Friday, March 22, 2013

S4307-2013 - NY Senate Open Legislation - Suspends the income ...

S4307-2013 Actions

  • Mar 20, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S4307-2013 Memo

BILL NUMBER:S4307  TITLE  OF  BILL:    An act to amend the tax law and the administrative code of the city of New York, in relation to suspending the income tax refund  statute  of  limitations  for  individuals  due  to  financial disability  Purpose of Bill:  The  bill  would  suspend  (toll)  the  statute  of limitations for an "individual taxpayer" who to file a claim for an income tax credit  or refund  during  a period when an individual is unable to manage his or her financial affairs due to a severe physical  or  mental  impairment ("financial disability").  Summary of provisions:  Section  1  of  the  bill  would  re-letter  current subsection (k) of section 687 of the Tax  Law  to  be  subsection  (l)  and  add  a  new subsection (k).  Proposed paragraph (1) of new subsection (k) would suspend the statute of  limitations  for  an  "individual  taxpayer" to file a claim for a state or local income tax credit or refund during any period when that individual is "financially disabled?." An individual  taxpayer  is  an individual who is subject to any State or local personal income tax or surcharge administered by the Commissioner of Taxation and Finance.  Proposed  paragraph  (2)  of  new  subsection  (k)  provides  that  an individual taxpayer would be considered "financially disabled"  if  he or she is unable to manage his or her financial affairs by reason of a medically  determinable  physical  or  mental  impairment which can be expected to result in death or which has lasted or can be expected  to last  for a continuous period of not less than twelve months. Proof of the existence of such impairment would be provided  in  the  form  and manner required by the Commissioner of Taxation and Finance.  Proposed  paragraph  (3)  of  new  subsection  (k)  provides  that  an individual taxpayer would  not  be  treated  as  financially  disabled during  any period that the individual's spouse or any other person is authorized to act on behalf of such individual in financial matters.  Section 2 of the bill provides that  a  similar  new  subdivision  (k) would  be  added  to section 11-1787 of the Administrative Code of the City of New York for purposes of the New York City personal income tax on residents.  Section 3 of the bill provides that it would take effect  immediately, and apply to periods of financial disability commencing before, on, or after  the  date  of  enactment,  but would not apply to any claim for credit or refund that without regard to this bill, would be barred  by the operation of any law or rule of law (including res judicata) as of the  date  of  enactment.  Therefore,  these  provisions  would not be applicable to claims for which the statute of limitations  to  file  a claim  for  a  credit or refund has expired, or where there has been a final decision on the merits of the claim as of the date of enactment.   Existing law:  This  bill  would amend the Tax Law and the Administrative Code of the City of New York to include provision's similar to section 6511(h)  of the  Internal Revenue Code. This would allow the statutory time period to file a claim for a credit or refund of state and local income taxes to be suspended (tolled) during a period when an  individual  taxpayer is  "financially  disabled"  which  is  not currently permitted in New York.  Prior Legislative history:  This is a new proposal.  Statement in support:  In the United States Supreme Court case of US v Brockamp, 518 U.S. 347 (1997), the taxpayers were disabled  by  senility  or  alcoholism  and failed  to  file  timely  federal  refund  claims.  The  Supreme Court rejected the argument that the refund statute of  limitations  in  the Internal  Revenue  Code  could  be  tolled  for equitable reasons. The Internal Revenue Code was subsequently amended by adding a  subsection (h)  to  section  6511  to  allow  for  tolling of time for individual taxpayers to file a claim for credit or refund when they are unable to take care of their financial affairs because of  a  severe  mental  or physical impairment.  Because the New York personal income tax refund statute of limitations provisions  in  section 687 of the Tax Law (and the similar provisions in section 11-1787 of the Administrative Code of the City of New York) were not similarly amended to include the equitable tolling provisions of section 6511(h) of the Internal Revenue Code, the  holding  in  the Brockamp  case  is  still  good  law  in New York. The New York refund statute  of  limitations  provisions  are  among  various  income  tax procedural  provisions  derived  from comparable federal provisions in order to "avoid injustices resulting from differing Federal and  State remedies   where   the  substantive  law  is  similar  or  identical." (Memorandum of State Department of Taxation and  Finance  for  Chapter 1011  of  the Laws of 1962.) Therefore, the New York refund statute of limitations provisions should be amended to include equitable  tolling provisions  similar  to  the  federal  provisions  since  it  would be equitable for New York personal income taxpayers to be  able  to  take advantage  of  the same equitable tolling provisions available to them on the federal level.  Budget implications:  It is estimated that this bill will result in a decrease  of  $750,000 in revenue for SFY 2013-14.  Local Impact:  None.  Effective Date:  The bill would take effect immediately.   

