Broker Check

Webinar Transcript: “Hot Topics in NYS/NYC Residency and Personal Income Taxes”

May 02, 2024

Webinar Transcript (5/2/2024): “Hot Topics in NYS/NYC Residency and Personal Income Taxes


Host: Jonathan I. Shenkman, President & Chief Investment Officer of ParkBridge Wealth Management (Contact:


Presenter: Timothy P. Noonan, Partner - Tax Residency Practice Leader, Hodgson Russ LLP (Contact:



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Jonathan Shenkman: Good morning and welcome to the Park Bridge Wealth Management Spring Webinar Series. This program is entitled Hot Topics in New York State at New York City Residency and personal income taxes. As always. My name is Jonathan Shankman. I'm the president and chief investment officer of Park Bridge wealth management. In that role I serve in a fiduciary capacity to help my clients achieve their financial objectives.



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Jonathan Shenkman: The goal of my programs is to bring professionals together to help them better serve their clients. This is done by educating attendees on the latest topics in wealth planning, and by encouraging collaboration between a client's attorney, Cpa. And Financial advisor where appropriate my practice folks. I'm working with high net, with families, businesses, and not for profits. I manage individual investment portfolios, trust accounts, corporate retirement plans and endowments help my clients achieve their financial goals.



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Jonathan Shenkman: In addition to the 20 or so events I run every year. I also do a fair amount of writing on the topics of investing in financial planning, and you create my work in a variety of periodicals, including Barron, Cnbc. Forbes, Kiplinger, the Wall Street journal and trust in Estates Magazine to name just a few.



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Jonathan Shenkman: You could see all my work on my website at Parkbridge Wealthcom, forward slash articles, or by following me on social media at Jonathan, on money. Additionally, you could check out my weekly podcast which is also called Jonathan on money, and you could listen to that an apple spotify or wherever you get your podcast



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Jonathan Shenkman: today, we're privileged here from Timothy, Noonan from Hudson Rus, based in Buffalo, in New York City, Tim is a partner and a tax residency practice leader at his firm where he focuses his practice in the state and local tax area.



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Jonathan Shenkman: His work primarily involves primarily involves New York State and New York City tax, litigation and controversy over the past 23 years. He's handling more than 2,000 personal income tax sales, tax corporate tax or other New York tax audits. Tim also has handled about a hundred cases in New York's division of tax appeals.



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Jonathan Shenkman: He's handled some of that most high profile Residency cases in New York over the past decade, including the 2014 win in the guyed case one of the first New York Residency cases to ever reach New York's highest court. He's often quoted by media outlets, including Wall Street Journal, New York Times, and Forbes on Residency and other State tax issues as the noon in noon's Notes, a monthly column and tax Notes state Tim is a nation, recognize author and speaker on state tax



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Jonathan Shenkman: issues. And today Tim will be speaking on hot topics in New York State and New York City Residency and personal income taxes. And with that introduction I'll now turn the program over to Tim.



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Tim Noonan: Alright thanks. Jonathan, appreciate that. That intro, I also just subscribed to your podcast. So i'm on there,



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Jonathan Shenkman: You're welcome to come back anytime. I love it.



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Tim Noonan: Alright sounds. Good.



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Tim Noonan: Well, that's actually also one of the one of the guys in my office has a state. It's called state tax talks. Podcast where he talks to attorneys in our state and local tax practice group and others about about tax topics. So I think Jonathan and I are a podcast. Nerd. So there you go. So really, thanks for having me back. I've been doing this with Jonathan for



00:03:02.110 --> 00:03:17.870

Tim Noonan: 10 years, maybe longer. I've used to be in person. with with coffee and bagels and such. We've been doing it this way for the past 4 or 5 years, obviously, and but it's it's a it's a great group. So I'm I'm definitely glad to be here.



