senate Bill S3248

2011-2012 Legislative Session

Relates to filing of amended tax returns in certain cases

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to investigations and government operations
Feb 14, 2011 referred to investigations and government operations

S3248 - Bill Details

See Assembly Version of this Bill:
A5196
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd ยงยง659 & 687, Tax L
Versions Introduced in 2009-2010 Legislative Session:
A3331, S1174

S3248 - Bill Texts

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Permits the limited filing of amended personal income tax returns in certain cases after the time period permitted by law has lapsed.

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BILL NUMBER:S3248

TITLE OF BILL:

An act
to amend the tax law, in relation
to filing of amended personal
income tax returns

PURPOSE:

This bill equates the rights and responsibilities of a New York
taxpayer, who is also a taxpayer in another state, when the other
state makes changes or corrections in income tax returns filed with
that state, to the rights and responsibilities of a New York taxpayer
when the Internal Revenue Service makes changes or corrections in a
federal income tax return.

SUMMARY OF PROVISIONS:
Section one states Legislative findings that the complexity of income
tax laws, particularly affecting income earned in one state by a
taxpayer residing in another state, has contributed to unfair
situations. The Legislature determines to remedy this problem by
treating changes to a New York taxpayer's obligations to another
state in the same fashion as changes made to federal obligations.
Section two amends section 659 of the Tax Law to provide that the
rights and responsibilities of a New York taxpayer when his or her
income tax obligations to another state are changed or corrected by
that state will be the same as currently provided when a change or
correction in federal tax obligations is made by the Internal Revenue
Service. Section three amends section 687 of the Tax Law to expand a
cross reference to section 659 by deleting restrictive references to
"federal" changes or corrections. Section four enacts a transition
provision which provides to current taxpayers an extension of time
for filing a claim for credit of taxes paid to another state in a
similar fashion as the amendments to sections 659 and 687 will
provide to future taxpayers. Section five is the effective date.

EXISTING LAW:
Existing section 659 of the Tax Law establishes the rights and
responsibilities of a New York taxpayer when that taxpayer's federal
income tax return is changed or corrected by the Internal Revenue
Service. Generally, the taxpayer must file an amended New York State
income tax return reflecting the changes within 90 days after a final
federal determination. Existing section 687 of the Tax Law then
provides that when a taxpayer files an amended state return pursuant
to section 659, that taxpayer may claim a New York State credit or
refund within two years of the final federal determination.

JUSTIFICATION:
The Tax Law has long recognized the inter-relationship between federal
income tax returns and New York State income tax returns filed by the
same taxpayer. When changes or corrections to federal returns are
made by the Internal Revenue Service, a New York taxpayer is given
time to file parallel amendments to his or her state return, and to
pay additional taxes or to receive the benefit of additional credits


or refunds. There is no equivalent provision when a resident New York
taxpayer files income tax returns with both New York and another
state or states. Because of this omission, a taxpayer may be
substantially harmed if another state makes a change -- after the
effectiveness of New York's statute of limitations -- which results in
increased taxes owed to that state, but reduced taxes owed to New
York. In that case, the taxpayer must pay the other state, but is too
late to claim a refund from New York, causing the taxpayer to pay the
same tax twice. This bill would treat the other state's change the
same as if it were a change made by the IRS, so the New York taxpayer
has two years from the change in order to file for a credit or
refund, regardless of the statute of limitations on the original New
York filing.

LEGISLATIVE HISTORY:
2006, S.6683B/A.9896B, Passed Senate
2007, S.920/A.1644, Passed Senate
2008, S.920/A.10103, Passed Senate/Referred to Ways and Means
2009, S.1174/A.3331, Investigations and Government Operations/Ways and
Means

FISCAL IMPLICATIONS:
Minimal. Any credits or refunds properly belong to the taxpayer.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediate. Transition provisions permit existing taxpayers to file for
applicable credits on returns filed up to four years past the current
statute of limitations, while the new Tax Law provisions are
applicable to tax years starting on or after January 1, 2012.

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

    S. 3248                                                  A. 5196

                       2011-2012 Regular Sessions

                      S E N A T E - A S S E M B L Y

                            February 14, 2011
                               ___________

IN  SENATE -- Introduced by Sen. FARLEY -- read twice and ordered print-
  ed, and when printed to be committed  to  the  Committee  on  Investi-
  gations and Government Operations

IN  ASSEMBLY  --  Introduced  by M. of A. AMEDORE, TOBACCO, McDONOUGH --
  read once and referred to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to filing of  amended  personal
  income tax returns

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

  Section 1.  Legislative  findings.  The  legislature  finds  that  the
increasing  complexity  of income tax laws, particularly those affecting
income earned in one state by a taxpayer residing in another state,  has
contributed  to  unfair  and inequitable situations. Although a New York
taxpayer may offset taxes paid to another state against his or her state
income tax liability, delays in assessment and notification by the other
state may cause filing of an amended return to be barred by the  statute
of  limitations. As a result, the New York taxpayer is forced to pay the
same tax obligation twice, once to New  York  and  again  to  the  other
state.  In an effort to provide an equitable remedy for affected taxpay-
ers, the legislature determines to treat changes to a  taxpayer's  obli-
gations  to  another  state  in  the  same  fashion as changes made to a
taxpayer's federal obligations.
  S 2. Section 659 of the tax law, as amended by chapter 577 of the laws
of 1997, is amended to read as follows:
  S 659.   Report of [federal] changes,  corrections  or  disallowances.
(A)  If the amount of a taxpayer's federal taxable income, federal items
of tax preference, total taxable amount or ordinary income portion of  a
lump  sum  distribution or includible gain of a trust reported on his OR
HER federal income tax return for any taxable year, or the amount  of  a
taxpayer's   earned  income  credit  or  credit  for  employment-related

