NY State Senate Bill 2009-S3886

Senate Bill S3886

2009-2010 Legislative Session

Relates to reversing the crediting of a personal income tax or corporate franchise tax overpayment against estimated tax

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Archive: Last Bill Status Via A8175 - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 09, 2010	referred to investigations and government operations delivered to senate passed assembly
Jan 06, 2010	ordered to third reading cal.560 returned to assembly died in senate
Jul 16, 2009	committed to rules
Jun 03, 2009	3rd reading cal.433 substituted for s3886
Jan 06, 2010	referred to investigations and government operations
Jun 03, 2009	substituted by a8175
Jun 01, 2009	advanced to third reading
May 27, 2009	2nd report cal.
May 26, 2009	1st report cal.433
Apr 02, 2009	referred to investigations and government operations

co-Sponsors

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2009-S3886 (ACTIVE) - Details

See Assembly Version of this Bill:: A8175
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§686, 687, 1086 & 1087, Tax L; amd §§11-1786 & 11-1787, NYC Ad Cd

2009-S3886 (ACTIVE) - Summary

Relates to reversing the crediting of a personal income tax or corporate franchise tax overpayment against estimated tax for the succeeding taxable year in certain circumstances.

2009-S3886 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S3886

 TITLE OF BILL :

An act to amend the tax law and the administrative code of the city of
New York, in relation to reversing the crediting of a personal income
tax or corporate franchise tax overpayment against estimated tax for
the succeeding taxable year in certain circumstances

 PURPOSE :

This bill would allow a taxpayer's election to credit a personal
income tax or corporate franchise tax overpayment to estimated tax for
the succeeding taxable year to be reversed upon good cause shown by
the taxpayer.

 SUMMARY OF PROVISIONS :

Sections 1 and 3 of this bill would amend Tax Law §§ 686(e) and
1086(b) to allow taxpayers to request the reversal of the crediting of
their personal income tax or corporate franchise tax overpayment to
estimated tax for the succeeding taxable year on or before the
prescribed filing date of the return for the succeeding taxable year,
plus any extension granted. If good cause is shown, the crediting
would be reversed, and the Commissioner of Taxation and Finance
("Commissioner") may, in his or her discretion, credit the overpayment

against a liability of the taxpayer or refund the overpayment without
interest. However, the taxpayer would not be relieved of liability for
penalties for an underpayment of estimated tax caused by the reversal
of the credit. The decision of the Commissioner to grant or deny the
request would be final and would not be subject to any further
administrative or judicial review.

Sections 2, 4 and 6 of the bill would amend cross-references to Tax
Law §§ 686(e) and l086(b) and the Administrative Code of the City of
New York § 11-1786(e).

Section 5 of the bill makes corresponding amendments to the
Administrative Code of the City of New York § 11-1786(e) for the New
York City personal income tax on residents.

Section 7 provides that the bill would take effect immediately.

 EXISTING LAW :

When a taxpayer files a personal income tax or corporate franchise tax
return and has an overpayment (credits and prepayments are more than
the tax owed), an election may be made by the taxpayer to have some or
all of the overpayment refunded or credited to estimated tax for the
succeeding taxable year. Tax Law §§ 686(e) and 1086(b) and the
Administrative Code of the City of New York § 11-1786(e) provide that
if an overpayment is credited against estimated tax for the succeeding
taxable year, the amount is considered to be a payment of tax for the
succeeding taxable year and no claim for credit or refund of the
overpayment will be allowed for the taxable year for which the
overpayment arises. The Internal Revenue Service has issued a policy
statement on similar language in the Internal Revenue Code which
allows individual taxpayers to have the election reversed and the
overpayment refunded without interest upon a showing that the taxpayer
would suffer "undue financial hardship." These refund requests must be
made far enough in advance to permit a refund to be made prior to the
end of the taxable year to which the credit was applied. (IRS Policy
Statement 2-88, approved 10-21-1971, in Internal Revenue Manual
section 1.2.12.1.14.)

 LEGISLATIVE HISTORY :
This is a new bill.

 STATEMENT IN SUPPORT :

The virtually irreversible election to credit an overpayment to
estimated tax for the succeeding taxable year has at times caused
problems for taxpayers. In some cases, because of a software or return
preparation error, the overpayment was entered on the
credit-to-estimated-tax line rather than on the refund line.
Taxpayers who were expecting a refund were frustrated by the
Department's inability to correct the error. Further, a taxpayer may
become aware of another liability before the due date of the return
for the succeeding taxable year and may prefer to use the overpayment
against that liability instead of for estimated tax for the next year.
There may be other situations that would call for reversing the
crediting of an overpayment, such as a significant change in the
taxpayer's economic situation.