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Tim Noonan: Great topic today. It's I, you know in a in a bit of nostalgia. I looked back at the



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Tim Noonan: Powerpoint from May 2020, when Jonathan had me do this right after sort of Covid came upon us, and it was. It was sort of funny, because I I think I've I accurately predicted some of the major issues that would come out of my practice area, which again, is State and local taxes with a focus on income taxes for high net worth folks. These Residency issues are a huge part of my practice. And I just sort of thought at that time. Granted, we're like 6 weeks in the pandemic like



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Tim Noonan: Jeez, I I think there's some, some gonna be, some some big issues. I was getting tons of calls at the time from people who wanted to leave New York.



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Tim Noonan: and and maybe Connecticut and some other places. California, things like that. And it was also people working from home all the time, which obviously is a lot of people still do. And I thought, Man, that that's gonna create some, some tax issues, too, in terms of which state you have to pay taxes to. So we actually looked at that Powerpoint. We talked a lot about those things. It was funny, cause I had a couple of slides on.



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Tim Noonan: You know how to count days when you can't leave your State cause of one reason or another, or you can't. You know States weren't letting people, you know from New York. Enter Rhode Island or something. I I thought, man.



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Tim Noonan: thankfully. No issues ever really come up about that stuff, but sort of funny to funny slash scary as Slad. Sad to to to think back 4 years ago. But in any case.



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Tim Noonan: a couple of issues that I had that we had flagged back 4 years ago were again, one. This concept of Residency where people live people were moving how to how to effectuate a move, whether move is going to be permanent or not, that those issues have have really been prevalent in this Residency area. And then, you know, telecommuting how how you do state taxes when when you have workers who are telecommuting, that's become a massive issue. And we'll talk about that a little bit today. This morning as well.



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Tim Noonan: I know in this format you're just listening. I'm just talking to you, so we don't have questions my contact. Information is here at the at the front. It's in the back, always willing to take a call or answer an email. If folks have questions, so feel free to to ask us questions if you have them. So first, a couple of data points here that I that I think is interesting. Some some stats we've seen on Bloomberg recently. So you know, this is sort of an obvious



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Tim Noonan: slide here in terms of just, I think, what people are realizing that



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Tim Noonan: more people have moved since the pandemic. You see, it's



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Tim Noonan: not doubled, but well almost doubled. In some cases the amount of people leaving



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Tim Noonan: anecdotally. I've I've seen the same thing in my practice just with the amount of phone calls I get. I mean, I I sometimes think I should change my voice mail to, hey? It's Tim Noonan. Sorry I missed your call. Press one. If you want to move to Florida, plus 2. If you want to move to Texas, you know what I mean, it's just. It's it's a lot. So I've seen that kind of volume. And the other thing we're seeing is it's not just people are moving. But you know.



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Tim Noonan: high net worth rich people are moving like this. This slide is really interesting just to see, like the the percentage of people who moved and their income levels before the pandemic and after again, kind of what we're seeing here, too, which is.



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Tim Noonan: and I think, or hope maybe states are realizing this as well.



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Tim Noonan: But the wealth. It's easier for them to move these days, particularly with the ability to work from anywhere. So it's easier for people to move



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Tim Noonan: and particularly for for wealthy people to move. It's it's it's impacting these states states, states like California in New York. In fact, New York.



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Tim Noonan: you know the the Governor's budget just passed, and there was a push by some legislators to increase New York's tax rate again, they already increased it in 2021, right in the middle of Covid to to give the combined New York State and city tax rate the highest in the country. I mean, it was crazy. If they thought they were, gonna do it again. They didn't. And again, I think that's because there at least, is some realization even in New York, that you just can't keep raising taxes because we're chasing people out.



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Tim Noonan: But New York is good at, you know chasing people who are leaving so if people leave, there's going to be an audit. Now, the data here is all New York audits. So it's corporate tax audits, sales, tax audits, you know, fuel tax audits, whatever. So there's hundreds of thousands of of New York audits. And they collect billions of dollars in these audits.



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Tim Noonan: in on the Residency side of the the house.



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Tim Noonan: Personal income taxes. You know the number of audits like real



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Tim Noonan: detailed field audits where someone moves to Florida, and they file, as you know, partner, resident or whatever. And they get audited.



