Individuals, businesses and even state governments felt the impact of the recession in recent years. States throughout the country, including New York, reported weak gains in tax revenue growth for the last two years. State government finally appear to be rebounding. Recent data shows this year is off to a much better start. Tax collections for Q2 in New York were reportedly up 18.2 percent.
What does this mean? An increase in total tax collections could translate to increased funding for various state agencies. Researchers with the Pew Charitable Trust Foundation have noted this increase led to pressure for policymakers to “catch up on investments and spending” resulting from the recession.
Will increased purchase power translate to more audits? New York State’s Department of Taxation and Finance will continue to use the same guidelines as in the past. These guidelines encourage the agency to watch for tax returns that do not properly report income or sales, misuse credits or do not match up with information provided to the Internal Revenue Service (IRS) for an audit.
According to the PEW Research Center, although this increase in sales tax receipts has translated to increased purchasing power for the state, the increase will likely level out. This was due to a number of factors, including a push for payment on offshore earnings before the end of the 2017 tax year. As such, the increase is unlikely to have a large impact on the current audit rate.
Even so, taxpayers are wise to note a failure to properly file tax returns can trigger an audit. In the event of an audit, it is wise to act to protect your legal rights. The attorneys at Goldburd McCone have experience in these matters and can better ensure your interests are protected during an audit.