This bill would remedy the problem by permitting the taxpayer to
request a reversal of the crediting of the overpayment to estimated
tax. The ability to request such reversal would last until the
prescribed due date of the return for the succeeding taxable year,
plus any extensions granted the taxpayer. Once the return for the
succeeding taxable year is filed, the taxpayer will be able to request
that any overpayment on that return be refunded or credited to
estimated tax for the next succeeding taxable year. The decision to
grant or deny the request is in the discretion of the Commissioner.
The Commissioner could decide not to reverse the credits of a class of
taxpayers due to, for example, the State's fiscal circumstances. The
Commissioner's decision would not be subject to further administrative
or judicial review to promote quicker settlement of the affected tax
years.

 BUDGET IMPLICATIONS :

This bill will not have an impact on State finances.

 EFFECTIVE DATE :
This bill would take effect immediately.

2009-S3886 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3886

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              April 2, 2009
                               ___________

Introduced  by  Sens.  C. JOHNSON,  DIAZ,  DILAN, ONORATO, SAVINO -- (at
  request of the Department of Taxation and Finance) -- read  twice  and
  ordered  printed, and when printed to be committed to the Committee on
  Investigations and Government Operations

AN ACT to amend the tax law and the administrative code of the  city  of
  New  York, in relation to reversing the crediting of a personal income
  tax or corporate franchise tax overpayment against estimated  tax  for
  the succeeding taxable year in certain circumstances

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsection (e) of section 686 of the tax law, as amended by
chapter 65 of the laws of 1985, is amended to read as follows:
  (e) Credits against estimated tax.--The [tax commission]  COMMISSIONER
may  prescribe regulations providing for the crediting against the esti-
mated income tax for any taxable year of the amount determined to be  an
overpayment of the income tax for a preceding taxable year. If any over-
payment  of  income  tax is so claimed as a credit against estimated tax
for the succeeding taxable year, such amount shall be  considered  as  a
payment  of the income tax for the succeeding taxable year, and no claim
for credit or refund of such overpayment shall be allowed for the  taxa-
ble  year  for  which the overpayment arises, EXCEPT UPON REQUEST TO THE
COMMISSIONER ON OR BEFORE THE LAST DAY PRESCRIBED FOR THE FILING OF  THE
RETURN  FOR  THE  SUCCEEDING TAXABLE YEAR, DETERMINED WITH REGARD TO ANY
EXTENSION OF TIME GRANTED. IF GOOD CAUSE  IS  SHOWN  FOR  REVERSING  THE
CREDIT, THE COMMISSIONER MAY, IN HIS OR HER DISCRETION, CREDIT THE OVER-
PAYMENT  AGAINST A LIABILITY OR REFUND THE OVERPAYMENT WITHOUT INTEREST.
PROVIDED, THE PERSON WHO MADE THE OVERPAYMENT WILL NOT  BE  RELIEVED  OF
LIABILITY FOR ANY PENALTY IMPOSED FOR A CONSEQUENT UNDERPAYMENT OF ESTI-
MATED  TAX  FOR THE SUCCEEDING TAXABLE YEAR. THE DECISION OF THE COMMIS-
SIONER TO GRANT OR DENY THE REQUEST IS FINAL AND NOT SUBJECT TO  FURTHER
ADMINISTRATIVE OR JUDICIAL REVIEW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09494-01-9