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Tim Noonan: That number is probably based on some data. We got a few years ago, probably more like 5,000. That's a lot of audit activity. Right? That's a lot of the text firm and auditing lots of people who have moved.



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Tim Noonan: There's also a much greater number. And and those of you who are accountants definitely saw this in 21 and 22 where the State did what what we in our



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Tim Noonan: world we call desk audits. So they didn't send out an auditor to, you know. Ask tons of questions and look at the Residency issue in detail, for instance, but they, the computer kind of spit out a quick, hey? We saw that your allocation went down from 100% to 60%. What gives or or even we saw, that you, you claimed a part, your resident status, what W. What gives so really quick hitters that we call them desk audits, because there's not



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Tim Noonan: necessarily it's not a field audit. It's it's it's a more surface level audit.



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Tim Noonan: But we saw.



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Tim Noonan: I think, that the number on those are a couple of 100,000 in 21 and 22 we haven't seen the in the in the tax department was very deliberate and frankly pretty smart. That they did that because so many people either telecommuting or moving, they they couldn't. They didn't have enough auditors to to chase everybody. So they set up this desk auto program to again, maybe either quickly. Triage for for bigger audits or just to



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Tim Noonan: again. Get kind of low hanging fruit and maybe low hanging fruit for audit cases that more that normally they wouldn't take because the dollars are too small. So again, lots of activity in New York just a as an interesting comparison. California. And you know, we've seen in, you know, lots of people reach out to us to about other state tax issues. And we we have expertise. And we've handled issues in other States as well. California has come up a lot. Couple of folks on my team are



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Tim Noonan: license in California, because we were, you know, getting a lot of California questions and activity. But interestingly, from an audit perspective, you see that the sort of volume of their audits is significantly less than New York. It might be 10% of what New York is. Now, it's funny. My experience with California Residency audits are, you know, I sort of used to think New York audits were bad. I mean, these things go on forever. And because there's fewer audits, I guess there's like less of a



00:10:09.870 --> 00:10:31.590

Tim Noonan: track record. There's less precedent and not just precedent, like court cases. But you know, just a a system in place to to sort of resolve disputes. There's a there's you're dealing with the same people all the time. So you see a lot of this, the the same problems it allows you to to just more efficiently resolve cases. Which I think happens in New York a lot. Not so much in California. So.



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Tim Noonan: But what we see here is lots of people moving that creates the kind of tax issues I thought would be huge 3, 4 years ago. So



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Tim Noonan: let's talk about Residency just real real broadly. So I get a call, hey? You know, Tim, I want to move to Florida. I I don't want to be in New York anymore. So we're always want to have in mind. The the 2 Residency tests right? So the first Residency test called Statutory Residency is sort of the objective test.



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Tim Noonan: It's also the one that most people are aware of.



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Tim Noonan: And unfortunately, it's the. It's



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Tim Noonan: people think it's the only test. It's called Statutory Residency, black and white. You can't be in New York for more than 183 days.



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Tim Noonan: And you can't maintain a permanent place of a boat or stated another way. You're a statutory resident of New York. If you maintain living quarters for more than 10 months of the year, it's called the permanent place of a boat under the law, and you spend more than 183 days.



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Tim Noonan: black and white. If you're under 183 days, you're not a statutory resident under this mechanical test.



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Tim Noonan: It's it very important, particularly for my Florida movers to not get overly focused on this test, because if you spend 182 days in New York. Good for you. You're not a statutory resident, but that probably means you're spending more days in New York than Florida as we're gonna talk about in a second. That's not good. So but again, this mechanical test.



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Tim Noonan: there's always something we want to have in mind. And frankly, this is the kind of test that arises, a lot for people who live in Connecticut or Jersey, or somewhere, you know, in in the area, and they commute into New York for work.



