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Ernst & Young LLP’s employment tax and risk controversy professionals have observed a consistent increase in payroll tax audits initiated by the New York State Department of Taxation and Finance (Department). Currently, specific industry sectors appear to be the target, in particular financial services, pharmaceuticals, and media and entertainment.
In this special report, we explain the key areas of focus in a New York payroll tax audit, the data employers are requested to provide the Department, the testing scenarios that are used to detect potential tax underpayments and reporting errors and what businesses can do to prevent costly audit findings.