THE CITY OF NEW YORK
DEPARTMENT OF FINANCE
BILL DE BLASIO, MAYOR
JACQUES JIHA, COMMISSIONER
TAX REPRESENTATIVES AND
PRACTITIONERS PROGRAM
OCTOBER 19, 2015
Fair, Efficient, Transparent, Exceptional Customer Service 2 Taxpayer Representatives and Practitioners Program (TAXRAPP) New York Athletic Club 180 Central Park South New York, NY 10019
Monday, October 19, 2015
Event Program
7:30 - 8:30 REGISTRATION AND CONTINENTAL BREAKFAST
8:30 - 9:00 WELCOME AND INTRODUCTIONS
Jacques Jiha, Ph.D., Commissioner New York City Department of Finance
Jerry Boone, Commissioner New York State Department of Taxation and Finance
9:00 - 9:50 TRANSPARENCY IN THE AUDIT PROCESS
The Department of Finance has undergone a significant shift toward a more transparent business model that makes tax-related information and data, Agency budgeting and spending publicly available to New York City residents. For tax practitioners, that means making sure that our rules, policies, and statements of audit procedure and other written policies are clear and easy to understand. Our goal is to become more transparent in all of our business practices. This panel outlines the major steps we’ve implemented, and provides an overview of our ongoing initiatives.
Moderator:
Richard Genetelli, President The Genetelli Consulting Group
Panelists:
Harry Leonard, Esq., Deputy Commissioner, Tax Audit & Enforcement New York City Department of Finance
Diana Beinart, Esq., Deputy Commissioner and General Counsel New York City Department of Finance
3 Cesar Bencosme, Assistant Commissioner, Tax Audit New York City Department of Finance
9:55 - 10:50 NEW YORK CITY CORPORATE TAX REFORM:
AN ESSENTIAL PRIMER FOR TAX PRACTITIONERS
New York City’s Corporate Income Tax has been significantly reformed and is in effect for tax years beginning on or after January 1, 2015. The City’s new Corporate Tax structure streamlines and modernizes the taxation of C-Corporations doing business in the City, and conforms to changes enacted to New York State’s Franchise Tax in 2014. Leading experts will outline the benefits and changes for the business community and how the new tax rates for small businesses and manufacturers can help your clients grow their businesses.
Moderator:
Michael Hyman, First Deputy Commissioner New York City Department of Finance
Panelists:
Zal Kumar, Esq., Director, Office of Taxpayer Services New York City Department of Finance
Deborah Liebman, Esq., Deputy Counsel New York State Department of Taxation and Finance
Andrew Eisner, Esq., Director of Tax Law, Office of Legal Affairs New York City Department of Finance
Peter Faber, Esq. McDermott Will & Emery, LLP
Michael Goldsmith, Esq. Ernst & Young, LLP
Lance Rothenberg, Esq. Hodgson Russ, LLP
Kenneth Zemsky, Esq. Anderson Tax
10:50 - 11:05 BREAK
4 11:05 - 12:00 HOW, WHEN AND WHERE TO CHALLENGE A NEW YORK CITY BUSINESS OR EXCISE TAX ASSESSMENT
This panel will take a comprehensive look at the procedural rules and practices governing the various forums for challenging New York City business and excise tax assessments. Know what to expect at the Audit Exit Conference. Hear directly from the Director of the Conciliations Bureau and the President of the New York City Tax Appeals Tribunal as they, along with leading practitioners, provide tips on how to effectively represent your clients.
Moderator:
Maria T. Jones, Esq. Kramer Levin Naftalis & Frankel, LLP
Panelists:
Michael Newmark, Esq. Director of Tax Advocacy and Resolution New York City Department of Finance
Duncan Riley, Director, Conciliations Bureau New York City Department of Finance
Ellen Hoffman, Esq., President New York City Tax Appeals Tribunal and New York City Tax Commission
Leah Robinson, Esq. Sutherland Asbill & Brennan
12:15 – 1:30 LUNCH AND KEYNOTE ADDRESS
Nina E. Olson, Internal Revenue Service National Taxpayer Advocate
“The Role of the Taxpayer Advocate in Bringing Transparency and Accountability to Revenue Departments”
1:40 - 3:00 THE NEW FACE OF FINANCE: A CUSTOMER-CENTRIC BUSINESS MODEL
The Department of Finance has a brand new business model focused on providing exceptional service and improved experiences for our customers. This panel will explore the new initiatives already in place that are enhancing our professional services. They include helping customers navigate the City’s tax policies and procedures. Hear from the
5 first-ever New York City Taxpayer Advocate, responsible for assisting taxpayers in navigating tax procedures and identifying systemic issues; and the Director of the newly established Department of Taxpayer Services, who will serve as an intermediary between the Department of Finance and tax professionals, ensuring that the business and excise tax policies of the Agency are clearly communicated. We will also discuss how we are leveraging technology to enhance our services and business relationship with you. Have questions on recent improvements in payment processing and E-Services? We’ve got answers.
Moderator:
Jeffrey Shear, Deputy Commissioner for Treasury and Payment Services New York City Department of Finance
Panelists:
Samara Karasyk, Assistant Commissioner for External Affairs New York City Department of Finance
Diana Leyden, Esq., New York City Taxpayer Advocate New York City Department of Finance, Office of the Taxpayer Advocate
Zal Kumar, Esq., Director, Office of Taxpayer Services New York City Department of Finance
Leslie Zimmerman, Assistant Commissioner for Payment Services New York City Department of Finance
3:00 - 3:15 BREAK
3:15 - 3:45 COMING INTO COMPLIANCE: REPRESENTING TAXPAYERS IN VOLUNTARY DISCLOSURE PROGRAMS
Representing non-filers and others who wish to come into compliance raises a number of practical and ethical considerations for practitioners. This panel will address factors to consider when counseling clients to come forward.
Moderator:
Kate Trachtenberg, Esq., Deputy Director New York City Department of Finance, Office of Legal Affairs
Panelists:
Sam Blaize, Director, Voluntary Disclosure Compliance Program New York City Department of Finance
David Schmutter, Esq. Ernst & Young
6 Barry Horowitz Withum Smith & Brown, P.C.
3:45 - 4:45 CASE STUDIES: THE APPLICATION AND IMPACT OF RECENT COURT DECISIONS
Leading New York City and State tax experts will present recent court decisions affecting state and local tax law and discuss how these important decisions are being interpreted and applied.
Moderator:
Glenn Newman, Esq., Greenberg Taurig, LLP - Past President, New York City Tax Appeals Tribunal and New York City Tax Commission
Panelists:
John Mulligan, Senior Tax Counsel, Office of Legal Affairs New York City Department of Finance
Tim Noonan, Esq. Hodgson Russ, LLP.
Amy Nogid, Esq. Sutherland Asbill & Brennan, LLP
4:45 - 5:00 CLOSING REMARKS
Commissioner Jacques Jiha, Ph.D. Commissioner, New York City Department of Finance
Kathryn Wylde, CEO and President The Partnership for New York City
5:00 - 6:30 WINE AND CHEESE RECEPTION
7
KEYNOTE SPEAKERS
Jacques Jiha, Ph.D., Commissioner of Finance for New York City
Jacques Jiha is the New York City Commissioner of Finance, in charge of administering the City’s tax and revenue laws, collecting $33 billion in revenue and valuing more than one million properties worth about $1 trillion. He oversees the City’s treasury, advises the Mayor on the City’s $160 billion pension system and $15 billion deferred compensation plan, and serves as trustee of the New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, the New York City Police Pension Fund and the New York City Fire Department Pension Fund. He also oversees the Sheriff Department that acts as the City's chief civil law enforcement officer, and serves on a number of government boards, including the New York City Taxi & Limousine Commission, the New York City Housing Development Corporation and the Banking Commission.