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Tim Noonan: Well, if that happens, and they have a a, some living quarters in New York, even a small apartment that they don't use that much. They can actually be a resident of New York as well. New York State and City and be a dual resident of 2 States. So this statutory residency test pops up a lot in the context of the commuter who's coming in and out of New York for work on a on a regular basis



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Tim Noonan: couple. You know things on this test day, counting becomes really important, being able to prove where you were and actually being able to prove where you weren't. The burden of proof is on the taxpayer. The taxpayer has to prove that they weren't in New York for more than 183 days. So if you have a taxpayer who just uses cash all the time there, there are a couple of those people still on the planet. It's hard to win a daycount case, because there's no proof of where you were.



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Tim Noonan: Thankfully these days. 2024. Everyone knows the government knows where you are. Right. I mean, we're carrying around cell phones. They're paying cell towers. There's apps. You can stick on your phone. The moneto app is is a great one, and so. But but day county becomes super important in in this, in this context for that test, it's also important for the second test.



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Tim Noonan: which is the domicile test. So we had our objective. We objective test 183 days. But the domicile test again, particularly for someone who's thinking about the New York to Florida or California, to Texas thing, or whatever



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Tim Noonan: domicile is the other test. Under that test



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Tim Noonan: your domicile is your state of residence for personal income tax purposes. Domicile means your permanent home, your primary home, and you can only have one



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Tim Noonan: so you can't, you know. So while you can be a resident of 2 states, you can only have one domicile. Importantly, as I



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Tim Noonan: stated a minute or so ago. This isn't the 1 93 day test. It's not oh, 6 months in a day outside New York, in a driver's license in Florida, and I'm home free. It's not the way it works. Because it's a subjective test. We're trying to determine where your home is. So we're weighing a mosaic of facts and factors and circumstances. And we're seeing how much sort of favors Florida versus how much favors New York.



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Tim Noonan: And there's all sorts of factors. You can Google them. You know, there's checklist on the Internet. But the problem with sort of the typical checklist analysis, when someone's doing this kind of thing is, people aren't waiting, which ones are important and which ones aren't right. What is not important.



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Tim Noonan: really, where your driver's license is, where your voter registration is, where your symmetry. Plots are, you know.



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Tim Noonan: goofy things like you know where your addresses are on your credit card like these are all things that you sort of mind when you're doing a move right? We're gonna work through. We're gonna we're gonna change. We're gonna do it right. I'm not saying, don't change your driver's license.



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Tim Noonan: But it doesn't advance your ball forward all that much. It's just not that critical to proving that your home has changed from New York to Florida. What is important is your time patterns. How much time you spending in New York versus Florida.



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Tim Noonan: As soon as we end this webinar, I'm running over to a Conciliation Conference, which is like a an appeals appeals unit in New York, and this taxpayer did a lot of good things towards Florida. He retired. He got a home down there, or he had a home, and he he renovated it.



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Tim Noonan: He really did change his life, but he came back. He, you know, he didn't travel back and forth a lot, but he came back for the summer, and summer sometimes started in the middle of May and went to the end of September, and he's got 150 days in New York in New York. Says too many days, too. That's too many days. He spent 190 or 200 days in Florida, but he spent 100 5,060 days in New York and New York says, that's too many days. And why are they saying that? Because



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Tim Noonan: the burden of proof is on us to prove a change of domicile from New York to Florida? And, as it says, on the slide here. It's got to be clear and convincing evidence. So look.



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Tim Noonan: I'm all geared up for this case. I'm going in a couple of minutes. I think we have clear and convincing evidence. It's, I think, under the case law, it's just dandy and fine. If someone spends 150 days in New York they could still be domiciled in in Florida. But it's harder when your time patterns are like that right? If your time patterns are like 2 to one. I spent 210 days in in Florida, and 100 and 105 days in New York, and I did some traveling.



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Tim Noonan: That's better. Right in my experience handling thousands of these audits. We're gonna we're gonna win that audit, most likely. And it's not. I'm not gonna have to go to appeals Bureau and fight it out like. So time patterns become really important.



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Tim Noonan: Your housing becomes important. Did you downsize your house in New York? Did you upsize a place or buy a new place in Florida, or wherever you're moving? So that's important where your business ties are



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Tim Noonan: are also important. And with telecommuting. You know, the tax department for years has said.