S. 3886                             2

  S 2. Subsection (k) of section 687 of the tax law, as amended by chap-
ter 1014 of the laws of 1968, is amended to read as follows:
  (k)  Cross  reference.  -- For provision barring refund of overpayment
credited against tax of a succeeding year, EXCEPT FOR GOOD CAUSE  SHOWN,
see subsection (e) of section six hundred eighty-six.
  S  3. Subsection (b) of section 1086 of the tax law, as added by chap-
ter 188 of the laws of 1964, is amended to read as follows:
  (b) Credits against estimated tax.---The [tax commission] COMMISSIONER
may prescribe regulations providing for the crediting against the  esti-
mated  tax under article nine-a[, nine-b or nine-c] for any taxable year
of the amount determined to be an overpayment of tax  under  [any]  such
article  for  a  preceding taxable year. If any overpayment of tax is so
claimed as a credit against estimated tax  for  the  succeeding  taxable
year,  such  amount  shall  be  considered as a payment of the tax under
article nine-a[, nine-b or  nine-c]  for  the  succeeding  taxable  year
(whether  or not claimed as a credit in the declaration of estimated tax
for such succeeding taxable year), and no claim for credit or refund  of
such  overpayment  shall  be  allowed for the taxable year for which the
overpayment arises, EXCEPT UPON REQUEST TO THE COMMISSIONER ON OR BEFORE
THE LAST DAY PRESCRIBED FOR THE FILING OF THE RETURN FOR THE  SUCCEEDING
TAXABLE  YEAR,  DETERMINED WITH REGARD TO ANY EXTENSION OF TIME GRANTED.
IF GOOD CAUSE IS SHOWN FOR REVERSING THE CREDIT, THE  COMMISSIONER  MAY,
IN  HIS OR HER DISCRETION, CREDIT THE OVERPAYMENT AGAINST A LIABILITY OR
REFUND THE OVERPAYMENT WITHOUT INTEREST. PROVIDED, THE PERSON  WHO  MADE
THE  OVERPAYMENT  WILL  NOT  BE  RELIEVED  OF  LIABILITY FOR ANY PENALTY
IMPOSED FOR A CONSEQUENT UNDERPAYMENT OF ESTIMATED TAX FOR THE  SUCCEED-
ING  TAXABLE YEAR. THE DECISION OF THE COMMISSIONER TO GRANT OR DENY THE
REQUEST IS FINAL AND NOT SUBJECT TO FURTHER ADMINISTRATIVE  OR  JUDICIAL
REVIEW.
  S  4. Subsection (j) of section 1087 of the tax law, as added by chap-
ter 188 of the laws of 1964, is amended to read as follows:
  (j) Cross reference.--For  provision  barring  refund  of  overpayment
credited  against tax of a succeeding year, EXCEPT FOR GOOD CAUSE SHOWN,
see subsection (b) of section one thousand eighty-six.
  S 5. Subdivision (e) of section 11-1786 of the administrative code  of
the  city  of New York, such section as renumbered by chapter 639 of the
laws of 1986, is amended to read as follows:
  (e) Credits against estimated tax. The [tax  commission]  COMMISSIONER
OF  TAXATION  AND  FINANCE  may  prescribe regulations providing for the
crediting against the estimated income tax for any taxable year  of  the
amount determined to be an overpayment of the income tax for a preceding
taxable year. If any overpayment of income tax is so claimed as a credit
against estimated tax for the succeeding taxable year, such amount shall
be  considered as a payment of the income tax for the succeeding taxable
year, and no claim for credit or refund of  such  overpayment  shall  be
allowed  for  the  taxable year for which the overpayment arises, EXCEPT
UPON REQUEST TO THE COMMISSIONER OF TAXATION AND FINANCE  ON  OR  BEFORE
THE  LAST DAY PRESCRIBED FOR THE FILING OF THE RETURN FOR THE SUCCEEDING
TAXABLE YEAR, DETERMINED WITH REGARD TO ANY EXTENSION OF  TIME  GRANTED.
IF  GOOD  CAUSE  IS  SHOWN FOR REVERSING THE CREDIT, THE COMMISSIONER OF
TAXATION AND FINANCE MAY, IN HIS OR HER DISCRETION, CREDIT THE  OVERPAY-
MENT  AGAINST  A  LIABILITY  OR REFUND THE OVERPAYMENT WITHOUT INTEREST.
PROVIDED, THE PERSON WHO MADE THE OVERPAYMENT WILL NOT  BE  RELIEVED  OF
LIABILITY FOR ANY PENALTY IMPOSED FOR A CONSEQUENT UNDERPAYMENT OF ESTI-
MATED  TAX  FOR THE SUCCEEDING TAXABLE YEAR. THE DECISION OF THE COMMIS-

S. 3886                             3

SIONER OF TAXATION AND FINANCE TO GRANT OR DENY THE REQUEST IS FINAL AND
NOT SUBJECT TO FURTHER ADMINISTRATIVE OR JUDICIAL REVIEW.
  S  6. Subdivision (k) of section 11-1787 of the administrative code of
the city of New York, as amended by chapter 639 of the laws of 1986,  is
amended to read as follows:
  (k) Cross reference. For provision barring refund of overpayment cred-
ited  against tax of a succeeding year, EXCEPT FOR GOOD CAUSE SHOWN, see
subdivision (e) of section 11-1786.
  S 7. This act shall take effect immediately.

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Senate Bill S3886

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Sponsored By

Craig M. Johnson

Archive: Last Bill Status Via A8175 - In Senate Committee Investigations And Government Operations Committee

co-Sponsors

Ruben Diaz

Martin Malavé Dilan

Liz Krueger

George Onorato

2009-S3886 (ACTIVE) - Details

2009-S3886 (ACTIVE) - Summary

2009-S3886 (ACTIVE) - Sponsor Memo

2009-S3886 (ACTIVE) - Bill Text download pdf

Comments