Katie Jaques <katiej_1958[at]yahoo.com> wrote:

- quote -

I suspect that NYS would claim that the holdup was due to
the return being unacceptable and therefore not their fault.

Seth

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katiej_1958[at]yahoo.com (Katie Jaques) wrote:

- quote -

If the tax return is filed late, the late refund interest
clock does not start on April 15. The claim from the NYS
Department of Finance and Taxation is that returns with the
Use and Sales tax entry blank will be rejected, which means
the late refund interest clock will not start running until
the rejected return is fixed and resubmitted.

--
Vic Roberts

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- quote -

Not sure offhand about when NYS has to pay interest.
But I've had many experiences, especially with NYS non resident tax returns,
that they seem to use any excuse to delay paying a refund.

--
<<< Benjamin Yazersky CPA [NJ & NY] > >
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- quote -

Ben, doesn't NYS have to pay interest on refunds if they
hold them up past a certain point? If so, I doubt that
they'll suspend refunds for a blank use tax line. It would
likely be penny wise, pound foolish <G> .

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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- quote -

Well, I missed the part on page 35. Interesting.

- quote -

I believe the "if you do owe" part is obvious. It is looks
like a duck, then ....

--
Vic Roberts

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- quote -

My guess is that depends on if its a refund return or not.
If the return has a refund, they won't process it if the
sales/use tax line is blank. If its a balance due return,
the safest bet is that NYS will deposit the check. I guess
that means then they will have to process that return.

Long live the NYS Dept of refund prevention !

--
<<< Benjamin Yazersky CPA [NJ & NY] > >
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- quote -

I hate to further complicate this debate, but on closer
examination the instructions are actually contradictory. The
instructions for Form IT-201 do indeed say prominently on
page 36, "If you do not owe sales or use tax, you must enter
'0' on line 56. . . ." However, turn back a page and look at
the box in the bottom right corner of page 35. It says "If
you do not owe any sales or use tax, SKIP LINE 56 and go
directly to the instructions for line 57. . . ." [caps mine]
If you follow that literally, you will turn to page 41,
never see the "you must enter 0" on page 36, and you will
leave line 56 blank.

In any event, there are actually two cases:
(1) You do NOT owe use tax.
(2) You DO owe use tax.

The paragraph above discusses only case 1. The quoted
instructions say "If you do not owe. . . ." You have jumped
to the conclusion that this implies something about case 2,
namely that you must make an entry on line 56. But it
doesn't actually say that. There is no equally prominent "If
you do owe. . . ." Several people in this thread have
offered justifications for leaving line 56 blank for case 2.

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- quote -

Yes, you must enter something on that line in order to meet
the requirement to file a use tax return. The consequence
of leaving the line blank, if I understand what Bruce said,
is that the statute of limitations does not start to run
with respect to the USE TAX. It does not affect the
validity of your INCOME TAX return.

I suspect the DOR will decide what to do about those blank
use tax lines after they see how many of them there are and
figure out how much it is going to cost to follow up on them
.... and how much additional tax they are likely to collect.
Any mass enforcement effort may not be cost effective.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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- quote -

Let me repeat again, the instructions for Line 56 of IT-201
state that you MUST enter a "0" on line 56 if you do not owe
any Sales and Use tax. Where do you get your information
that it is OK to leave Line 56 blank even if you pay your
sales and use tax separately?

--
Vic Roberts

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"Victor Roberts" <Vic[at]Lighting-Research.com> wrote:

- quote -

There are three choices - enter a positive dollar amount,
enter a zero, or leave it blank. Leaving it blank makes NO
statement about use tax liability. It says, in effect, "I
don't want to file a use tax return, and I am prepared to
deal with the consequences." That's how it is different.
The point of the instructions is to point out that there IS
a difference between entering "0" and leaving it blank.
Entering 0 makes an affirmative statement and starts the
statute of limitations. Leaving it blank is equivalent of
not filing a return - no statement, no running of the
statute. I see nothing in the instructions that say they
will reject returns that leave it blank. Others have said
there is no reject code in the efile manuals for this, so it
appears efiled returns will be accepted.

As I said, we were told that the department views this as
filing two separate returns, with separate statutes,
separate jurats, etc. You CAN file one without the other
and they will accept the income tax return and process it.
They said they felt they had no authority NOT to accept the
income tax return where the use tax was not properly
completed.

--
Bruce E. Cobern, CPA
mailto:bec[at]pipeline.com

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- quote -

What they are saying is that if you owe no tax and leave it
blank the return will NOT be processed as a return with 0
use tax and the statute running. In order to start the
statute, and be considered as having filed a use tax return,
you must enter SOMETHING. Leaving it blank is choosing not
to file a use tax return. Their language is to prevent
people from not complying when they think they are.

--
Bruce E. Cobern, CPA
mailto:bec[at]pipeline.com

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- quote -

You still have the option to file a separate use tax return.
You do not have to pay the use tax together with your income
tax. So presumably if you DO owe use tax, but choose to file
and pay it separately, you would leave line 56 blank.

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- quote -

How is that a different statement? If you owe no tax, you
must enter 0. Obviously, if you do owe tax, you'd enter
something. So either way, you MUST enter something on that
line.

