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Moving From A High-Tax State? Be Prepared For A Residency Audit

Moving From A High-Tax State? Be Prepared For A Residency Audit
Photo Credit: GLOBALICA by Wolfgang Wildner by Wolfgang Wildner is licensed under Flickr CC BY-ND 2.0
The thought of moving to a lower-tax state is more prevalent than ever in light of the federal Tax Cuts and Jobs Act and its restrictive $10,000 cap on state tax deductions.

Intending to change residences to a taxpayer-friendlier state through the ownership or rental of a second home, bewareIt’s complicated, and they will have a target on their backs.

Residency audits can be invasive, long, arduous and document-intensive, and the rules are getting more complicated.  The burden of proof in a residency audit remains on the taxpayer.

For the purpose of the 183-day test, New York is now using a whole new set of high-tech tools to track the number of days a taxpayer is present in the state.  Auditors now rely heavily on:
 
  • Cell phone tracking, which can reveal not only where calls are made and received, but in some cases track data even when you are not using your phone
  • EZ Pass records
  • Credit card statements
  • Flight occupancy records
  • Wwipe cards
  • Doctor’s records and
  • Even social media feeds are also used to demonstrate that a taxpayer was present in New York. Further, the tax department can subpoena many of these records.

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Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

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