New York Utilizing Electronic Data Records for Tax Audits

Taxpayers claiming residency outside of New York while maintaining ties to New York, such as an apartment, room, or other ties in New York, may be exposing themselves to a New York tax audit.  In general, the taxpayer has the burden of demonstrating by clear and convincing evidence that the taxpayer was not present in New York for more than 183 days.

With today’s available technology electronic records are readily accessible to provide evidence which reflects the days the taxpayer is in New York.  Examples of the records the New York State Department of Taxation and Finance (“DTF”) requests includes credit card/bank statements, EZ pass toll invoices, travel itineraries, personal calendars, etc.  Even simply logging onto an employee computer terminal leaves evidence of your whereabouts.

The DTF regularly requests records directly from electronic data sources in an effort to refute days where the taxpayer has contended that s/he was not present in New York on a given day.  For example, the DTF may request cell phone records directly from the service provider; each outbound and inbound call requires a connection to a cell phone tower, which may be used to triangulate the taxpayer’s position on any given day.

The use of electronic data records to prove residency requires taxpayers to exercise due diligence to insure that they are aware of their days present in New York.