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SALT TALK: 2016: When is a Day Not a Day?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 4, 2016 4:44:58 PM
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For those of you who have been following my blog (this is post number 17), you know that one way to be taxed as a resident in New York State and/or NYC (collectively referred to as NY) is to be a statutory resident.  One must have a permanent place of abode (PPA) and be present in NY for more than 183 days.

It’s time to move on from discussing the PPA and talk about something that seems easier to comprehend: what constitutes a day in NY for the purpose of the statutory residency test. Before we get to the nitty gritty on days, the most important point to understand is that the burden of proof rests with you.

In other words, it is most certainly not the responsibility of the taxing authorities to show you were in NY, but your responsibility to show you were not. How does one meet this burden? The starting point is clearly to keep a contemporaneous calendar. Those with a PPA bear the unfortunate responsibility of needing to track their daily whereabouts.

It is crucial to back up your calendar with as much third party documentation as possible. This documentation includes credit card charges, ATM withdrawals, country club charges, travel records, employee expense reports, and more. We stress to our clients that the time to gather these records is as the expenses are occurring.

The more you can verify the veracity of your contemporaneous calendar, the more credence the auditor gives the calendar. The documentation goes a long way in establishing patterns of behavior and acceptance of the taxpayer’s word (or calendar) as to undocumented days.

We will discuss further what constitutes a day and the nuances involved in counting, but the most important takeaway is to be prepared, contemporaneously. Save receipts. Establish good habits at the start of the year. 

If you are uncertain about how to keep a calendar, contact me at wberkowitz@berdonllp.com.

Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.

Topics: SALT TALK

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