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Tim Noonan: if you're working remotely for a New York business, that's a New York business time for purposes of the domicile test, so they'll hold that against you, too.



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Tim Noonan: And of course.



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Tim Noonan: family is an important part of this, too. Husbands and wives usually move together. So where? Your where your spouse is domiciled, that's that's going to be a factor.



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Tim Noonan: Where kids are, too, particularly young kids. You got kids in school, and they're in school in in New York.



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Tim Noonan: It's going to be tough to win.



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Tim Noonan: They're in school in Florida.



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Tim Noonan: It's going to be tough to lose. So I mean, that becomes important too. So the important part of this domestic. It is a facts and circumstances. Type thing.



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Tim Noonan: And the burden is on us to prove a move.



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Tim Noonan: The clear and convincing test is real. You know the cases say a close call.



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Tim Noonan: We lose tie favors the government. Anything close to a tie favors the government. It's got to be clear and convincing. So you gotta build up those those factors as much as you can.



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Tim Noonan: The other thing about the domicile move is, it's gotta be permanent, or at least indefinite. We sometimes talk about. This is leaving and landing. You have to leave New York. You have to land in the new place and again landing.



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Tim Noonan: Obviously you get a place there.



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Tim Noonan: You spend time there, but it's also that you're there on again at least an indefinite basis. So what's happened in a lot of our cases, particularly around Covid. Now.



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Tim Noonan: is this sort of leave and land idea? Right? So this is a fact pattern. I mean, I'm seeing it a lot now, because New York City is auditing so many taxpayers right now for this issue. We have a New York City person.



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Tim Noonan: We had a place in the Hamptons or Connecticut, or where, or Vermont, or insert wherever. But it was a vacation property



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Tim Noonan: went there during Covid.



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Tim Noonan: kept the New York City place



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Tim Noonan: and ended up back in New York City in the fall of 2022



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Tim Noonan: New York City is saying, Okay, well, you know. You're not a statutory resident. Good for you. You're under 1, 83 days. But was that a permanent move to the Hamptons or to Connecticut, or wherever



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Tim Noonan: did you leave and land.



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Tim Noonan: or were you just a Covid refugee? You needed to get out of town for a while during Covid.



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Tim Noonan: If it's the latter, we're gonna lose that audit. And for people who have come back, and in 2022 file the part year resident of New York City, and claimed to move back that the auditors are now seeing because the tax returns been filed.



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Tim Noonan: The owners are like - hindsight's 2020. You're only gone for a couple of years. That's not a permanent move you didn't leave and land right? You didn't leave. You didn't land. That's a that's a problem that we've had a number of these cases, and some of them are better than others.



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Tim Noonan: In some cases I have people who really did Covid hit. They're like, I'm getting the hell out of here. I'm not coming back. And they gave up their apartment and they moved to a new place. Maybe it was a vacation place. Maybe it was a maybe they bought a new place. They had kids. They stuck him in school, and then, after 18 months or so or 2 years, they're like, you know, it's not working out, and cities kind of come back a bit.



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Tim Noonan: I didn't think this was gonna happen. But I'm gonna move back okay, like. And by the way, you could win that case right? Life happens. Circumstances change. If if I could prove that my intention in the spring of 2020 was to permanently leave New York and permanently land in the Hamptons and stay there for good or Florida, and stay there for good.



00:20:15.220 --> 00:20:20.930

Tim Noonan: I should win right. The fact that things happen later that changed my intentions



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Tim Noonan: doesn't mean that my intentions weren't were good and valid and honest in the spring of 2020. It's just, you know, on paper. A case like this doesn't look good. It's not. It doesn't mean it's fatal doesn't mean you're gonna lose. But this is a fact pattern we're seeing a lot.



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Tim Noonan: I mean again, is this, it's in 2 years, 3 years when I'm doing this with Jonathan like this probably won't be an issue anymore. Maybe there'll be a couple of court cases that are still lingering. But you know this this type of issue. It's it's so unique, you know, in in specific to what happened in Covid. But in any case, those are some of the issues that are coming up.



