Assembly Bill A9965

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

                                  9965

                          I N  A S S E M B L Y

                             April 27, 2012
                               ___________

Introduced by M. of A. CRESPO -- read once and referred to the Committee
  on Ways and Means

AN ACT to amend the tax law, in relation to clarifying the recordkeeping
  requirements  for the earned income tax credit and the enhanced earned
  income tax credit

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

  Section  1. Subsection (d) of section 606 of the tax law is amended by
adding a new paragraph 8 to read as follows:
  (8) RECORDKEEPING.  IN ADDITION TO ANY OTHER REQUIREMENT SET FORTH  IN
THIS  CHAPTER, ANY TAXPAYER PAID PRINCIPALLY IN CASH WHO IS CLAIMING THE
EARNED INCOME TAX CREDIT PURSUANT TO THIS SUBSECTION SHALL  COMPLY  WITH
THE   RECORDKEEPING  REQUIREMENTS  SET  FORTH  IN  SECTION  SIX  HUNDRED
FIFTY-EIGHT-A OF THIS ARTICLE WHEN APPLICABLE.
  S 2. Subsection (d-1) of section 606 of the  tax  law  is  amended  by
adding a new paragraph 9 to read as follows:
  (9)  IN  ADDITION  TO ANY OTHER REQUIREMENT SET FORTH IN THIS CHAPTER,
ANY TAXPAYER WHO IS CLAIMING  THE  ENHANCED  EARNED  INCOME  TAX  CREDIT
PURSUANT TO THIS SUBSECTION SHALL COMPLY WITH THE RECORDKEEPING REQUIRE-
MENTS  SET  FORTH  IN  SECTION SIX HUNDRED FIFTY-EIGHT-A OF THIS ARTICLE
WHEN APPLICABLE.
  S 3. The tax law is amended by adding a new section 658-a to  read  as
follows:
  S 658-A. INCOME DOCUMENTATION CONCERNING THE EARNED INCOME TAX CREDIT.
IN  CONJUNCTION  WITH  THE  REQUIREMENTS  SET FORTH IN THIS CHAPTER, THE
PROVISIONS OF THIS SECTION SHALL APPLY  TO  ANY  TAXPAYER  CLAIMING  THE
EARNED  INCOME  TAX CREDIT AS SET FORTH IN SUBSECTION (D) OF SECTION SIX
HUNDRED SIX OF THIS ARTICLE:
  (A) INCOME DOCUMENTATION STANDARDS FOR CASH EARNERS.  IF THE  TAXPAYER
IS  EMPLOYED IN ONE OR MORE JOBS WHERE SUCH TAXPAYER IS PAID PRINCIPALLY
IN CASH, SUCH TAXPAYER MAY PROVE HIS OR HER INCOME BY PRODUCING  ONE  OF
THE FOLLOWING VERIFICATIONS:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14717-04-2

              

