ALBANY - If you've received a penalty notice in the mail from the New York State Department of Taxation and Finance and were taken back, it may be because of an error.
Brad Maione, director of the public information office for the state Department of Taxation and Finance, confirmed the department recently issued approximately 9,100 penalty bills for missing wage information for 2009. Of that amount, approximately 20 percent were sent in error, affecting employers who filed a "NYS-45, Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return".
Maione said the error was made, in part, due to confusion over the department recently amending its form regarding employee wage and withholding information.
"Previously, we only contacted employers that neglected to provide this information if they have five or more employees," explained Maione. "We recently amended that and if you have one or more employee and you don't provide this information, you are sent a bill letter by the agency."
The change was made for the department to be able to "gather more information to make sure these returns are accurate and everyone's reporting what they should be."
That, combined with what Maione referred to as a "data entry and scanning error," led to the mix-up, he said.
"We work with several vendors in terms of scanning, processing and keying in these returns," said Maione. "In some cases, about 20 percent or so, issues or problems with keying in the correct information occurs."
Steve Ewing, owner of Flightline Express, a small business which provides refreshments at Plattsburgh International Airport, was one of the 20 percent of people to erroneously receive a penalty notice. Initially, Ewing questioned whether or not he filed his tax paperwork in time or if there was some other error on his part. However, after speaking with his accountant, Timothy McCormick with McCormick and Deon, Plattsburgh, he found that wasn't the case.
"It sounded more like a scam than it was an actual fine," said Ewing. "So, we checked with Tim."
McCormick said he examined the NYS-45 he submitted for Ewing and compared it to the W-2 where there was believed to be a discrepancy and found the error to be on the part of the Department of Taxation and Finance.
"I didn't find any discrepancy on our end, so I called New York State," said McCormick, who said the Department of Taxation and Finance confirmed the error on their part.
In Ewing's case, he was levied a $50 penalty that was ultimately dismissed, he said.
"Imagine if 5,000 people - small business owners - didn't know any different and they're paying $50 a shot," said Ewing. "It concerns me and I'm sure it concerns everybody else. We're very fortunate to have an accountant that we utilize but some folks try to do their own books, so it's even hard for some of them to understand some of this stuff." When asked if the penalty waged against those receiving a letter from the Department of Taxation and Finance was a flat fee or based on a percentage scale, Maione was unable to comment other than to say "each letter is different." Maione did say, however, that if someone feels they've received a penalty notice in error that they should contact the Department of Taxation and Finance immediately.
"We're always looking at our processes... to make sure that only people that should be billed are billed and those aren't are comforted by the fact we're here to help them and to rectify the situation," said Maione. "If you get one of these letters and you believe you're getting one erroneously, there's a mechanism on there to contact the department ... if you receive a bill in error, give us a call."