receive the balance.

Why Did NY Suspend My Driver’s License?

NYS Back Tax Driver’s License Suspension Law is the one of the many aggressive tactics that the New York State Department of Taxation and Finance may employ to collect back taxes.

The first question you may ask is: “ Is this legal?”

The answer, unfortunately, is “yes.” 

Section 171-v of the New York State Tax Law allows NYS to suspend the driver’s licenses of individuals who owe $10,000 or more in back taxes.

This amount is cumulative of the assessed balance along with penalties and interest.

For example, you owe back taxes on your NYS income tax return in the amount of $6500. However, over the years, penalties and interest continue to accrue on the tax liability.

If the balance is now over $10,000, your driver’s license may be suspended.

This tax law was signed into place by Governor Cuomo. It is called the “Driver’s License Suspension Program.”

This tax law was signed into place by Governor Cuomo. It is called the “Driver’s License Suspension Program.”

Also, there is a proposal in place where an applicant for a business license or professional license would be required to enter into a payment arrangement with NYS for back taxes prior to to the license being issued or renewed.

While neither of these two proposals have been made into law of yet, it would not be surprising for these two proposal to become part of the New York State Tax Law given the aggressive stance of the NYS Department of Taxation and Finance in collecting back taxes.

I Got a Visit From a NY Tax Agent

If a tax warrant, levy, or income execution didn't get your attention or you owe a large balance in back taxes, do not be surprised if you hear a knock on your door.

That knock will be from a NYS Department of Taxation collection officer that wants to “discuss” your New York State tax problem.

Certain collection officers can be intimidating, to say the least.

If you contacted by a NY Tax Agent, your tax problem has taken a priority in the eyes of the New York Tax Department so contact us for tax help.

Tax Liability is My Spouse's Fault?

When you file a tax return with your husband or wife, you are both responsible for the tax liability regardless of how it was incurred.

In legal terms, you are jointly and severally liability for the taxes as well as the penalties and interest that accrue.

If the tax liability is a result of your spouse’s income, you may qualify under circumstances to be exonerated from the tax liability.

Can I settle my NYS tax liability?

Under certain circumstances,  we can settle your NYS taxes with an Offer in Compromise. 

We will have to prove under the New York State tax laws that collecting the tax liability will result in an economic hardship to you and that it is in the best interests of the New York State Department of Taxation and Finance to accept the settlement. 

To determine the likelihood of success, we will need to apply the tax laws to the specifics of your situation. 

NYS Interest and Penalties 

The statutory interest as well as the tax penalties can be crippling. 

In certain circumstances, penalties and interest can  equal or exceed the amount of the tax liability

You are likely being charged a failure to pay penalty and if you did not file your taxes, a failure to file penalty.

In certain circumstances, New York State may allow a taxpayer to abate the penalties based upon reasonable cause.

We  can help you determine whether you have grounds for a penalty abatement under the NYS tax law.

NYS Tax Payment Plan 

The worst  thing that you can do is  ignore the collection notices that you are receiving from the New York State Department of Taxation and Finance. 

The reason is twofold: 

First, the interest and penalties continue to accrue at an astounding rate.

Second, the Department of Taxation and Finance is an aggressive taxing authority.

Ignoring the notices from NYS subjects to levy action and your waiver of possible appeal rights in certain circumstances.

Prior to setting up an NYS tax payment plan, a game plan should be established to solve your tax problems under the most favorable terms while protecting your interests.

Here are a few of the issues that should be addressed to get you the best outcome:

1. What is your history of compliance with NYS?
2. Do you qualify for a NYS Offer in Compromise?
3. Can the penalties be abated for the tax years in question?
4. Do you have any unfiled tax returns ? and if so, should we do a voluntary disclosure?
5. Are there any tax levies in place? 
6. Given your income and expenses, what would be an affordable?

Neither the New York State Department of Taxation  nor the IRS represent your interests. We can protect you  and ensure that the best option to resolving your tax liability is pursued. 

Solving Your NYS Tax Problem [ the first step ]

The New York State Tax Department is highly aggressive and your tax problem will only get worse over time [ interest and penalties compounding daily] so do not procrastinate.

Contact us today for help with your tax problems.