S4307-2013 Text

 S T A T E   O F   N E W   Y O R K  
4307 2013-2014 Regular Sessions I N SENATE March 20, 2013
Introduced by Sen. MARCELLINO -- (at request of the Department of Taxa tion and Finance) -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations

AN ACT to amend the tax law and the administrative code of the city of New York, in relation to suspending the income tax refund statute of limitations for individuals due to financial disability THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM BLY, DO ENACT AS FOLLOWS:

Section 1. Subsection (k) of section 687 of the tax law is relettered subsection (l) and a new subsection (k) is added to read as follows:
(K) RUNNING OF PERIODS OF LIMITATION SUSPENDED WHILE TAXPAYER IS UNABLE TO MANAGE FINANCIAL AFFAIRS DUE TO DISABILITY. -- (1) IN THE CASE OF AN INDIVIDUAL TAXPAYER, THE RUNNING OF THE PERIODS SPECIFIED IN SUBSECTIONS (A), (B), AND (C) OF THIS SECTION SHALL BE SUSPENDED DURING ANY PERIOD OF SUCH INDIVIDUAL'S LIFE THAT SUCH INDIVIDUAL IS FINANCIALLY DISABLED. FOR PURPOSES OF THIS SUBSECTION, AN INDIVIDUAL TAXPAYER IS AN INDIVIDUAL WHO IS SUBJECT TO ANY STATE OR LOCAL PERSONAL INCOME TAX OR SURCHARGE ADMINISTERED BY THE COMMISSIONER. (2) FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBSECTION, AN INDIVIDUAL TAXPAYER IS FINANCIALLY DISABLED IF SUCH INDIVIDUAL IS UNABLE TO MANAGE HIS OR HER FINANCIAL AFFAIRS BY REASON OF A MEDICALLY DETERMINABLE PHYS ICAL OR MENTAL IMPAIRMENT OF THAT INDIVIDUAL WHICH CAN BE EXPECTED TO RESULT IN DEATH OR WHICH HAS LASTED OR CAN BE EXPECTED TO LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN TWELVE MONTHS. AN INDIVIDUAL SHALL NOT BE CONSIDERED TO HAVE SUCH AN IMPAIRMENT UNLESS PROOF OF THE EXIST ENCE THEREOF IS FURNISHED IN SUCH FORM AND MANNER AS THE COMMISSIONER MAY REQUIRE. (3) AN INDIVIDUAL TAXPAYER SHALL NOT BE TREATED AS FINANCIALLY DISA BLED DURING ANY PERIOD THAT SUCH INDIVIDUAL'S SPOUSE OR ANY OTHER PERSON IS AUTHORIZED TO ACT ON BEHALF OF SUCH INDIVIDUAL IN FINANCIAL MATTERS. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09096-01-3

S. 4307 2

S 2. Subdivision (k) of section 11-1787 of the administrative code of the city of New York is relettered subdivision (l) and a new subdivision (k) is added to read as follows:
(K) RUNNING OF PERIODS OF LIMITATION SUSPENDED WHILE TAXPAYER IS UNABLE TO MANAGE FINANCIAL AFFAIRS DUE TO DISABILITY. (1) IN THE CASE OF AN INDIVIDUAL TAXPAYER, THE RUNNING OF THE PERIODS SPECIFIED IN SUBDIVI SIONS (A), (B), AND (C) OF THIS SECTION SHALL BE SUSPENDED DURING ANY PERIOD OF SUCH INDIVIDUAL'S LIFE THAT SUCH INDIVIDUAL IS FINANCIALLY DISABLED. FOR PURPOSES OF THIS SUBDIVISION, AN INDIVIDUAL TAXPAYER IS AN INDIVIDUAL WHO IS SUBJECT TO THE TAX IMPOSED UNDER THIS CHAPTER. (2) FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION, AN INDIVIDUAL TAXPAYER IS FINANCIALLY DISABLED IF SUCH INDIVIDUAL IS UNABLE TO MANAGE HIS OR HER FINANCIAL AFFAIRS BY REASON OF A MEDICALLY DETERMINABLE PHYS ICAL OR MENTAL IMPAIRMENT OF THAT INDIVIDUAL WHICH CAN BE EXPECTED TO RESULT IN DEATH OR WHICH HAS LASTED OR CAN BE EXPECTED TO LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN TWELVE MONTHS. AN INDIVIDUAL SHALL NOT BE CONSIDERED TO HAVE SUCH IMPAIRMENT UNLESS PROOF OF THE EXISTENCE THEREOF IS FURNISHED IN SUCH FORM AND MANNER AS THE COMMISSIONER OF TAXATION AND FINANCE MAY REQUIRE. (3) AN INDIVIDUAL TAXPAYER SHALL NOT BE TREATED AS FINANCIALLY DISA BLED DURING ANY PERIOD THAT SUCH INDIVIDUAL'S SPOUSE OR ANY OTHER PERSON IS AUTHORIZED TO ACT ON BEHALF OF SUCH INDIVIDUAL IN FINANCIAL MATTERS.

S 3. This act shall take effect immediately and shall apply to periods of financial disability commencing before, on, or after the date this act shall have become a law, but shall not apply to any claim for credit or refund that (without regard to this act) is barred by the operation of any law or rule of law (including res judicata) as of the date this act shall have become a law.


Source: http://open.nysenate.gov/legislation/api/1.0/html/bill/S4307-2013

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