Bill Text: NY S07064 | 2011-2012 | General Assembly | Introduced
Bill Title: Clarifies the recordkeeping requirements for the earned income tax credit and the enhanced earned income tax credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-04-26 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S07064 Detail]
Download: New_York-2011-S07064-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7064
I N S E N A T E
April 26, 2012
___________
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to clarifying the recordkeeping
requirements for the earned income tax credit and the enhanced earned
income tax credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subsection (d) of section 606 of the tax law is amended by
2 adding a new paragraph 8 to read as follows:
3 (8) RECORDKEEPING. IN ADDITION TO ANY OTHER REQUIREMENT SET FORTH IN
4 THIS CHAPTER, ANY TAXPAYER PAID PRINCIPALLY IN CASH WHO IS CLAIMING THE
5 EARNED INCOME TAX CREDIT PURSUANT TO THIS SUBSECTION SHALL COMPLY WITH
6 THE RECORDKEEPING REQUIREMENTS SET FORTH IN SECTION SIX HUNDRED
7 FIFTY-EIGHT-A OF THIS ARTICLE WHEN APPLICABLE.
8 S 2. Subsection (d-1) of section 606 of the tax law is amended by
9 adding a new paragraph 9 to read as follows:
10 (9) IN ADDITION TO ANY OTHER REQUIREMENT SET FORTH IN THIS CHAPTER,
11 ANY TAXPAYER WHO IS CLAIMING THE ENHANCED EARNED INCOME TAX CREDIT
12 PURSUANT TO THIS SUBSECTION SHALL COMPLY WITH THE RECORDKEEPING REQUIRE-
13 MENTS SET FORTH IN SECTION SIX HUNDRED FIFTY-EIGHT-A OF THIS ARTICLE
14 WHEN APPLICABLE.
15 S 3. The tax law is amended by adding a new section 658-a to read as
16 follows:
17 S 658-A. INCOME DOCUMENTATION CONCERNING THE EARNED INCOME TAX CREDIT.
18 IN CONJUNCTION WITH THE REQUIREMENTS SET FORTH IN THIS CHAPTER, THE
19 PROVISIONS OF THIS SECTION SHALL APPLY TO ANY TAXPAYER CLAIMING THE
20 EARNED INCOME TAX CREDIT AS SET FORTH IN SUBSECTION (D) OF SECTION SIX
21 HUNDRED SIX OF THIS ARTICLE:
22 (A) INCOME DOCUMENTATION STANDARDS FOR CASH EARNERS. IF THE TAXPAYER
23 IS EMPLOYED IN ONE OR MORE JOBS WHERE SUCH TAXPAYER IS PAID PRINCIPALLY
24 IN CASH, SUCH TAXPAYER MAY PROVE HIS OR HER INCOME BY PRODUCING ONE OF
25 THE FOLLOWING VERIFICATIONS:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14717-04-2
S. 7064 2
1 (1) "PERMANENT BOOKS OR RECORDS" ARE PAPER OR ELECTRONIC DOCUMENTS
2 THAT REFLECT THE AMOUNT AND SOURCE OF ALL INCOME EARNED FROM PAID
3 EMPLOYMENT.
4 (2) EXAMPLES OF "PERMANENT BOOKS OR RECORDS" INCLUDE BUT ARE NOT
5 LIMITED TO:
6 (A) STATEMENTS FROM FINANCIAL INSTITUTIONS REFLECTING DEPOSITS OF
7 MONEY EARNED;
8 (B) ELECTRONIC LEDGERS OR SPREADSHEETS; OR
9 (C) HANDWRITTEN ACCOUNTS MAINTAINED IN A BOUND LEDGER.
10 (3) A DIFFERENT LEDGER SHOULD BE MAINTAINED FOR EACH TAX YEAR'S CASH
11 EARNINGS RECORDS, AND EACH RECORD SHALL BE MAINTAINED FOR AT LEAST THREE
12 YEARS AFTER THE TAX YEAR FOR WHICH IT WAS SUBMITTED.
13 (B) ENTRY REQUIREMENTS FOR HANDWRITTEN LEDGERS. (1) SUCH RECORD SHALL
14 INCLUDE, IN CHRONOLOGICAL ORDER, AN ENTRY FOR EACH TRANSACTION FOR WHICH
15 SUCH TAXPAYER EARNS MONEY WITH INFORMATION THAT INCLUDES, BUT IS NOT
16 LIMITED TO:
17 (A) THE AMOUNT OF MONEY EARNED;
18 (B) THE APPROXIMATE TIME AND DATE ON WHICH THE MONEY WAS EARNED OR
19 RECEIVED;
20 (C) THE PORTION OF THE MONEY RECEIVED, IF ANY, THAT WENT TO THE
21 TAXPAYER'S EMPLOYER;
22 (D) A BRIEF DESCRIPTION OR LIST OF THE TASK OR TASKS PERFORMED FOR THE
23 MONEY EARNED.
24 (2) SUCH RECORD MAY INCLUDE ENTRIES FOR WORK-RELATED EXPENSES AND EACH
25 SUCH ENTRY MAY INCLUDE, BUT NOT BE LIMITED TO THE:
26 (A) AMOUNT OF THE WORK-RELATED EXPENSE;
27 (B) APPROXIMATE TIME AND DATE THE WORK-RELATED EXPENSE WAS INCURRED;
28 (C) NATURE OF THE WORK-RELATED EXPENSE; AND
29 (D) DATE ON WHICH THE ENTRY WAS MADE.
