The New York Division of Tax Appeals ("Division") in In the Matter of Top Drawer Custom Cabinetry Corp., DTA No. 825588, recently held that a taxpayer who signed a consent to use a test period audit methodology was bound by the consent and waived its right to a detailed audit of the entire period. In November 2010, New York began a sales and use tax audit of Top Drawer Custom Cabinetry Corp. ("Top Drawer"). During the audit, New York determined the sales records provided by Top Drawer were adequate to conduct the audit. In December 2010, Top Drawer's president entered into a test period agreement with New York, which provided in part:
When my records are complete and available for the entire audit period, the Tax Department may not determine my tax based upon a test period audit without my consent. However, if I find that it may be practical to use the test period method audit, I may agree to use such method by comp[l]eting this form. [...]The agreement contained boxes that had been checked to show that the parties had agreed the test period method could be used for the audit of sales and recurring expense purchases. The Division used the test period method to audit the sales and expense purchases for a three-month test period and asserted $67,447.20 of tax, plus interest, due for the three-year audit period. Top Drawer appealed the determination. It argued that despite the signed consent, New York should have conducted a detailed audit because adequate books and records were available to the auditors. It believed a detailed audit would have resulted in decreased tax liability.
The Tax Department representative has explained to me the various audit methods listed above. If the auditor determines that my books and records are both complete and adequate, I agree the audit should be conducted using a test period method audit. It is understood that this agreement is contingent upon the adequacy of my records and pertains to the audit method to be used. It does not preclude my protest of the audit results on grounds such as the particular test period selected, the inclusion of certain transactions within the test, the taxability of certain transactions, or the method of projecting the results of the test period findings. The Commissioner of Taxation and Finance enters into this agreement on the assumption that my books and records, including computer files, are complete and adequate. [Emphasis in original]
Warren Whitaker, Dina Kapur Sanna and Carl Merino co-authored a 2021 update to the white paper, entitled "U.S. Tax Planning for Non-U.S. Persons, Assets and Trusts - An Introductory Outline."
Of Counsel Michael Pfeifer served on the panel, "Integrated Asset Protection," a webinar hosted by Respada on July 29.
Christopher Voukides is a speaker at the Trusts & Estates End of Year Review 2021 sponsored by the Boston Bar Association on June 21.
Scott Clark, Chair of Day Pitney’s Multistate Tax Practice, is presenting on a virtual panel at the Anchin Executive Forum titled, “The Changing Shape of Business in New York” on June 9.
Andrew M. Nerney and Stephanie Eassa Rapp co-authored the article, "Till Death (And Qualified Trusts) Do Us Part," published by WealthManagement.com.
Day Pitney was U.S. legal counsel to GSB Capital, LLC in its multi-country launch of the GSB Equity Long Short Fund.
Day Pitney Press Release
Day Pitney Press Release
Andrew M. Nerney and Stephanie Eassa Rapp co-authored the article, “With Great Powers (of Appointment) Come Great Responsibility,” published by WealthManagement.com.
Scott Brian Clark’s arrival to the firm was featured in Reuters’ column, Career Tracker: Lawyers on the Move.