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Tim Noonan: So the other thing going on, as I mentioned before, is that New York is very active in auditing people.



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Tim Noonan: You know, thousands of audits every year, you know, over 25 years of my career. I've handled thousands of audits. It's just it's just a lot. There's a lot of activity. They have a sophisticated audit program. They're aggressive. And you know, they're



00:21:17.470 --> 00:21:25.160

Tim Noonan: they got an AI going or something like they when people move, you know they files a part, your resident if the income is at a certain level.



00:21:25.310 --> 00:21:27.230

Tim Noonan: it's gonna be an audit like it's not.



00:21:27.380 --> 00:21:42.339

Tim Noonan: you know, when people come to me for help in planning a move, we're not doing things to avoid an audit. Right? That's it's just not possible. In fact, sometimes we're just we're just happy. We're glad to get an audit because we'd like to get it over with. We know it's coming. Let's get it over with.



00:21:42.726 --> 00:21:47.419

Tim Noonan: What's interesting is New New York has had over the years, you know. Again, a huge staff



00:21:48.180 --> 00:21:50.720

Tim Noonan: assigned to handle these types of cases.



00:21:51.000 --> 00:22:00.970

Tim Noonan: That number is dropping. The Irs is picking off lots of New York tax auditors. Like a lot. And I you know it's it's the kind of thing that I



00:22:01.050 --> 00:22:10.369

Tim Noonan: I think what we'll see, both with the number of people moving, as we saw from those slides earlier, and maybe the you know, decrease in staff at the tax department.



00:22:10.500 --> 00:22:34.959

Tim Noonan: Look, the audits aren't gonna go away, and I got a bunch of kids to put through college. I hope they don't go away, but I think the sort of the threshold right, whereas maybe 5 years ago, I said, Hey, if you're making half a million to a million bucks, and you move, you know. Expect an audit. That threshold is probably up. Maybe it's double that now, right? Maybe it's a million to 2 million dollars. You or your clients. That that's that's that could be the threshold. So



00:22:35.520 --> 00:22:40.130

Tim Noonan: the likelihood of audit really depends on the amount of income right? The New York's.



00:22:40.150 --> 00:23:02.640

Tim Noonan: you know, smart in that regard they're not chasing after everybody, you know. It's funny they did as I said during during sort of post, immediate covid years. They did that desk audit program where the threshold was a lot lower. But in a typical field audit, where the auditors are sending long information requests, and there's a lot of back and forth the dollar amount again. It's it's at least in the 7 figures these days.



00:23:02.870 --> 00:23:15.439

Tim Noonan: and a couple of things to keep in mind. In terms of these audits, and really planning for these audits. As I said before, the burden of proof is a real thing. Close calls are are not where we try to



00:23:15.470 --> 00:23:16.940

Tim Noonan: angle people.



00:23:17.410 --> 00:23:31.360

Tim Noonan: We I certainly get a lot of cases that you know. I didn't do the help on the planning where there is a close call, and we'll fight those cases and but if you're on the front end and you're planning a move. You try to do it. So there's not a close call.



00:23:31.580 --> 00:23:44.070

Tim Noonan: The other thing you're trying to do on the front end is, as I said before daycount proof like, Prove where you were, where you weren't. Cell phone data these days is again a blessing and a curse, mostly a blessing. We know where people are, and we don't, you know.



00:23:44.160 --> 00:23:56.539

Tim Noonan: 20 years ago, maybe 1015 years ago, man, I would be spending days going through easy pass and credit cards. And it's just it was a nightmare. Not so anymore. It's a lot easier to do day counting these days.



00:23:57.440 --> 00:23:58.070

Tim Noonan: So



00:23:58.170 --> 00:24:01.500

Tim Noonan: all that's important. Again. We're still doing



00:24:01.680 --> 00:24:08.659

Tim Noonan: field audits these days. The difference is, I was telling Jonathan this morning. Most of the audits I used to do. We? You know



00:24:08.840 --> 00:24:29.610

Tim Noonan: the the information request would go out. We talked to the Auditor, set a couple of days to sit down in our New York City office, get a big stack of paper, a couple of bankers, boxes go sit with them, you know. Chat for a bit, leave them the information, and then they'd be there for a couple of days, and I'd be there for a couple of days, too, and we go back in and out and have, you know, some back and forth. That doesn't happen anymore.



