I just received a bill from the New York State Department of Taxation and Finance. It is for the tax year ending 12/31/90. I haven't lived in NY since 1994, which is the last year I filed taxes there.

The notice says my original tax amount was $871 and I paid $661. They are now trying to collect the difference of $210 plus interest and penalities bringing the total bill to $1629.93. I don't have any of my records from that time and they have enclosed nothing to "prove" I owed the additional amount originally. I have never received any correspondence from them before. Is there a statute of limitations for collecting additional taxes and assessing interest and pentalties? Do they have any jurisdiction over me since I live in another state? Thanks for your help!

asked 09 Dec '10, 23:47

Angie's gravatar image

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edited 10 Dec '10, 02:28

Bill-EA's gravatar image


They may well have jurisdiction over, even if only through a back door. If you fail to work something out with them they will likely issue a collection notice and they can quite likely seize your other refunds, among other things.

I do not know about NY, but the IRS and Maryland have a 10-year collection statute. That clock starts ticking the day the return is filed (or due) and entered into their system. So if you filed your 1990 return on 02/01/91 the due date would be 04/15/91 and the 10-year statute to collect would end on 04/15/2001. If you extended your return and it was originally due by 10/15/91 then they would have until 10/15/2001 to collect, assuming they also have a 10-year statute of limitations on collection.

ON the other hand, if you failed to file and they prepared a Substitute for Return (what we pros call an SFR) then the statute hasn't started to run because you never filed a return.

You also need to factor in anything that would have "tolled" the statute. Tolling happens when you do something that causes the statute of limitations to get suspended. For example, in some cases leaving the jurisdiction can cause the statute to toll - so if you left NY in 1994, with 7 years left on the statute of limitations, you could return today and the state could get another 7 years from the time you return to collect. There are other things that could toll the statute, but leaving is the most likely to impact your situation.

Of course, this all assumes that you filed a return, failed to pay all you owed and NY uses a 10-year statute. You really should find a local tax pro and look into the matter before you do anything.

Many jurisdictions are so hurting for funds that they are becoming exceptionally aggressive in their attempts to collect what they think they owe. I've states, and the IRS, fail to abate penalties simply because they are not required by law to abate them - when in the past they have easily abated penalties for good reasons. Most penalty abatement provisions are done at the discretion of the Commissioner or Comptroller or whomever is in charge of taxation for the jurisdiction in question.

Frankly, my prediction (as I gaze into my crystal ball) is that we can look forward to more aggressive assessment and collection tactics from all the jurisdictions going forward. While this started as a result of the economy, unemployed and underemployed don't pay tax like they used to, once the authorities get used to collecting you can be they will continue later on. Its even likely that some politician later on will claim a budget surplus as a result of taxes collected via an aggressive campaign.

I'd suggest you find a local Enrolled Agent - EAs specialize in taxpayer representation - in your area and arrange for a consultation (NOTE - expect to pay for this, we need to eat too). Sadly, what you may find is that it will be cheaper to pay NY than to fight them.

Good luck, and do keep us updated on what happens.


answered 13 Dec '10, 19:57

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Asked: 09 Dec '10, 23:47

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Last updated: 07 Feb '11, 22:22