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07745-01-1

S. 3248                             2                            A. 5196

expenses set forth on such return, or the amount of any federal  foreign
tax  credit affecting the calculation of the credit for Canadian provin-
cial taxes under section six hundred twenty or six hundred  twenty-A  of
this article, or the amount of any claim of right adjustment, is changed
or  corrected  by  the  United  States internal revenue service or other
competent authority or as the result of a renegotiation of a contract or
subcontract with the  United  States,  or  the  amount  an  employer  is
required  to deduct and withhold from wages for federal income tax with-
holding purposes is changed or corrected by such service or authority or
if a taxpayer's claim for credit or refund  of  federal  income  tax  is
disallowed  in  whole  or in part, the taxpayer or employer shall report
such change or correction or disallowance within ninety days  after  the
final  determination of such change, correction, renegotiation or disal-
lowance, or as otherwise required by the commissioner, and shall concede
the accuracy of such determination or state  wherein  it  is  erroneous.
The allowance of a tentative carryback adjustment based upon a net oper-
ating  loss  carryback  pursuant to section sixty-four hundred eleven of
the internal revenue code shall be treated as a final determination  for
purposes of this section.  Any taxpayer filing an amended federal income
tax  return  and any employer filing an amended federal return of income
tax withheld shall also file within ninety days  thereafter  an  amended
return  under  this  article,  and  shall  give  such information as the
commissioner may require.  The commissioner may by regulation  prescribe
such  exceptions  to the requirements of this section as he or she deems
appropriate.   For purposes of this section,  (i)  the  term  "taxpayer"
shall  include  a  partnership  having  a resident partner or having any
income derived from New York sources, and a corporation with respect  to
which  the  taxable  year  of  such  change, correction, disallowance or
amendment is a year with respect to which the election provided  for  in
subsection  (a)  of  section  six  hundred  sixty  of this article is in
effect, and (ii) the term "federal income tax return" shall include  the
returns  of  income  required under sections six thousand thirty-one and
six thousand thirty-seven of the internal revenue code.  In the case  of
such  a  corporation,  such  report  shall  also  include  any change or
correction of the  taxes  described  in  paragraphs  two  and  three  of
subsection  (f)  of  section  thirteen hundred sixty-six of the internal
revenue code.   Reports made under this  section  by  a  partnership  or
corporation  shall  indicate  the  portion of the change in each item of
income, gain, loss or deduction (and, in the case of a  corporation,  of
each  change  in,  or disallowance of a claim for credit or refund of, a
tax referred to in the preceding sentence) allocable to each partner  or
shareholder  and  shall  set  forth  such  identifying  information with
respect to such partner or shareholder  as  may  be  prescribed  by  the
commissioner.
  (B) IF THE AMOUNT OF A TAXPAYER'S OBLIGATION TO ANOTHER STATE PURSUANT
TO  THAT  STATE'S INCOME TAX LAWS IS CHANGED OR CORRECTED BY A COMPETENT
AUTHORITY OF THAT STATE, THE RIGHTS AND RESPONSIBILITIES OF SUCH TAXPAY-
ER SHALL BE THE SAME AS IF THE CHANGE OR CORRECTION HAD BEEN MADE BY THE
UNITED STATES INTERNAL REVENUE SERVICE PURSUANT  TO  SUBSECTION  (A)  OF
THIS SECTION.
  S 3. Subsection (c) of section 687 of the tax law, as amended by chap-
ter 61 of the laws of 1989, is amended to read as follows:
  (c)  Notice of [federal] change or correction.-- A claim for credit or
refund of any overpayment of tax attributable to a [federal]  change  or
correction  required  to  be  reported  pursuant  to section six hundred
fifty-nine OF THIS ARTICLE shall be filed by  the  taxpayer  within  two

S. 3248                             3                            A. 5196

years  from  the  time  the  notice of such change or correction or such
amended return was required to be filed with the commissioner  of  taxa-
tion  and  finance.  If the report or amended return required by section
six  hundred  fifty-nine  OF THIS ARTICLE is not filed within the ninety
day period therein specified, no interest shall be payable on any  claim
for  credit  or  refund of the overpayment attributable to the [federal]
change or correction. The amount of such  credit  or  refund  shall  not
exceed the amount of the reduction in tax attributable to such [federal]
change,  correction or items amended on the taxpayer's amended [federal]
income tax return. This subsection shall  not  affect  the  time  within
which  or the amount for which a claim for credit or refund may be filed
apart from this subsection.
  S 4. Transition provision.  Notwithstanding the provisions of  section
683  of  the  tax law, a taxpayer who filed an income tax return for the
tax years beginning January 1, 2000, January 1, 2001, January  1,  2002,
January 1, 2003, or January 1, 2004, may file an amended return to claim
a credit pursuant to section 620 of the tax law which was allowed during
such  periods  but not claimed by such taxpayer. Any such amended return
shall be filed within ninety days after the effective date of this act.
  S 5. This act shall take effect immediately;  provided  that  sections
two  and three of this act shall apply to taxable years beginning on and
after January 1, 2012.

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