Before being named Commissioner, Mr. Jiha was the Executive Vice President/Chief Operating Officer & Chief Financial Officer of Earl G. Graves, Ltd., a multi-media company with properties in print, digital media, television, events and the Internet. Previously, he served as Deputy Comptroller for Pension Investment and Public Finance in the Office of the New York State Comptroller. As the state’s chief investment officer, he managed the assets of the New York State Common Retirement Fund – then the nation’s second-largest pension fund valued at $120 billion. He also oversaw the New York State’s College Savings Program and short-term investment pool. He had decision-making responsibilities in all aspects of investment strategy, including asset allocation, as well as investment program in domestic and international equity, fixed income, real estate and private equity. His role also included oversight responsibility of investment operations, including management of a professional investment staff, external investment managers, private-equity and real estate general partners and investment consultants.
In the public finance arena, Mr. Jiha was in charge of all activities related to the issuance of New York State general obligation bonds, bond anticipation notes, tax and revenue anticipation notes and certificates of participation. In addition, he reviewed and approved the terms and conditions of all private or negotiated sales of bonds undertaken by public authorities and localities throughout the state of New York. Mr. Jiha was also the Co-Executive Director of the New York State Local Government Assistance Corporation (LGAC). In that capacity, he managed all aspects of LGAC operations, including the refunding bonds, the ratification of swaps agreements and the selection of financial advisors and auditors.
Mr. Jiha previously served as Nassau County Deputy Comptroller for Audits and Finances, in charge of monitoring and auditing all aspects of the county’s budget and finances, including the Nassau County Health Care Corporation and Nassau Community College. Prior to this appointment, he worked for the New York City Office of the Comptroller in increasingly responsible positions: first as Chief Economist and later as Deputy Comptroller for Budget, with oversight responsibilities over the city’s operating budget and four-year capital plan. Mr. Jiha also served as Executive Director of the Legislative Tax Study
9 Commission of New York State and as Principal Economist for the New York State Assembly Committee on Ways and Means.
A staunch advocate of public service, Mr. Jiha served on a number of government and not-for-profit boards. He was a board member of the Ronald McDonald House of New York, a board member of Public Health Solutions and a trustee of the Public Health Solutions Retirement Trust, a member of the Investment Advisory Committee of the New York Common Retirement Fund, and he was also the Secretary of the board of the New York State Dormitory Authority – one the largest issuers of municipal debt in the country on behalf of public and private universities and medical institutions, and the State of New York. He also served on the board of the Haitian American United for Progress, the National Coalition for Haitian Refugees, the Haitian Times and the Haitian Roundtable.
Mr. Jiha holds a Ph.D. and a master’s degree in economics from The New School for Social Research and a bachelor’s degree in Economics from Fordham University. He served as an adjunct professor of macroeconomics at the New School’s Robert J. Milano Graduate School of Management and Urban Policy, and as an adjunct professor of economics and statistics at the Long Island University. He is the author and co-author of many academic papers, including “A Note on Inflation in Haiti: Evidence from Co-integration Analysis” in Social and Economic Studies, March 1995; “The Growth and Stability Trade Off: An Application of the Markowitz Portfolio Theory to the New York City Employment Mix” in Research in Public Policy Analysis and Management (JAI Press, 1998); and “Misguided Policies and Economic Underdevelopment: A Case Study of Haiti, 1970-89,” Papers on Latin America # 41, The Institute of Latin American and Iberian Studies: Columbia University, 1996.
A frequent public speaker, Mr. Jiha has been quoted extensively in the Economist, The New York Times, The New York Daily News, The New York Post, New York Newsday, Crain’s New York Business and the Bond Buyers. He is listed in Who’s Who in the World, Who’s Who in America, and in Who’s Who in Finance and Industry. He is one of the 2014 Honorees of the Carnegie Corporation of New York’s “Immigrants: The Pride of America.” He is also the recipient of numerous awards and honors for his achievements, leadership, and community services, including Manhattan Borough President Special Recognition Award, the Vice Chancellor’s Achievement Award from the American Foundation for the University of the West Indies, the Outstanding Achievement Award from The Haitian American Alliance and the Haitian American United for Progress Achievement Award.
10 Jerry Boone, Commissioner of Finance for New York State
Jerry Boone was confirmed as the New York State Commissioner of Taxation and Finance on June 16, 2015. Commissioner Boone brings to the Tax Department a distinguished career in government and business, complemented by a passion for executive leadership and workforce management.
Most recently, Mr. Boone served for three years as President of the New York State Civil Service Commission and Commissioner of the Department of Civil Service. There he oversaw merit administration, civil service workforce policy, and health benefits for the 153,000-person New York State executive workforce.
Mr. Boone's career in New York State government began in the Attorney General's Office as an Assistant Attorney General handling a wide range of litigation. He went on to lead real estate transactions and litigation in the Real Property Bureau, and ultimately was appointed Solicitor General — the State's chief appellate lawyer, litigation manager, and public finance bond counsel.
In the private sector, Mr. Boone was corporate in-house counsel and risk compliance officer in a leading gaming and hospitality company. He was involved in many facets of the gaming industry, including private-public partnerships for workforce development, economic development investment, and incubators for small business start-up. His operations experience included leading casino operations for the largest casino in Louisiana, and workforce management and internal communications for a Fortune 500 gaming and hospitality company of 85,000 employees.
Mr. Boone also has a background in creating affordable housing for first-time homebuyers and tenants. His company focused on the acquisition and rehabilitation of distressed properties to develop quality, affordable housing for sale or rental to lower- to middle-income households.
Mr. Boone earned a B.A. from Columbia University and a law degree from Boston College Law School. He resides in Rensselaer County with his wife, Dr. Janice Pride-Boone. They have two adult sons and a teenage daughter.
11 Nina Olson, the National Taxpayer Advocate (NTA)
Nina E. Olson, the National Taxpayer Advocate (NTA), is the voice of the taxpayer within the IRS and before Congress. She leads the Taxpayer Advocate Service (TAS), an independent organization inside the IRS that helps taxpayers resolve problems and works for systemic change to mitigate problems experienced by groups of taxpayers.
Throughout her career, Ms. Olson has advocated for the rights of taxpayers and for greater fairness and less complexity in the tax system. In calling for fundamental reform in 2012, she wrote, “A simpler, more transparent tax code will substantially reduce the estimated 6.1 billion hours and $168 billion that taxpayers spend on return preparation” and “reduce the likelihood that sophisticated taxpayers can exploit arcane provisions to avoid paying their fair share of tax.”
Ms. Olson was appointed to the position of National Taxpayer Advocate in January 2001. Under her leadership, the NTA’s Annual Report to Congress has become an important vehicle for change. It is one of two reports the NTA is required by statute to deliver each year, and outlines the most serious problems facing taxpayers. The IRS has implemented hundreds of recommendations she has made for administrative change. Members of Congress have introduced bills to implement dozens of her recommendations for legislative change, and 15 of them have been enacted into law. In June 2014, the IRS adopted the Taxpayer Bill of Rights for which Ms. Olson had long advocated, grouping dozens of existing rights in the Internal Revenue Code into ten broad categories of rights, thereby making them clear, understandable, and accessible for taxpayers and IRS employees alike.
Ms. Olson is a member of the American College of Tax Counsel and delivered the group's prestigious Griswold Lecture in January 2010. More recently, she gave the 2013 Woodworth Lecture, sponsored by Pettit College of Law at Ohio Northern University. The non-profit Tax Foundation selected her to receive its Public Sector Distinguished Service Award in 2007. Money magazine named her one of 12 "Class Acts of 2004," and Accounting Today magazine has named her one of its Top 100 Most Influential People in the accounting profession each year since 2004.
Prior to her appointment as the NTA, Ms. Olson founded and served as Executive Director of The Community Tax Law Project, the first independent § 501(c)(3) low-income taxpayer clinic in the United States. From 1975 until 1991, she owned a tax planning and preparation firm in Chapel Hill, North Carolina.