00:24:30.110 --> 00:24:45.520

Tim Noonan: We get an information request. We put together a huge submission. We submit it electronically, and then we wait. And then there's a there's a there's a call, or there's a Webex, or whatever. But there is different. The the way the audits happen are are just a lot different. The the in person aspect of it is pretty much gone.



00:24:45.962 --> 00:25:07.250

Tim Noonan: Yeah. The other thing is, this has always been the case. It's not a 0 sum game. In other words, it's not like. If they disagree, you lose, and you pay 100, and if if they agree, you win and you pay zeros sometimes, and oftentimes there's a settlement, if it's if it is a close call or if there are some good fax and some bad fax, there's lots of opportunity to to negotiate.



00:25:07.600 --> 00:25:16.400

Tim Noonan: and oftentimes, and really I try to have it be in all cases. If we're going to negotiate. If we're going to pay anything. We want to pay something



00:25:16.530 --> 00:25:32.530

Tim Noonan: with a recognition by the tax department that at some point the taxpayer establish Residency in another State outside New York right? Because you don't want to have to deal with this year over year over year. If you're going to cut them a check, make sure it's worth it right? Make sure to get what we call a domicile determination



00:25:32.950 --> 00:25:49.520

Tim Noonan: alright, so real quickly. That's sort of the Residency side of the house. Even if someone moves you still have to be mindful of non resident taxation, or what we call non resident allocation. So income that is sourced in New York, even as a non resident you still have to pay tax on.



00:25:49.660 --> 00:26:00.759

Tim Noonan: and the the biggest thing I'll I'll sort of address right here is telecommuting right. So if if I'm a wage earner, I'm getting salary plus bonus or stock based compensation.



00:26:00.970 --> 00:26:09.939

Tim Noonan: the sourcing is determined, based on my workdays, the amount of days I work in New York. If it's 60, I gotta pay tax on 60% of my cop right? That's easy



00:26:10.170 --> 00:26:15.879

Tim Noonan: with the telecommuting what the tele New York's telecommuting rule says as well, if you're working from home



00:26:15.930 --> 00:26:32.049

Tim Noonan: for your own convenience, it's called the Convenience rule. Then that that day gets treated as a New York day for purposes of doing that math so remote work in New Jersey or in Connecticut or in Florida. New York says that's a New York Day. There's some exceptions to that.



00:26:32.562 --> 00:26:56.029

Tim Noonan: That are are are beyond the scope of of what we're covering here today. But but that's the rule. And in Covid, New York doubled down on that rule, so much so that there's a case. Actually, a couple of cases, we're handling one that's percolating through the appeals process right now where the taxpayer was working from home in 2020 and 2021, because their office in New York was closed, and



00:26:56.030 --> 00:27:21.550

Tim Noonan: the Governor, because the Governor close the office right, the employer close the office. There was no place to go. New York is still saying, sorry, remote work. That's a convenience role convenience. I was working from home for my own convenience. I my office was closed. New York doesn't care. So it's that's frustrating. That that case called those linsky cases the lead case that's working its way through the appeals process. Interestingly, you might have heard that New Jersey.



00:27:21.750 --> 00:27:51.229

Tim Noonan: who has always historically sort of taken it on the chin, right? Someone remote working in New Jersey who lives in New Jersey or their New York employer. They paid New York tax in New Jersey would give the credit for the taxes paid to New York. So again, New Jersey wasn't getting anything really from that resident taxpayer. They haven't changed that. So New Jersey is still willing to give a credit for remote work days. What they have said is that they're gonna do the opposite right? If there's the opposite situation where someone's remote working in New York.



