NYS questioning rental properties as active

[schirallicpa]

Taxpayer had a salaried position in 2021 and did not keep a time sheet and nor did his employer.  Taxpayer owns over 40 rental properties that he spends all of his free time dealing with issues at different places.  This is not passive for him.  But - he does not keep a daily log of his activity.

NYS is wanting a detailed log of his activity and they want to know what hours he worked in 2021 for his former employer - which neither exist.  

This is so very frustrating to me because there is not a single person in his right mind that keeps a daily log of the houses they are doing maintenance on when they have rentals.  Now that he is retired, he has bought more properties and has even more maintenance calls and collection efforts.

Anyway - what's the best way to handle this?  NYS has been hammering taxpayers and I feel this is just too much. 

[Corduroy Frog]

A typical case of some bureaucrat with nothing better to do.  We have these people down here in the Sunny South as well.

Of course, I don't know New York law, but it seems that in lieu of statutory compliance, alternate proof should be acceptable.  From what you tell us, this alternate proof is overwhelming.

I hope you hear from someone familiar with NY.

[G2R]

Not sure how much this might help, but Google being the unasked-for big brother they are often tracks people's location history. If he has a smartphone, he might be able to track each time he went to a rental property to address an issue inside his Google Maps timeline.  In addition, email and phone records are also usually stored in the phone and or via the cell phone/telephone records.  It's a labor intensive process for the client, but if it's req to avoid a major tax implication, it is what it is. 

[Medlin Software, Dennis]

NYS is known for taxing first, asking for proof later. Happened to me as well. This should not be news to anyone who has NYS nexus, so logs should be kept. For the employee part, I would tell them to pound sand, since their own state worker/union family does not require hour tracking for salaried employees.

It remains tough to prove a negative, so one must look at their own situation and make decisions. Such as those who are inactive members of a corp not wanting to trigger employment and tracking what they actually do in case challenged.

Since I am not a believer we still have privacy, I allow google to track me (my phone) at all times. It has been handy for me for several reasons. In the timeline, you can relatively easily search for or see how many times at specific locations, which would likely be a great help for this situation.

[jklcpa]

4 minutes ago, Medlin Software, Dennis said:

I would tell them to pound sand, since their own state worker/union family does not require hour tracking for salaried employees.

 

I've seen this exact issue and asked about where the the auditor doesn't care about the salaried hours directly EXCEPT to be trying to figure out if the taxpayer had enough hours to be considered either a real estate professional or if materially participating after working a F/T salaried position, especially with this many properties, and depending on how each is reported on the returns.  And, no, you do not tell the auditor to pound sand.