An attorney licensed in Virginia and North Carolina, Ms. Olson served as the chair of the American Bar Association (ABA) Section of Taxation’s Low Income Taxpayers Committee as well as the Pro Se/Pro
12 Bono Task Force of the ABA Section of Taxation's Court Procedure Committee. She is the 1999 recipient of both the Virginia Bar Association's Pro Bono Publico Award and the City of Richmond Bar Association's Pro Bono Award. Ms. Olson graduated from Bryn Mawr College, cum laude, with an A.B. in Fine Arts. She received her J.D., cum laude, from North Carolina Central School of Law and her Master of Laws in Taxation, with distinction, from Georgetown University Law Center. Ms. Olson has served as an adjunct professor at several law schools.
13 Kathryn Wylde, President & CEO of the Partnership for New York City
Kathryn Wylde is President and CEO of the nonprofit Partnership for New York City, the City’s leading business organization. Its mission is to work with government, labor, and the civic sector to build a stronger New York, with a focus on education, infrastructure and the economy.
Prior to taking over the Partnership presidency in 2001, Ms. Wylde was the founding CEO of both the Partnership’s housing and investment fund affiliates. She was responsible for developing and managing affordable housing and economic development programs that contributed to the renaissance of blighted urban neighborhoods across the five boroughs. With the investment fund, she developed a network of business leaders and investors that nurtured the growth of the city’s “innovation economy,” creating thousands of jobs and promoting entrepreneurial business initiatives across the five boroughs.
During her tenure as CEO, the Partnership has played a prominent role in advocacy for mayoral control of the public school system and other education reforms, blueprints for new city and state economic development policies and programs, economic analyses that guided the city’s recovery from the terrorist attacks of September 11, 2001, support for expanded investment in mass transit, and reforms of state fiscal and tax policies.
Ms. Wylde is an internationally known expert in housing, economic development and urban policy. She has received honorary degrees from Fordham University and St. Francis College and serves on a number of boards and advisory groups, including NYC Economic Development Corporation, NYC & Company, The Fund for Public Schools, US Trust Advisory Committee, the Manhattan Institute, the Lutheran Medical Center, the Governor’s NYC Regional Economic Development Council and the Council of Urban Professionals. She has authored numerous articles and policy papers and has been recognized for her leadership by dozens of educational, professional and nonprofit institutions.
Prior to joining the Partnership, Ms. Wylde worked in senior positions at the former Anchor Savings Bank and at Lutheran Medical Center in Sunset Park, Brooklyn. Ms. Wylde is a native of Madison, Wisconsin, a graduate of St. Olaf College,’68, and resides in Brooklyn, New York.
14
MODERATORS & PANELISTS
Diana Beinart, Esq. Diana Beinart is the Deputy Commissioner/General Counsel for the New York City Department of Finance. She is an experienced tax lawyer and CPA, who before her public sector career, represented individuals charged with tax crimes in Federal courts and resolved tax controversies and audits before the Internal Revenue Service and the District of Columbia Department of Tax and Revenue. Diana was also a prosecutor in the Department of Justice Tax Division where she led grand jury investigations and tried individuals charged with tax crimes and conspiracies. In her last position, Diana served as Special Assistant to the President and as an Associate Counsel in the White House Counsel’s Office, where she managed the White House vetting process for all Senate-confirmed presidential appointments, including cabinet secretaries, ambassadors, and Supreme Court Justices. She was also the President’s sole tax counsel representing the Executive Office of the President in legal and tax policy issues with the Office of Management and Budget, the Office of the Vice President, the Department of Treasury, the Internal Revenue Service, the Department of Justice, and other federal agencies. Diana graduated magna cum laude from the University of Maryland College Park with a Bachelor of Science in Accounting, and from Columbia University School of Law where she was a Harlan Fiske Stone Scholar.
Cesar Bencosme Having spent more than 20 years practicing accounting in New York State and local tax areas, Cesar Bencosme is the Assistant Commissioner for the Tax Audit & Enforcement Division of the New York City Department of Finance. He currently oversees the management and directing of audit units responsible for conducting audits of multiple tax types. Prior to joining the Department, Cesar held various positions both in corporate and public accounting firms. He is a graduate of Lehman College and Baruch College, and is a member of both the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants.
Samuel Blaize Samuel Blaize has been with the New York City Department of Finance for 31 years, starting as a field auditor in the Unincorporated Business Tax Unit. He now serves as Senior Director in the Quality Analysis Group, which oversees the Voluntary Disclosure and Compliance Program. The unit also handles office audits of various tax types, filers and non-filers of Federal/State changes and delinquencies. Sam received both his B.S. and M.A. in Accounting from Brooklyn College.
Andrew Eisner Andrew Eisner joined the New York City Department of Finance in 1983 and is now the Director of the Tax Law Division in Legal Affairs responsible for the drafting of legislation, regulations and letter rulings as well as other forms of guidance relating to the New York City Business and Excise taxes. Andrew received his J.D. and LL.M in Taxation from New York University School of Law.
Peter L. Faber Peter L. Faber is a partner in the New York office of the law firm of McDermott, Will & Emery LLP, specializing in state and local tax matters, including planning, administrative proceedings, and litigation. Peter’s state and local tax practice has included tax planning for corporate acquisitions divestitures, and restructurings; combined reporting; electronic commerce nexus issues; cloud company issues; residence matters; alternative apportionments issues; and a variety of other matters. He has litigated many cases
16 before state and local administrative agencies and courts and has represented companies and industry groups in legislative and regulatory matters. He is a member of the firm’s State and Local Tax Practice Group, that includes state and local tax specialists around the country and that, among other matters, successfully represented the taxpayers in the landmark Quill, and ASARCO, Woolworth matters before the United States Supreme Court. Peter has served as Chairman of the American Bar Association Section of Taxation and is a member of the Section’s Committee on State and Local Taxes. He is former Chairman of the New York State Bar Association Tax Section. Peter has served as a member of the Governor’s Council on Fiscal and Economic Priorities and as Chairman of the New York City Partnership’s Committee on Taxation and Public revenue. He served on the Board of Directors of the Partnership. He has served on the New York State Tax Reform Commission, the Governor’s Temporary Commission to Review the New York Sales and Use Tax Laws, and the New York State Legislature’s Tax Study Commission’s Policy and Advisory Group. He currently serves as a member of the Advisory Committees of the New York State Tax Appeals Tribunal, the New York City Tax Appeals Tribunal, the New York State Department of Taxation and Finance and the New York City Department of Finance. Peter has lectured on state and local taxation at the Georgetown University Institute on State and Local Taxation, the National Institute on State and Local taxation, the Committee on State Taxation (COST), the Hartman State and Local Tax Forum, the National Tax Association, The NYU Annual Institute on State and Local Taxation, the National Conference of State Tax Judges, the Multistate Tax Commission, and before many other professional groups. He is a member of the Advisory Committees of the Georgetown and NYU Institutes. He is the author of many articles on state and local taxation. Peter practiced law in Rochester for many years as a partner in Harter Secrest & Emery. Among other activities, he was a member of the Board of Rochester Area Chamber of Commerce and President of the Rochester Philharmonic Orchestra. Peter graduated from Swarthmore College with high honors and from Harvard Law School, cum laude.
Richard W. Genetelli Richard W. Genetelli founded the state and local tax consulting firm The Genetelli Consulting Group in 1991 after a 20-year career with Coopers & Lybrand (now PwC), 10 of which were as a partner. A member of New York State Society, American Institute of Certified Public Accountants, the New York Chamber of Commerce and Wall Street Tax Association, Richard also serves on the advisory boards of New York University, Bloomberg BNA Tax Management Inc. Multistate Tax Portfolio Series, Multistate Tax Analyst and the Journal of State Taxation. The author of numerous articles regarding state and local taxes for outlets such as Bloomberg BNA, the Financial Executive and Payroll Exchange, Richard regularly co-chairs the New York University School of Continuing and Professional Studies Institute on State and Local Taxation and has received a number of distinctions and honors including the Outstanding Achievement in State and Local Taxation Award from New York University (2011), the Franklin C. Latcham Award for Distinguished Service in State and Local Tax from BNA Tax & Accounting (2010), and the 25-Year Service Award from Pace University (2010). Richard is qualified as an expert witness and testifies on behalf of taxpayers litigating state and local tax issues throughout the country. A professor of graduate and undergraduate courses at the Pace University Lubin School of Business, he is also a frequent lecturer on state and local taxes throughout the country.