A. 9965                             2

  (1)  "PERMANENT  BOOKS  OR  RECORDS" ARE PAPER OR ELECTRONIC DOCUMENTS
THAT REFLECT THE AMOUNT AND  SOURCE  OF  ALL  INCOME  EARNED  FROM  PAID
EMPLOYMENT.
  (2)  EXAMPLES  OF  "PERMANENT  BOOKS  OR  RECORDS" INCLUDE BUT ARE NOT
LIMITED TO:
  (A) STATEMENTS FROM  FINANCIAL  INSTITUTIONS  REFLECTING  DEPOSITS  OF
MONEY EARNED;
  (B) ELECTRONIC LEDGERS OR SPREADSHEETS; OR
  (C) HANDWRITTEN ACCOUNTS MAINTAINED IN A BOUND LEDGER.
  (3)  A  DIFFERENT LEDGER SHOULD BE MAINTAINED FOR EACH TAX YEAR'S CASH
EARNINGS RECORDS, AND EACH RECORD SHALL BE MAINTAINED FOR AT LEAST THREE
YEARS AFTER THE TAX YEAR FOR WHICH IT WAS SUBMITTED.
  (B) ENTRY REQUIREMENTS FOR HANDWRITTEN LEDGERS.  (1) SUCH RECORD SHALL
INCLUDE, IN CHRONOLOGICAL ORDER, AN ENTRY FOR EACH TRANSACTION FOR WHICH
SUCH TAXPAYER EARNS MONEY WITH INFORMATION THAT  INCLUDES,  BUT  IS  NOT
LIMITED TO:
  (A) THE AMOUNT OF MONEY EARNED;
  (B)  THE  APPROXIMATE  TIME  AND DATE ON WHICH THE MONEY WAS EARNED OR
RECEIVED;
  (C) THE PORTION OF THE MONEY  RECEIVED,  IF  ANY,  THAT  WENT  TO  THE
TAXPAYER'S EMPLOYER;
  (D) A BRIEF DESCRIPTION OR LIST OF THE TASK OR TASKS PERFORMED FOR THE
MONEY EARNED.
  (2) SUCH RECORD MAY INCLUDE ENTRIES FOR WORK-RELATED EXPENSES AND EACH
SUCH ENTRY MAY INCLUDE, BUT NOT BE LIMITED TO THE:
  (A) AMOUNT OF THE WORK-RELATED EXPENSE;
  (B) APPROXIMATE TIME AND DATE THE WORK-RELATED EXPENSE WAS INCURRED;
  (C) NATURE OF THE WORK-RELATED EXPENSE; AND
  (D) DATE ON WHICH THE ENTRY WAS MADE.
  (3)  AN  ENTRY  FOR  ANY TRANSACTION SHALL BE MADE AS SOON AS POSSIBLE
AFTER THE TRANSACTION OCCURRED; PROVIDED, HOWEVER, THAT A CORRECTION  TO
AN  ENTRY SHALL NOT BE INVALID IF IT IS MADE MORE THAN THIRTY DAYS AFTER
THE TRANSACTION FOR WHICH SUCH ENTRY WAS MADE.
  (C) ADDITIONAL ACCEPTABLE INCOME VERIFICATION DOCUMENTS.  (1)  IN  THE
ABSENCE  OF PERMANENT BOOKS OR RECORDS, A TAX FILER MAY VERIFY INCOME BY
PRODUCING TWO OR MORE OF THE FOLLOWING:
  (A) A SWORN AFFIDAVIT, SIGNED  BY  THE  FILER,  STATING:  POSITION  OR
TITLE,  NUMBER  OF  WEEKS  WORKED,  NUMBER OF HOURS WORKED PER WEEK, THE
WAGES EARNED AND A BRIEF DESCRIPTION OF WORK PERFORMED. A SEPARATE NOTA-
RIZED AFFIDAVIT SHOULD BE COMPLETED FOR EACH JOB;
  (B) RECEIPTS  FROM  WORK  SUPPLIES,  INCLUDING  BUT  NOT  LIMITED  TO:
UNIFORMS AND MATERIALS NEEDED TO COMPLETE A SPECIFIC JOB;
  (C) RECEIPTS FROM LICENSING OR CERTIFICATION FEES, MEMBERSHIP DUES, OR
OTHER PROFESSIONAL DUES;
  (D) RECEIPTS FROM WORK-RELATED EXPENSES, INCLUDING BUT NOT LIMITED TO,
TRANSPORTATION COSTS AND CHILD CARE;
  (E) SIGNED LETTER FROM EMPLOYER STATING WAGES PAID;
  (F)  INCOME  AND  EXPENSES  WORKSHEET  COMPLETED  WITH A CERTIFIED TAX
PROFESSIONAL;
  (G) RECEIPTS FROM A CHECK CASHER REFLECTING REGULAR RECEIPT OF WAGES;
  (H) PHOTOCOPIES OF CHECKS, OR PAY ENVELOPS, GIVEN TO THE  TAXPAYER  AS
PAYMENT FOR GOODS OR SERVICES.
  (D)  ERRORS OR OMISSIONS. A DE MINIMIS NUMBER OF OMISSIONS OR FAILURES
TO CORRECT ENTRIES SHALL NOT BE SUFFICIENT IN AND OF ITSELF TO RENDER  A
TAXPAYER'S RECORDS INADEQUATE TO VALIDATE THAT TAXPAYER'S INCOME FOR THE
RELEVANT TAX YEAR.

A. 9965                             3

  (E) PRESUMPTION OF ACCURACY AND COMPLETENESS. (1) SO LONG AS THE MINI-
MUM  REQUIREMENTS  SET  FORTH  IN  THIS  SECTION ARE MET, AND UNLESS THE
DEPARTMENT HAS AFFIRMATIVE EVIDENCE TO DIRECTLY CONTRADICT  THE  TAXPAY-
ER'S  RETURN, THE DEPARTMENT SHALL PRESUME THE ACCURACY AND COMPLETENESS
OF THE RECORD AND THE GOOD FAITH OF THE TAXPAYER.
  (2)  PROVIDED  THE  MINIMUM REQUIREMENTS SET FORTH IN THIS SECTION ARE
MET, THE PARTICULAR FORMAT OF THE RECORD SHALL NOT BE USED  AS  EVIDENCE
OF INSUFFICIENT RECORDKEEPING OR BAD FAITH ON THE PART OF THE TAXPAYER.
  (3)  PROVIDED  THE  MINIMUM REQUIREMENTS SET FORTH IN THIS SECTION ARE
MET, A MID-YEAR CHANGE IN THE FORMAT OF RECORDKEEPING  WITHIN  A  SINGLE
LEDGER  SHALL  NOT BE CONSIDERED EVIDENCE OF INCOMPLETE RECORDKEEPING OR
BAD FAITH IF SUCH CHANGE INDICATES AN ATTEMPT TO  IMPROVE  UPON  RECORD-
KEEPING.
  S 4. This act shall take effect on the one hundred twentieth day after
it  shall  have become a law. Effective immediately, the commissioner of
taxation and finance is  authorized  to  make  any  addition,  amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date on or before such date.