00:27:51.842 --> 00:28:05.019

Tim Noonan: for their New Jersey employer, New Jersey, says we're we're gonna take that income now. They used to not do that. But the other interest is interesting. Thing, they said, is that if you sue New York, New Jersey resident taxpayer and you win



00:28:05.710 --> 00:28:31.329

Tim Noonan: when you come back to. If you do that, you gotta go back and you gotta give it to New Jersey, anyway, right? Because you took a credit for the taxes you paid to New York. If New York gives you your money back, you owe it to New Jersey, New Jersey, has said, if you do that, you only have to pay back half of the tax. Pretty interesting, right? They're they're almost spurring on people to sue New York to fight New York on the convenience rule and again, if you do that, the kicker is New Jersey only requires you to pay back half of it.



00:28:31.601 --> 00:28:57.269

Tim Noonan: Or you get a credit for you. You basically get a credit for half of the tax you pay to New York. So again, the dollars gotta work right? There's a lot of machinations that have to happen for someone to fight New York. Get a refund, go back to New Jersey like there's a lot right? So the dollars have to be pretty big. We have some clients who are interested in it. It's pretty cool. Connecticut is thinking about doing the same thing. So keep that in mind again. My view is



00:28:57.590 --> 00:29:09.750

Tim Noonan: there already. Is this lead Zelensky case out there. If if the taxpayer wins that case again where he's saying my office is closed, you know I couldn't go. And again, we have a similar case that's working its way through.



00:29:09.820 --> 00:29:19.120

Tim Noonan: Then I think the floodgates will open for people whose offices were closed at least to to go ahead and get refunds, and in that case they could take advantage of this New Jersey program



00:29:19.673 --> 00:29:20.660

Tim Noonan: and then



00:29:20.920 --> 00:29:39.690

Tim Noonan: the only other thing I'd say with non residents always be mindful that non residents again don't pay tax on non sourced income. So interest, income capital gains income. In the hedge fund context, we see this with carried interest carried. Interest is not just like it is federally, it's not ordinary income. It's not sourceable income for New York State purposes. So



00:29:40.150 --> 00:29:50.669

Tim Noonan: that's a quick half hour. Guys. Thanks for joining again. All my contact information is here. So, as as I said at the outset, feel free to ping me with the caller email, if you guys have questions and thanks everybody for listening.



00:29:51.140 --> 00:30:19.860

Jonathan Shenkman: Great. Thank you so much, Tim. If anyone has any specific questions, new business opportunities there, any other issues I'd like to discuss. Please feel free to reach out directly to Tim or myself where appropriate, and I'll be sure to include his contact information in the follow up email of this program. As I mentioned at the onset, the goal of these programs stay up to date on timely wealth management, related topics, and to collaborate where appropriate. I think we can all agree that the clients were best prepared, or the ones who are served by by team of knowledgeable advisors. 3 more quick items before I let you go first. My spring Webinar.



00:30:19.860 --> 00:30:44.850

Jonathan Shenkman: Our series continues on May sixteenth, on the topic of unraveling the challenges in estate, planning, navigating copyright law and preserving Creator, content featuring Mark Mustal and Michelle Yang, both of New York City based law firm off at Kerman. This program is for Cp. And Clae credit, and I'll send that invitation to this program in the coming days. In the meantime, if you have a friend colleague, a client who like to be notified.



00:30:44.850 --> 00:31:09.630

Jonathan Shenkman: My upcoming webinars. They can email me with the word webinar and the subject line. And I'll add them to my webinar distribution list. My email is Jonathan at Parkbridge, Wealthcom. Second, you could follow all my work on Twitter and Instagram at Jonathan on money. You could also listen to my weekly podcast called Jonathan on money which is available on apple spotify or wherever you get your podcast and you can watch my new daily financial planning videos by following me on Youtube, at Jonathan, on money as well.



00:31:09.630 --> 00:31:18.379

Jonathan Shenkman: And third, please take 30 s to fill out my survey at the end of this program. It helps me improve my webinars and provide timely and interesting content to attendees.



00:31:18.380 --> 00:31:24.999

Jonathan Shenkman: I thank you in advance for that. And with that this concludes today's session, please stay safe and healthy, and have a wonderful day. Everybody.