17 Michael H. Goldsmith, Esq. A practicing tax consultant for more than 20 years, Michael H. Goldsmith was promoted to State and Local Tax principal of Ernst & Young LLP in 2001 and assumed the role of Northeast Region State and Local Tax Services Leader in 2009. As a specialist in this area, his multi-state experience covers a broad range of industries including manufacturing, professional services, financial services and technology. He also has extensive experience in the controversies area representing both high-net-worth individuals and corporations before various state taxing authorities and litigating before the California Franchise Tax Board, New York State Division of Tax Appeals, Florida Administrative Law Judge Unit and Pennsylvania Board of Appeals. Michael has authored several articles on state taxation for outlets that include, State Tax Notes and New York Law Journal. Additionally, he has spoken at TEI’s Northeast regional meeting in New Jersey. He is a former board member of Think or Swim NVESTools and currently serves on the Board of Directors of The Moriah School in Englewood, New Jersey. Michael is a graduate of Queens College and received his J.D. from St. John’s University School of Law and received his LL.M. in Taxation from New York University School of Law
Ellen Hoffman, Esq. Ellen Hoffman was appointed President of the Tax Commission and Tax Appeals Tribunal in August 2015. She also serves as Director of the Office of Administrative Tax Appeals, the umbrella agency comprising the Tax Commission and Tax Appeals Tribunal. Appointed as a Commissioner of the New York City Tax Appeals Tribunal in 2005, she also spent 16 years with the New York City Department of Finance Office of Legal Affairs. As Assistant Commissioner for Tax Law and Conciliations, Ellen oversaw private rulings, regulations, forms review and development and legislative drafting as well as the Department of Finance Conciliation Bureau. Prior to joining the Department of Finance, she spent 11 years in private tax practice in New York City. She holds a J.D. and LL.M in Taxation from New York University School of Law.
Barry H. Horowitz A CPA with more than 30 years of professional accounting experience, Barry Horowitz is located in WithumSmith+Brown’s New York office and is the Team Leader of the firm’s Tax Services State and Local Tax Team. Barry advises clients in residency and nexus issues, entity level taxes, sales and use taxes, and other business and personal tax matters. He also counsels clients in strategic planning, transaction reviews, risk assessment, tax law compliance and corporate restructuring. Barry received his B.B.A. with honors in Accounting and his M.S. degree in Taxation from Baruch College, New York City. As an active member of the New York and New Jersey State Societies of Certified Public Accountants, Barry often lectures and leads learning sessions on key state and local tax issues to local chapters and other organizations, including Baruch College and C.W. Post College of Long Island University. He is a current member of the NYSSCPA’s Multistate & Local Taxation Committee and served as chairman in prior years. He is also a member of the NJSCPA's New Jersey Tax Committee. Prior to joining WS+B, Barry was a partner with EisnerLubin, LLP.
Michael Hyman Michael Hyman has served as the First Deputy Commissioner of the New York City Department of Finance since January 2015. He has been with the Department since 1988 and has served as Deputy Commissioner for the Tax Policy & Planning Division, which included the Offices of Tax Audit, Property
18 Valuation and Tax Policy, and as Deputy Commissioner for Tax Audit, Policy and Enforcement. Michael has been involved in major tax reform projects for the City of New York, including NYC’s 2015 corporate tax reform legislation. He has also been a lead manager in the introduction of data-based strategies for tax audit and property valuation work conducted by the Agency and has made numerous presentations on tax policy and tax administration issues to groups such as the Federation of Tax Administrators, the Multi-State Tax Commission, the Partnership for New York City, the United States Conference of Mayors, the New York State Bar Association, the New York City Bar Association and similar groups. Prior to joining the Department of Finance, Michael was an academic and wrote on historical topics involving U.S. public policy issues, including tax policy. He has a Ph.D. in History from the Graduate Center of the City University of New York.
Maria T. Jones, Esq. A partner at Kramer Levin Naftalis & Frankel LLP, Maria T. Jones is a leading practitioner in the field of state and local tax matters and heads the firm’s state and local tax practice, advising corporate clients, banks and financial service business in multistate planning and in areas that include combination, allocation, sourcing and classification of income among states, treatment of losses, taxability of activities, questions of nexus and application of the Commerce Clause of the U.S. Constitution to state and local taxes. In addition, she advises high-net-worth individuals on issues relating to state of domicile or residence for tax purposes, allocation and characterization of income, and appraisal of charitable donations. Prior to moving into private practice, Maria was appointed Commissioner of the New York State Tax Appeals Tribunal by Governor Mario Cuomo in 1989. As one of the original Commissioners to adjudicate taxpayer disputes, she helped craft many of the legal interpretations now being applied in the state tax area. Before serving on the Tribunal, she was Deputy Commissioner for Legal Affairs for the New York City Department of Finance, where she advised the Commissioner on legal and policy issues and supervised a staff of 30 attorneys. She has received numerous honors and distinctions, including being elected a Fellow of the American College of Tax Counsel in 2014. Both Chambers USA and Legal 500 have repeatedly ranked her as a leading practitioner. In 2015, Chambers designated her in Band 2 for Tax (New York) and International Tax Review designated her as a leading advisor for tax controversy. Best Lawyers in America named her Lawyer of the Year for Litigation and Controversy in Tax. Turnarounds & Workouts listed her on their "Bankruptcy Tax Specialists in the Nation’s Major Law Firms" (2011-2014). She was also named as one of New York’s "Women Leaders in the Law" in 2013; and Avenue magazine’s "Top Women Lawyers” in 2011.
Samara Karasyk Samara Karasyk is the Assistant Commissioner of External Affairs for the New York City Department of Finance and has served in this role since August 2011. Prior to joining the Agency, she worked at the New York City Department of Transportation, the NYC Taxi & Limousine Commission, and the New York City Department of Parks & Recreation. Earlier in her career, Samara taught 3rd grade in Bogota, Colombia at a bilingual private school before joining City service, where she has developed a passion for helping New Yorkers navigate government services and programs. She holds a B.A. in International Relations and Hispanic Studies from Brown University and a Master of Public Administration from Columbia University’s School of International and Public Affairs. She loves living in Brooklyn with her family and considers herself extremely fortunate that her commute is a daily walk over the Brooklyn Bridge.
19 Zal Kumar, Esq. Zal Kumar is the inaugural Director of Taxpayer Services for the New York City Department of Finance. In this capacity, he is responsible for supporting special legislative, regulatory and compliance initiatives as well as drafting and publishing technical memoranda, notices, publications, and audit policies and procedures. He also maintains the channel of communications with practitioners regarding the application of the City’s business income and excise taxes. In addition, Zal was a principal drafter of New York City’s 2015 corporate tax reform legislation. Prior to joining the Department of Finance, in 2013, as the Senior Counsel for the Audit Division, he was an attorney in private practice. Zal is a graduate of Vanderbilt University, where he received a Bachelor of Arts. He received his J.D. from George Washington University Law School and a Master of Laws from New York University School of Law.