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Bruce E. Cobern" <bec[at]pipeline.com> wrote:

- quote -

I was the one who posted the original message about NYS tax
returns being rejected if the Sales and use tax line is left
blank. That information came from my accountant, who said he
learned about this directly from the NYS Department of
Taxation and Finance.

- quote -

How is this different than saying the line cannot be left
blank? The instructions for Form IT-201 do state, on page
36, that "if you do not owe sales or use tax you must [in
bold] enter a "0" on line 56 of Form IT-201. You agree that
the instructions say this. If you DO owe sales or use that
then you must agree that you are obligated to enter the
amount you owe on Line 56. Therefore, what option allows you
to leave this line blank?

--
Vic Roberts

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- quote -

All this brings up an interesting point as regards efiled
returns. I'm thinking that any lines blank or even with a
zero on them are transmitted as a null character, thus
giving no opportunity for an actual "zero".

Cheer$,
Harlan Lunsford, EA n LA

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- quote -

From the NYS Tax booklet: "If you don't owe any sales or use
tax, you *must* enter "0" on the sales or use tax line of
your personal income tax return." (the MUST in emphasis is
NOT mine above, it is bold-faced in the booklet)

--
Regards -

- Andrew

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Harlan Lunsford <lunstax[at]bellsouth.net> wrote:

- quote -

I was going to say that the instructions are clear, but then
I check Form IT-201 (the NYS long form) and feel they are
not so clear. Line 56: "Sales and use tax" says only "see
instructions starting on page 36". When I go to page 36 of
the instructions for IT-201, there is a text box that says:
"If you do not owe sales or use tax you MUST [ in bold not
caps] enter "0" on line 56 of Form IT-201." I thought the
statement about entering "0" was on the form itself, but it
is not. I would think that many people will not read the
instructions for an item that they decide does not apply to
them. Plus, since Form IT-201 does not have the prohibition
against leaving Line 56 blank printed on it, and it is
normal to leave other lines blank, this seems to weaken the
perjury argument if taxpayers sign their Form IT-201 with
Line 56 blank.

Disclaimer .... this is all theoretical. I intend to enter
the NYS-provided fixed $ amount for my income bracket on
Line 56 since I do not have records of my out of state
purchases and all of my out-of-state tax-free purchases have
been less than $1000 (which must be computed separately.)

--
Vic Roberts

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- quote -

Well, I tried to trim more of this, but couldn't figure out how.

My understanding of the NYS position is significantly
different. Having had senior members of the tax department
at both a meeting of the NYS Tax Committee of the NYSSCPA's
AND at a seminar, I came away with different impressions.

First, we were told that, in effect, the IT-201/3 is now TWO
tax returns - an income tax return, and a sales/use tax
return. The department will be treating these separately.

While there is one signature, which is "under penalties of
perjury" (which has always been the income tax jurat), with
respect to the use tax, the signature is NOT under penalties
of perjury, since there is no such statement on sales/use
tax returns.

No mention was made by the state personnel of rejecting the
income tax returns because the use tax line was left blank.
What was stated was that failure to enter a number on that
line would mean that no use tax return was filed, so the
statute of limitations would not begin to run for use tax
purposes. There would be no effect on the SOL for income
tax purposes, since the income tax return was completed,
signed, and filed.

All of this makes sense. Rejecting tax returns does not. I
see nothing in the instructions that says you MUST enter
something on the line. They do say that if you owe NO use
tax, you must enter "0". That's a different statement.

It should be noted that none of this was the idea of the tax
department. This was dumped on them by a single sentence
included in the last NYS budget. They are trying hard to
administer something they didn't ask for and were unprepared
for.

To me, it seems most likely that the state will process all
the returns received, with or without an entry on this line,
but that, as they have stated, the statute of limitations
for use tax collection will not begin to run unless a number
(including 0) has been entered on that line. I, for one,
can not see them returning a significant portion of the
returns they receive (my guess would be almost half the
first year) because this line is left blank. But, then
again, I have seen lots of NYS returns sent back from
processing because of insignificant "errors." However, when
that happens, correction of the error, and return of the
return within the time provided constitutes timely filing.

--
Bruce E. Cobern, CPA
mailto:bec[at]pipeline.com

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- quote -

Ah then, that will work okay. I of course hope the
instructions are to the point so taxpayers can understand,
since natural instincts are to leave a line blank is it's
zero.

Cheer$,
Harlan Lunsford, EA n LA

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- quote -

I heard that rumor also at an AARP/TCE session. My
"research" to date indicates that ...

For electronic filing, there is no error code listed in the
NY booklet that would be associated with such a rejection.

For electronic filing, that field is defined as strictly
numeric, so a blank could not be transmitted.

For paper, TaxWise will explicitly print a zero on that line
while suppressing the printing of zeros on other lines.

For paper, TaxAct will explicitly print a zero on that line
while suppressing the printing of zeros on other lines.

For paper, ATX will either print all zeros or suppress all
zeros as a user preference. The sales tax line has no
special coding.

--
Don EA in Upstate NY

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