New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter I - Franchise and Certain Business Taxes › Subchapter D - Corporate Tax Procedure And Administration › Part 39 - Recordkeeping › Section 39.1 - Recordkeeping

Current through Register Vol. 46, No. 28, July 10, 2024
(a) General.
(1) Every taxpayer must keep complete and
				  adequate records as may be necessary in order to determine the proper tax
				  and/or fee due and/or to determine the information required to be reported.
				  Such records must be retained so long as they may be or may become material in
				  the administration of article 9, 9-A, 13, 32, 33 or 33-A of the Tax Law. The
				  term taxpayer as used in this section means a person, within the meaning of
				  section 1080 (b)(3)  of the Tax Law,
				  subject to a tax and/or fee imposed by article 9, 9-A, 13, 32, 33 or 33-A of
				  the Tax Law and/or required to file a return of information as provided for by
				  any such article.
(2) Every
				  taxpayer must keep permanent books of account or records, including inventories
				  and other pertinent data, as are sufficient to establish the amount of
				  receipts, premiums, gross income, assets, capital, gain, loss, deductions,
				  credits or other matters required to be shown by such taxpayer in any report or
				  return required by any such article. Such records must be dated, legible and
				  maintained and preserved in such manner as to disclose in readily accessible
				  and verifiable detail the basis and accuracy of the entries reported. All
				  retained records must be clearly labeled and should be stored in a secure
				  environment. A taxpayer may elect to retain records as hard-copy records,
				  electronic records, or both. See Part 2402 of this Title for taxpayer record
				  retention formats. Additional requirements are provided for in subdivision (b)
				  of this section for taxpayers which maintain or process records on an Automated
				  Data Processing (ADP) system. References to ADP systems include all accounting
				  systems and/or financial systems and subsystems which process all or part of a
				  taxpayer's transactions, records or other pertinent data by other than manual
				  methods.
(3) A taxpayer may retain
				  the records described in paragraph (2) of this subdivision, that are created or
				  received in the ordinary course of business, on microfilm (including
				  microfiche) provided the following requirements are met:
(i) the procedures governing the
				  establishment of a microfilm system and the individuals who are responsible for
				  maintaining and operating the microfilm system, with appropriate authorization
				  from the Board of Directors, general partner(s), or owner, whichever is
				  applicable, must be set forth in writing;
(ii) the microfilm system must be complete
				  and must be used consistently in the regularly conducted activity of the
				  business;
(iii) procedures with
				  appropriate documentation must be established so the original document can be
				  followed through the micrographic system;
(iv) internal procedures for inspection and
				  quality assurance must be established;
(v) the taxpayer is responsible for the
				  effective identification, processing, storage, and preservation of microfilm,
				  making it readily available for as long as the contents may become material in
				  the administration of article 9, 9- A, 13, 32, 33 or 33-A of the Tax
				  Law;
(vi) a record must be kept of
				  where, when, by whom, and on what equipment the microfilm was
				  produced;
(vii) when displayed on a
				  microfilm reader (viewer) or reproduced on paper, the material must exhibit a
				  high degree of legibility and readability. For this purpose, legibility is
				  defined as the quality of a letter or numeral that enables the observer to
				  identify it positively and quickly to the exclusion of all other letters or
				  numerals. Readability is defined as the quality of a group of letters or
				  numerals being recognizable as words or complete numbers;
(viii) a detailed index of all microfilmed
				  data must be maintained and arranged in a manner that permits the immediate
				  location of any particular record; and
(ix) the taxpayer must make available upon
				  request a reader/printer in good working order at the examination site for
				  reading, locating and reproducing any record maintained on microfilm.
(4) Every taxpayer should make
				  periodic checks on all records being retained for use by the Department of
				  Taxation and Finance. If any records required to be retained are subsequently
				  lost, destroyed, damaged, or found to be incomplete or materially inaccurate,
				  the taxpayer must recreate the files within a reasonable period of
				  time.
(5) Every taxpayer must make
				  available to the Department of Taxation and Finance upon request any records
				  described in this section, together with tax returns, including supporting
				  schedules, filed with the Federal government, and supporting documents related
				  thereto. Additionally, every taxpayer must provide the representative of such
				  department with suitable facilities for conducting an audit or
				  examination.
(6) The Commissioner
				  of Taxation and Finance may enter into an agreement with a taxpayer to modify
				  or waive any or all of the specific requirements of this section if hardship is
				  shown in an application filed pursuant to this paragraph and the recordkeeping
				  under such agreement permits the taxpayer and the department to accurately
				  determine the taxpayer's tax liability. Such taxpayer remains subject to all
				  requirements of this section that are not specifically modified or waived by
				  such agreement. A request for modification or waiver shall be in writing and
				  must be filed at least 90 days before the beginning of the taxable year for
				  which such modification or waiver is requested. In determining whether hardship
				  has been shown, the principal factor to be taken into account will be the
				  amount by which the cost of recordkeeping in accordance with this section
				  exceeds the cost of recordkeeping employed or proposed to be employed by the
				  taxpayer. Additional factors to be considered include, but are not limited to:
				  the presence of a pre-existing agreement between the taxpayer and the Internal
				  Revenue Service regarding record retention for Federal income tax purposes and
				  any unusual circumstances. If the commissioner grants a modification or waiver,
				  the commissioner shall specify the period of time to which it applies and shall
				  also prescribe the method of recordkeeping to be utilized.