Harry Leonard, Esq. A tax practitioner with more than 30 years of corporate and professional services experience, Harry Leonard was appointed Deputy Commissioner of Tax Audit & Enforcement for the New York City Department of Finance January 2015. He previously was Assistant Commissioner of The Office of Tax Audit. For a significant part of Harry’s career his expertise has focused on state and local taxes, particularly multi-state strategic planning, mergers and acquisitions, audit defense and financial accounting. Harry served in various senior tax capacities at Prudential Securities, Inc., Deloitte & Touche, and a major commodities and financial instrument trading house, The Mocatta Group, Inc. before joining Citigroup, Inc. in 2001 as deputy tax director for state and local taxes, where he was involved in major acquisitions, dispositions, entity reorganizations, major audit settlements, representing Citigroup in strategic legislative matters in all states. By 2007, Harry was employed as state and local tax principal managing director at Bear Stearns, Inc. and its successor, JP Morgan/Chase, directing their state and local tax efforts. Before joining New York City government, Harry was a New York partner in the consultative tax practice of Alvarez & Marsal LLC, focused on bankruptcy and multi-state planning. He has had senior leadership roles in the Securities Industry Association, as well as in the New York Bankers Association, The Business Council of New York State, Inc., the Partnership for New York City, and the Council on State Taxation. He has also served as President of the Board of Education of the Lynbrook Union Free School District and other civic and charitable organizations.
Diana Leyden, Esq. Diana Leyden joined the New York City Department of Finance to open and head the Office of the Taxpayer Advocate in July 2015. Her career in tax law began right after receiving her J.D. from University of Connecticut School of Law, when she served as a law clerk to The Hon. Herbert Chabot at the United States Tax Court. She later practiced corporate and tax exempt tax law with Steptoe & Johnson, LLP in Washington, D.C., as well as Powers & Hall and Day Pitney LLP, both in Boston, Massachusetts. In 1988, she took a position as an appeals officer and then as an appeals bureau manager in the Massachusetts Department of Revenue. After that, she worked as a staff attorney in the Connecticut Department of Revenue Services. Diana later, through a grant, created a low-income Taxpayer Clinic at University of Connecticut School of Law, which she ran for 16 years. In 2005, she was awarded the American Bar Association Section of Taxation Janet Spragens Pro Bono Award for her work on behalf of low-income taxpayers. Diana received a B.A. from Union College, and holds a Master of Laws from Georgetown University Law Center.
20 Deborah Liebman, Esq. Deborah Liebman is Deputy Counsel in the Office of Counsel of the New York State Department of Taxation and Finance overseeing services for Legislation and Guidance, which include drafting legislation, budget bills and departmental proposals, responding to requests for legal advice from other divisions of the Department and governmental agencies, and preparing the advisory opinions requested by taxpayers. A graduate of Albany Law School and Binghamton University, Deborah is the recipient of the New York State Bar Association’s prestigious Excellence in Public Service award.
John Mulligan, Esq. With professional experience that extends to public service and private practice, John Mulligan has been with the Legal Affairs Division of the New York City Department of Finance for more than 15 years. He is currently a Senior Tax Counsel. In this position John writes Department of Finance letter rulings and is involved with the drafting of Department rules, finance memoranda, and statements of audit procedure as well as legislation involving the Agency. He also represents the Agency in conciliation proceedings before the Department of Finance’s Conciliation Bureau. Early is his legal career, John served as a law clerk to the Honorable Stewart F. Hancock, Jr., Associate Judge of the New York Court of Appeals, where he was also an attorney with the Central Legal research staff. John received his J.D. from Pace University School of Law in 1988, his LL.M in Taxation from New York University School of Law in 1999 and was admitted to the New York Bar in 1988.
Glenn Newman, Esq. Until his appointment as president of the Tax Commission, Glenn Newman was a partner in a tax law firm where he handled tax planning and matters involving state and local taxes, including personal income tax, corporate tax, sales tax and real property transfer taxes. He had already served as Deputy Commissioner for Audit & Enforcement at the New York City Department of Finance where he was responsible for developing tax policy and managing all aspects of the audit process, and was chief of the Tax and Bankruptcy Division in the Office of the Corporation Counsel of the City of New York where he drafted legislation and regulations and litigated matters involving both New York City and State taxes in administrative proceedings and in the courts. Glenn also handled scores of cases involving City taxes in federal courts, including the U.S. Bankruptcy Courts. A member of the Commissioners’ Advisory Panels for both the New York State and City tax departments, Glenn also served as chair of the State and Local Tax Committee of the Association of the Bar of the City of New York from 1999 to 2001. He wrote a regular column on New York tax appeals for the New York Law Journal from1996 to 2002, and is co- author of the New York Sales Tax Portfolio, published by the Bureau of National Affairs. In 2003, Glenn was appointed the inaugural President of the New York City Tax Appeals Tribunal, the body that reviews the City’s non-property tax determinations. He received the honor of “Tax Judge of the Year” in 2007 by the National Conference of State Tax Judges for which he became the Chair during the 2013/2014 term. In September, 2015, Glenn became a shareholder at the law firm of Greenberg Traurig in New York City. Glenn received his J.D. from Fordham University School of Law and undergraduate degree from University at Albany, State University of New York.
Amy F. Nogid, Esq. Amy Nogid focuses all on stages of state and local tax – from multistate tax planning and restructuring through voluntary disclosures, as well as in audit defense, settlement and litigation as Counsel for
21 Sutherland. She advocates for clients, ranging from Fortune 500 companies to startups involved in emerging technologies at the administrative, trial and appellate levels up to the U.S. Supreme Court. Her areas of tax expertise include income, franchise, sales and use, excise and other transaction-based taxes, with in-depth understanding of nexus (economic, affiliate and attributional), addback statutes, apportionment and sales tax issues related to emerging industries. She also advises industry-leading clients across the country in unclaimed property matters, such as the treatment of virtual payables, gift cards, un-cashed rebates and payroll cards. Her previous experience includes working as an assistant chief in the Tax and Bankruptcy Division of the New York City Law Department. Amy received her B.A. from Queens College, her J.D. from New York Law School and her LL.M from New York University School of Law.
Timothy P. Noonan, Esq. A partner at Hodgson Russ LLP, Timothy P. Noonan heads the New York State Residency Practice for the firm and is one of the leading practitioners in the area of state and local tax. His area of specialty is New York State and New York City tax litigation and controversy, in which he has handled some of the most high-profile residency cases in New York over the past decade, including a 2014 win in the Gaied v New York State Tax Appeals Tribunal case – one of the first New York Residency cases to ever reach New York’s highest court. Over the past 16 years, Timothy has handled more than 700 personal income, sales, corporate, and other New York tax audits. He has also handled approximately 100 cases in New York’s Division of Tax Appeals. Timothy is a recognized speaker and author who has written over 100 articles contributing to several tax publications including the American Bar Association’s Sales and Use Tax Deskbook; the New York Sales Tax Guide, published by Practical Law; the corporate apportionment chapter in Thomson Reuters’ Checkpoint Analyst; and the New York chapter of LexisNexis’s Practice Insights. Timothy co-authored the 2014 edition of the CCH Residency and Allocation Audit Handbook and Contesting New York Tax Assessments, Fourth Edition, published by the New York State Bar Association and is often quoted by media outlets such as the Wall Street Journal, New York Times, and Forbes. His blog Noonan’s Notes Blog and monthly column “Noonan’s Notes” in Tax Analysts examines developments in New York and multistate tax law. His honors include being named to the 2013 and 2014 Upstate New York Super Lawyers “Rising Stars” lists and Business First's 2009 Who's Who in Law under the Tax category.
Duncan D. Riley Duncan Riley is the Conciliation Bureau Director for the New York City Department of Finance, a position he’s held since the division’s inception in 1992. Before that, Duncan worked as Deputy Director of the Office of Technical Services in the Tax Policy Division, where he researched and responded to written and telephone inquiries from practitioners on all non-real property taxes administered by the Agency. He has also served as an Assistant Unit Manager in the Audit Training Group, in charge of classroom instruction and field training for all new audit staff in the General Corporation Tax group. Duncan holds a Bachelor of Science with high honors in Accounting and Finance from New York University.
