NY Aggressively Auditing Residents Fleeing State, Tracking Social Media, Phone Records

NY Aggressively Auditing Residents Fleeing State, Tracking Social Media, Phone Records

New York is aggressively auditing its wealthy residents attempting to flee the high-tax state for Florida, going so far as to monitor cell phone records, social media use and visits to the veterinarian or dentist, according to CNBC.

The state is facing a $2.3 billion budget deficit, which Governor Andrew Cuomo blames on the change in federal tax laws limiting state and local deductions.

“Tax the rich, tax the rich, tax the rich,” said Cuomo last month. “We did. Now, God forbid, the rich leave.”

Accountant Barry Horowitz told CNBC, “If you’re a high earner in New York and you move to Florida, your chances of a residency audit are 100 percent.  New York has always been aggressive. But it’s getting worse.”

CNBC reports, “New York conducted about 3,000 ‘nonresidency’ audits a year between 2010 and 2017, collecting around $1 billion, according to Monaeo, a company that sells an app for tracking and proving tax residency.”

Tax attorney Mark Klein told the news outlet that his office is working on about 200 tax-residency audits.

“We’re seeing a huge uptick in our practice,” Klein said. “I’m seeing dozens of extremely high-income individuals actually leaving New York.

CNBC notes that New York has an “arsenal” of high tech “weapons” to use in its residency audits.

“Tax experts say the state now can retrieve a taxpayer’s cellphone records to check the location of all the calls they make and receive,” writes CNBC. “Auditors have also checked people’s social media feeds to make sure they are being truthful about their location.”

Auditors are now looking to ensure a taxpayer’s home in New York is smaller and less expensive than their Florida home. They also want to see if taxpayer’s cherished family photos, artwork, etc. were moved to Florida or if they are still in the New York home.

“Having a wealth manager in Florida and a country club membership there is also a must,” writes CNBC.

If taxpayers go to the dentist or take their dogs to a veterinarian in New York, it’s considered a red flag to auditors.

“It’s one thing to seek specialized medical treatment at a New York hospital, ” Klein said. “But auditors know that most people don’t travel to another state for their dentist.”

When it comes to the family dogs, Klein says, “Pets are considered part of your family. So if you want to lose a case very quickly, kennel your dog in New York when you travel.”

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