30 (3) AN ENTRY FOR ANY TRANSACTION SHALL BE MADE AS SOON AS POSSIBLE
31 AFTER THE TRANSACTION OCCURRED; PROVIDED, HOWEVER, THAT A CORRECTION TO
32 AN ENTRY SHALL NOT BE INVALID IF IT IS MADE MORE THAN THIRTY DAYS AFTER
33 THE TRANSACTION FOR WHICH SUCH ENTRY WAS MADE.
34 (C) ADDITIONAL ACCEPTABLE INCOME VERIFICATION DOCUMENTS. (1) IN THE
35 ABSENCE OF PERMANENT BOOKS OR RECORDS, A TAX FILER MAY VERIFY INCOME BY
36 PRODUCING TWO OR MORE OF THE FOLLOWING:
37 (A) A SWORN AFFIDAVIT, SIGNED BY THE FILER, STATING: POSITION OR
38 TITLE, NUMBER OF WEEKS WORKED, NUMBER OF HOURS WORKED PER WEEK, THE
39 WAGES EARNED AND A BRIEF DESCRIPTION OF WORK PERFORMED. A SEPARATE NOTA-
40 RIZED AFFIDAVIT SHOULD BE COMPLETED FOR EACH JOB;
41 (B) RECEIPTS FROM WORK SUPPLIES, INCLUDING BUT NOT LIMITED TO:
42 UNIFORMS AND MATERIALS NEEDED TO COMPLETE A SPECIFIC JOB;
43 (C) RECEIPTS FROM LICENSING OR CERTIFICATION FEES, MEMBERSHIP DUES, OR
44 OTHER PROFESSIONAL DUES;
45 (D) RECEIPTS FROM WORK-RELATED EXPENSES, INCLUDING BUT NOT LIMITED TO,
46 TRANSPORTATION COSTS AND CHILD CARE;
47 (E) SIGNED LETTER FROM EMPLOYER STATING WAGES PAID;
48 (F) INCOME AND EXPENSES WORKSHEET COMPLETED WITH A CERTIFIED TAX
49 PROFESSIONAL;
50 (G) RECEIPTS FROM A CHECK CASHER REFLECTING REGULAR RECEIPT OF WAGES;
51 (H) PHOTOCOPIES OF CHECKS, OR PAY ENVELOPS, GIVEN TO THE TAXPAYER AS
52 PAYMENT FOR GOODS OR SERVICES.
53 (D) ERRORS OR OMISSIONS. A DE MINIMIS NUMBER OF OMISSIONS OR FAILURES
54 TO CORRECT ENTRIES SHALL NOT BE SUFFICIENT IN AND OF ITSELF TO RENDER A
55 TAXPAYER'S RECORDS INADEQUATE TO VALIDATE THAT TAXPAYER'S INCOME FOR THE
56 RELEVANT TAX YEAR.
S. 7064 3
1 (E) PRESUMPTION OF ACCURACY AND COMPLETENESS. (1) SO LONG AS THE MINI-
2 MUM REQUIREMENTS SET FORTH IN THIS SECTION ARE MET, AND UNLESS THE
3 DEPARTMENT HAS AFFIRMATIVE EVIDENCE TO DIRECTLY CONTRADICT THE TAXPAY-
4 ER'S RETURN, THE DEPARTMENT SHALL PRESUME THE ACCURACY AND COMPLETENESS
5 OF THE RECORD AND THE GOOD FAITH OF THE TAXPAYER.
6 (2) PROVIDED THE MINIMUM REQUIREMENTS SET FORTH IN THIS SECTION ARE
7 MET, THE PARTICULAR FORMAT OF THE RECORD SHALL NOT BE USED AS EVIDENCE
8 OF INSUFFICIENT RECORDKEEPING OR BAD FAITH ON THE PART OF THE TAXPAYER.
9 (3) PROVIDED THE MINIMUM REQUIREMENTS SET FORTH IN THIS SECTION ARE
10 MET, A MID-YEAR CHANGE IN THE FORMAT OF RECORDKEEPING WITHIN A SINGLE
11 LEDGER SHALL NOT BE CONSIDERED EVIDENCE OF INCOMPLETE RECORDKEEPING OR
12 BAD FAITH IF SUCH CHANGE INDICATES AN ATTEMPT TO IMPROVE UPON RECORD-
13 KEEPING.
14 S 4. This act shall take effect on the one hundred twentieth day after
15 it shall have become a law. Effective immediately, the commissioner of
16 taxation and finance is authorized to make any addition, amendment
17 and/or repeal of any rule or regulation necessary for the implementation
18 of this act on its effective date on or before such date.