22 Leah Samit Robinson, Esq. Leah Samit Robinson has been a partner of Sutherland Asbill & Brennan LLP since August 2014. In that role, she advises public and private corporations on state and local tax planning, policy, controversy and litigation. Nationally recognized for her advocacy in tax disputes with New York State, New York City and New Jersey, she has represented clients in a wide range of industries providing national state tax strategies for clients on a full range of tax matters including nexus, income tax apportionment and combination planning, sales tax characterization of products, audit defense, controversy and litigation. She is the author of two columns published by State Tax Notes: “The Jersey Short – Everything You Need to Know about New Jersey Tax” and “In a New York Minute,” focusing on New York City and New York State issues. Leah is a frequent speaker at events hosted by the Council on State Taxation, the Institute for Professionals in Taxation, the Tax Executives Institute and other organizations. From 2004 to 2006, Leah worked as a tax attorney with the IRS Office of Chief Counsel in New York City where she was part of the strategic trial attorney litigation team handling the largest Section 482 transfer pricing controversy in history. She received her J.D. and LL.M from Rutgers University School of Law and has been the recipient of several awards and distinctions including being selected in the “Rising Stars” category of New York Metro Super Lawyers for two consecutive years.
Lance E. Rothenberg, Esq. Lance E. Rothenberg is a Senior Associate with Hodgson Russ LLP with a focus in state and local tax controversy and planning. His experience includes assisting small and mid-size businesses as well as Fortune 100 companies and high-net-worth individuals facing a wide range of New York and multistate tax issues, including corporate income and franchise tax, sales and use tax, and personal income tax and residency audit issues. Lance represents clients in all phases of administrative audit and appeal, in collection proceedings, in voluntary disclosure matters, and in litigation in administrative and state courts. The author of numerous articles, Lance is also a frequent speaker on state and local tax topics and has received several honors of distinction including being listed as one of New York Metro Super Lawyers “Rising Stars” and receiving the Lura E. Turley Award for outstanding publication in American University Law Review. Lance received his undergraduate degree from George Washington University, a J.D. from American University’s Washington College of Law, and an LL.M from New York University School of Law.
David Schmutter, Esq. David Schmutter is an Executive Director of Ernst & Young, LLP primarily in the New York metropolitan area. He has more than 30 years of public accounting experience working for regional and global firms and now provides a broad range of state and local tax client services such as tax research, due diligence, and planning to reduce the tax impact on various transactions such as business acquisitions and dispositions, expansions and relocations. In addition, he has represented numerous clients before various state and local taxing authorities for corporate income, personal income, and sales and use tax purposes. David has spoken at various conferences, was an adjunct professor at Fordham University's Masters of Tax program, and has been a contributor to publications that include the BNA Tax Management Weekly State Tax Report, The Secured Lender, Internet Tax Advisor, Bottom Line Business, Tax Hotline, Corporation Taxation Monthly, and others. David has an LL.M in Tax from New York University School of Law, a J.D. from New York Law School, a B.S. in accounting from Syracuse University, and is a New York State Certified Public Accountant.
23 Jeffrey Shear Jeffrey Shear has established an extensive career serving the City of New York for 30 years in operations management and currently serving as the Deputy Commissioner of Treasury and Payment Services for New York City Department of Finance since September 2014. He is responsible for overseeing the Department’s Adjudications, Citywide Payments & Receivables Services, Collections, Land Records, Payment Operations and Treasury divisions. Jeffrey began his career in local government with the Department of Finance in 1985, working for the Audit and Enforcement Division. He also served as Chief of Staff to First Deputy Commissioner and as Deputy Assistant Commissioner for Collections, during which time tax warrant, parking violation, and environmental control board judgments were consolidated in the Collections Division. Before rejoining the Department of Finance in 2014, Jeffrey spent 12 years with the New York City Department of Education in several positions in the Finance and Administration Division overseeing the infrastructure that supports the City’s 1,200 school buildings, including a $500 million effort to build science labs in high schools. His last position was Chief IT and Operating Officer. Jeffery also has worked with the New York City Office of Management and Budget as Assistant Director of the Education Task Force overseeing the Department of Education and City University of New York operating budget and the $11 billion five-year capital budget for new pre-K-12 school construction, renovation and IT upgrades. Jeffrey has authored articles that have appeared in the Government Finance Review. He holds a B.A. in Government from Wesleyan University and a Master in Public Policy from Harvard University's John F. Kennedy School of Government.
Kate Trachtenberg, Esq. Kate Trachtenberg came to the New York City Department of Finance as a Tax Litigator in 1992 after five years in private practice focusing on commercial litigation. She became Deputy Director of the Tax Advocacy and Resolution Unit in Legal Affairs in 1997, and continues to supervise the team of tax attorneys that represents the Department of Finance in business tax controversies at the Conciliation Bureau. Kate also serves as counsel to the Audit Division, with particular emphasis on Hotel Room Occupancy Tax, Real Property Transfer Tax and the Voluntary Disclosure and Compliance Program, and has designed and taught various courses as part of the Department of Finance’s Continuing Legal Education program. A graduate of Georgetown University Law Center, where she was a member of the founding editorial board of the Georgetown Journal of Legal Ethics, Kate also served as Law Clerk to the Chief Administrative Law Judge at the New York City Department of Housing and Urban Development.
Kenneth T. Zemsky, Esq. A Managing Director with Andersen Tax, Kenneth Zemsky specializes in multistate corporate and personal income taxes with a concentration in New York State and New York City tax law. He has more than 33 years of experience and primarily works with multistate corporate taxpayers, high-net-worth individuals, alternative investment funds and owner-operated businesses. Ken has served on several boards, including the New York State and New York City Commissioner Tax Advisory Boards, New York State and New York City Tax Appeals Tribunal Advisory Boards, Interstate Tax Press Board of Advisors, and in the position of Chairman of the State and Local Tax Committee of the New York State Society of CPAs. A prolific author of articles appearing in a number of industry publications such as the Journal of Multistate Taxation and State Tax Notes, he is also a frequent speaker at tax symposia for various organizations, including the New York University State and Local Tax Institute; Georgetown State and Local Tax Institute; New York State Bar Association Tax Section; and New York State Society
24 of CPAs State Tax Updates. Before joining Andersen Tax, Ken was a Tax Partner at Arthur Andersen and EY. He received both his BSFS and J.D. at Georgetown University.
Leslie Zimmerman As the Assistant Commissioner of Payment Operations at the New York City Department of Finance, Leslie Zimmerman is responsible for communications, billing, payment processing and account management for parking, real estate and business tax payments and filings. She manages a staff of 218 that processes between 13 and 15 million transactions in a fiscal year totaling anywhere from $26 to $29 billion. A graduate of New York City public schools and Queens College, Leslie has worked in New York City government for more than 38 years, starting as a part-time file clerk during high school. She has overseen and directed a wide array of Department of Finance operations over the years that have contributed to significant changes and developments within the agency, including parking programs and exemption application processing. More recently she has spearheaded changes that leverage technological advances in electronic payment collection specifically mortgage servicing company collections and the IRS modernized e-file program, which allows vendors to electronically file New York City business tax returns along with their electronic federal filings through the IRS. In 1999, as the Assistant Commissioner of Revenue Operations, Leslie was awarded the Lawrence Brochhausen Memorial Award, named after the late Deputy Commissioner for Operations for the Department of Finance, who initiated important reforms in New York City. The award is given annually to a manager who demonstrates the ability to motivate and inspire others, foster cooperation, innovate, facilitate change, and achieve results.
25 NYC Taxpayer Bill of Rights The Right to be Informed The Right to Finality You have the right to know how to comply with New York You have the right to know the deadline for challeng- City tax laws. You have the right to clear and simple ex- ing the Department of Finance’s position. You have planations of the laws and procedures in all of the Depart- the right to know the maximum amount of time the ment of Finance tax forms, instructions, publications, no- Department of Finance has to audit a specific tax tices and correspondence. You have the right to a clear year or collect a tax debt. You have the right to know explanation of and the reasons for a Department of Fi- the maximum amount of time you have to request a nance decision. You have a right to a copy of this NYC refund of taxes. You have the right to know when the Taxpayer Bill of Rights. Department of Finance has finished an audit. You have the right to know when and how the Department The Right to Quality Service of Finance can collect a tax that is due. You have the
You have the right to receive courteous and professional right to know that the Department of Finance’s action help in a reasonable amount of time from the Department is final. of Finance. You have the right to be spoken to in a way you can easily understand. You have the right to receive The Right to Privacy clear and understandable communications from the De- You have the right to expect that any inquiry, exami- partment of Finance. You have the right to write to and/or nation, or enforcement action by the Department of speak to a supervisor about poor service. Finance will follow the law. You have the right to ex- pect that any such action by the Department of Fi- Right to Understand How Your Property Tax is nance be no more intrusive than necessary. You also Determined have the right to expect that the Department of Fi- You have the right to understand in non-technical lan- nance will respect all due process rights, including guage how the Department of Finance calculated your search and seizure protections. property tax. You have the right to understand how the Department of Finance determines market value and as- The Right to Confidentiality sessed value. You have the right to understand the tax You have the right to expect that any information you rates and tax caps that the Department of Finance applied provide to the Department of Finance will not be in calculating your property tax. You have the right to shared with a person or organization outside of the know what property tax exemptions and/or abatements Department of Finance, unless approved by you or by you can apply for and how to apply for them. You have the law. You have the right to be notified if your infor- right to receive an explanation, in writing, why the Depart- mation is shared without your approval or sharing ment of Finance accepted, denied or removed a property was not allowed by law. You have the right to expect
tax exemption or abatement. the Department of Finance to take action against
TAXPAYER ADVOCATE TAXPAYER employees and others who wrongfully use or share The Right to a Fair and Just Tax System your information. You have the right to expect the Department of Finance to consider facts and circumstances that might affect your The Right to Challenge the Department of taxes. You have the right to be given time to provide in- Finance’s Position and Be Heard formation to support your claim. You have the right to You have the right to challenge and provide more expect that the Department of Finance will fully use any documentation to the Department of Finance. You tax laws that allow the Department of Finance to consider have the right to expect that the Department of Fi- your ability to pay should you ask for such help. You have nance will quickly and fairly review your challenge the right to receive assistance from the Taxpayer Advo- and documents. You have the right to receive, in cate if the Department of Finance has not, through its nor- writing, an explanation of why the Department of Fi- mal processes, fixed your tax issue properly within a rea- nance does not agree with your position. You have a sonable amount of time or if you believe that the Depart- right to receive a written explanation of why the De- ment of Finance is violating one of these rights. partment of Finance does not accept your docu- ments. You have the right to be told about how to The Right to Retain Representation appeal a Department of Finance decision or how to You have the right to have someone help you in your request a Conciliation Conference. You have a right dealings with the Department of Finance. If your repre- to receive a written response to your appeal or your sentative has filed a Power of Attorney, then the Depart- Conciliation Conference. You have the right to be THE OFFICE OF THE THE OF OFFICE THE ment of Finance must recognize that person as your rep- told when and how you can file a case with the Tax resentative and can share your tax information with that Commission, the Tax Appeals Tribunal and the New person York Supreme Court.
The Right to Pay No More than the Correct Amount of Tax CONTACT US You have the right to pay only the amount of tax legally due, including interest and penalties. You have the right THE OFFICE OF THE TAXPAYER ADVOCATE 253 BROADWAY 6TH FLOOR to expect the Department of Finance to apply tax pay- NEW YORK, NY 10007 ments correctly. You have a right to receive a bill or state- ment showing the amount of tax, including interest and nyc.gov/taxpayeradvocate penalties, that is due.
Taxpayer Bill of Rights (English) Rev. 10/23/2015
New York State Tax Reporter, Policy Bulletin 2-84, New York, ¶20001201143, New York City Department of Finance, (Apr. 2, 1984)
Click to open document in a browser ¶20001201143. ¶20001201143. Policy Bulletin 2-84, New York City Department of Finance, NY- TAXRPTR20001201143, April 02, 1984. Finance GENERAL CORPORATION TAX POLICY BULLETIN 2-84 The City of New York Department of Finance Municipal Building New York, N.Y. 10007 Telephone 566-2574 Philip R. Michael Commissioner of Finance RE: Interest Attributable to Subsidiary Capital I Introduction Section R46-2.0.8(a)(1) of the New York City Administrative Code provides that entire net income shall be determined by excluding: “income, gains and losses from subsidiary capital which do not include the amount of a recovery in respect of any war loss;” Section R46-2.0.8(b)(6) of the New York City Administrative Code provides that entire net income shall be determined without the subtraction of: “in the discretion of the [commissioner] of finance, any amount of interest directly or indirectly and any other amount directly attributable as a carrying charge or otherwise to subsidiary capital or to income, gains or losses from subsidiary capital;” This Bulletin presents general guidelines to be followed in determining whether an amount of interest expense will be directly or indirectly attributable to subsidiary capital and what portion will therefore be disallowed in determining entire net income. It should be noted that these are only general guidelines and not inflexibly fixed rules. The ultimate decision in each case will depend upon the facts and circumstances involved in the individual situation. II Direct Attribution Rules In determining if interest expense is directly attributable to business capital, investment capital or subsidiary capital, the purpose for which the indebtedness is incurred or continued will be the deciding factor. Taxpayers claiming a direct attribution of interest expense to business capital, investment capital or subsidiary capital must submit a listing of each asset to which interest expense is directly attributed, including the amount of such interest expense, and the nature, the date and the amount of the liability incurred to acquire the asset. In cases where it is determined that the indebtedness is incurred or continued to purchase or maintain subsidiary assets, the interest expense is not deductible. In cases where it is established that the indebtedness is incurred or continued to purchase or maintain business assets or for business purposes (and unrelated to any investments, loans or advances to subsidiary corporations), the interest is deductible. The amount of interest expense directly attributable is excluded from total interest expense; the remainder of which will be apportioned by the formula described in section III below.
©2015 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 1 The totality of the facts and circumstances will be examined in each case to determine the purpose for the indebtedness. Examples of Nondeductible Interest Directly Attributable to Subsidiary Assets: (1) The interest on indebtedness, the proceeds of which are used to buy a subsidiary, is not deductible from entire net income. (2) Interest is not deductible on indebtedness incurred to finance a separate account maintained for the sole purpose of buying and selling the stock of subsidiaries. (3) Interest is not deductible on funds borrowed by a taxpayer for relending, in whole or part, to its subsidiaries. Where only part of the borrowed funds are reloaned to subsidiaries, that part which is attributable to the money lent to subsidiaries is not deductible. Whether the remaining interest is deductible depends on the purpose of the indebtedness. Examples of Deductible Interest Directly Attributable to Non-Subsidiary Assets (1) A deduction is allowed for interest on indebtedness which is incurred or continued to acquire or improve physical business facilities (e.g., a bond and mortgage). (2) Interest is deductible on indebtedness which is incurred to finance a nonrecurring major business expense. III. Indirect Attribution Rules A. If it is not possible to isolate the assets to which interest expense is directly attributed, it will be presumed that each asset held by a corporation shares a portion of the cost of its borrowings, other liabilities and net worth. Therefore, a proportional part of a corporation's interest expense on borrowings is attributable to subsidiary capital and is properly disallowed in determining entire net income. The relationship of the corporation's investment in subsidiary capital to its total assets determines the portion of interest expense indirectly related to subsidiary capital and income. The formula to determine interest expense indirectly attributable to subsidiary capital is: City of New York, Department of Finance POLICY BULLETIN 2-84B Total Interest Expense × Investment in Subsidiaries
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Total Assets B. Definitions 1. Total Interest Expense is the total interest deducted by the taxpayer in arriving at Federal taxable income less: a. 100 percent of interest expense required to be included in the computation of entire net income in accordance with Section R46-2.0.8(b)(5) of the Administrative Code (interest paid to stockholders); b. Interest expense on federal, state, or local tax deficiencies; c. Interest expense directly traceable to subsidiary capital; d. Interest expense directly traceable to business and/or investment capital. 2. Investment in Subsidiaries is the average cost of investments in the stock of the subsidiary, including contributions to capital, plus the average of any loans and advances (exclusive of accounts receivable acquired in the ordinary course of business), as defined in Section R46-2.0.3 of the Administrative Code, before the deduction of current liabilities attributable to subsidiary capital.
©2015 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 2 If total interest expense is reduced by “(1)(c)”, the subsidiary capital in the apportionment formula is reduced by an amount equal to the average liability to which interest expense is directly traced. In determining the amount of loans and advances, loans and advances to the parent by one of its subsidiaries may be offset against loans and advances to such subsidiary. At no time may loans and advances from a subsidiary reduce loans and advances from the parent to an amount lower than zero (0). Loans and advances to the parent may not be offset against capital stock or against loans and advances to any other subsidiary. 3. Total Assets are generally the average net book value of all assets, after depreciation, amortization and other charges to capital. If total interest expense is reduced by “(1) (a), (c) or (d)”, total assets in the apportionment formula are reduced by an amount equal to the average liability to which interest expense is directly traced. 4. Assets, either subsidiary or non-subsidiary, acquired through the original issue of capital stock should not be included in the formula. However, assets acquired through the issuance of treasury stock are included in the formula. IV Effective Date. This policy bulletin will be effective for all taxable years or periods open for audit. /s/ PHILIP R. MICHAEL Commissioner of Finance Promulgated: April 2, 1984
©2015 CCH Incorporated and its affiliates and licensors. All rights reserved. Subject to Terms & Conditions: http://researchhelp.cch.com/License_Agreement.htm 3 F I N A N C E DEPARTMENT OF FINANCE NEW YORK THE CITY OF NEW YORK DEPARTMENT OF FINANCE AUDIT DIVISION
PP-2008-12 03/31/08
STATEMENT OF AUDIT PROCEDURE
GCT & UBT Treatment of Repurchase Agreements and Securities Lending and Borrowing Transactions for Financial Services Firms Regularly Engaged in Such Activities.
I. Statement of the Issues – Statutory and Regulatory Background
The law governing the New York City General Corporation Tax (“GCT”) and the Unincorporated Business Tax (“UBT”) defines investment capital as “investments in stocks, bonds and other securities, corporate and governmental, not held for sale to customers in the regular course of business…” Administrative Code of the City of New York §11-602.4 and §11-501(h). Rules adopted in 1990 for purposes of the GCT elaborated on that definition, addressing among other items the treatment of repurchase agreements. Title 19 Rules of the City of New York (“RCNY”) §11-37. The 1990 rules are silent regarding the treatment of securities lending and borrowing transactions. Although the 1990 rules apply to the GCT, the Department generally applies those rules in comparable situations for purposes of the UBT.
Taxpayers are permitted to elect to treat “cash on hand or on deposit” as business or investment capital. Ad. Code §11-602.6 and §11-501(j). The 1990 rules treat qualifying corporate debt instruments that would otherwise qualify as investment capital as “cash on hand or on deposit,” subject to the cash election, if the remaining term of the instrument is six months or less or the instrument is payable on demand. 19 RCNY §11-37(a)(3). The expanded definition of cash does not expand the overall amount of investment capital a taxpayer has. However, it removes the short-term debt from the calculation of the investment allocation percentage while permitting taxpayers to allocate the income from cash (and the total investment capital that includes the cash) by the investment allocation percentage.
Section 11-602.5 of the Administrative Code defines investment income as income from investment capital less “in the discretion of the commissioner of finance, any deductions allowable in computing entire net income which are directly or indirectly attributable to investment capital or investment income” and
less a portion of the taxpayer’s net operating loss. Administrative Code section 11-501(1) contains a comparable definition for purposes of the UBT. The city rule, Title 19 RCNY section 11-69(b) definition of “Investment Income” (i)(A), reflects the exercise of that discretion by providing that “investment income must be reduced by any deductions, allowable in computing entire net income, which are directly or indirectly attributable to investment capital or investment income.”
This Statement of Audit Procedure provides guidance to auditors regarding the correct tax treatment of certain repurchase and reverse repurchase agreements and securities lending and borrowing transactions by financial services firms regularly engaged in such activities for purposes of the GCT and the UBT. This SAP is not intended to address the audit treatment of other taxpayers engaged in similar activities. The audit treatment of those taxpayers will depend upon the facts and circumstances of the taxpayers’ activities.
II. General Rules
A. As more fully described below, for financial services firms regularly engaged in both repurchase and reverse repurchase agreements, the auditor will treat reverse repurchase agreements that constitute qualified corporate debt instruments with durations of not more than six months as cash, and therefore subject to the cash election. In addition, for such taxpayers interest expenses arising out of repurchase agreements will be subject to a rebuttable presumption that such interest is directly attributable to reverse repurchase agreements. Therefore, if cash is treated as business capital; per the election, these expenses will be directly attributable to business capital; if cash is treated as investment capital, these expenses will be directly attributed to investment capital.
B. Where a financial services firm regularly engages in securities lending and borrowing transactions, the auditor will treat the income and expenses from those transactions as business income and expenses.
III. Audit Procedures
A. Repurchase Agreements
A Repurchase Agreement is a transaction in which one party sells securities, most often government securities, to a second party and simultaneously contracts to repurchase the same or equivalent securities from the second party. Existing regulations generally treat repurchase agreements as collateralized loans.1 These transactions are usually of short duration, either overnight or for a few days, and almost never have a term exceeding six months. When the transaction is treated as a loan, the seller of the securities is in the position of the borrower while the purchaser of the securities, the holder of the reverse repurchase agreement, is in the position of the lender.
1 Situations in which the transaction qualifies to be treated as an actual sale of the securities to the lender under 19 RCNY§11-37(f) are beyond the scope of this Statement of Audit Procedure.
Repurchase and reverse repurchase agreements represent a significant activity of the financial services sector. Taxpayers frequently report short-term reverse repurchase agreements as items of cash if they are otherwise qualifying corporate debt instruments2, and such agreements are usually treated as investment capital under the cash election.
1. In the audit of a financial services firm regularly engaged in repurchase and reverse repurchase transactions, the auditor will accept a taxpayer’s treatment of reverse repurchase agreements as cash subject to the cash election if the agreements otherwise qualify as qualifying corporate debt instruments.
2. On audit, the auditor will treat all interest expense incurred by the taxpayer from repurchase agreements with respect to government securities as directly attributable to reverse repurchase agreements with respect to government securities except to the extent that the taxpayer can demonstrate to the satisfaction of the auditor both (i) that the taxpayer’s activities with respect to repurchase agreements are segregated on the taxpayer’s books and records and on an operational basis from its activities with respect to reverse repurchase agreements and (ii) that the taxpayer’s entry into repurchase agreements is not related to any material degree, including as hedges, to its entry into reverse repurchase agreements, in which case, the auditor may take into account the particular facts and circumstances of the taxpayer in attributing the interest expense from repurchase agreements.
3. Compliance with this portion of the Statement of Audit Procedure does not preclude inquiry, on audit, as to whether the cash election and investment capital treatment are appropriate in a given situation.
B. Securities Lending and Borrowing Transactions
Financial services firms engage in securities lending and borrowing transactions for a variety of reasons, including: covering their own or customers’ short sales; covering failed sales by customers; obtaining securities to lend to a third party; and as a source of funds. Broker dealers lend securities from their own inventory or trading accounts. They also can use securities and cash held in customers’ margin accounts in these transactions. In general, for financial statement purposes broker dealers account for securities lending and borrowing activity the same way regardless of the source of the securities loaned or the use to which borrowed securities will be put. Broker dealers engage in a significant volume of both securities lending and securities borrowing activity.
2 Reverse repurchase agreements that are not qualifying corporate debt instruments cannot be treated as cash subject to the election. Title 19 RCNY §11-37(a)(3)
A stock loan consists of several elements: