Department of Taxation and Finance

Compliance Efforts for the Withholding Tax Program

Employers in New York State are required to withhold State income taxes from their employees' wages and remit the withheld taxes to the Department of Taxation and Finance. We examined the procedures used by the Department to ensure that employers comply with these requirements. We found that significant improvements have been made in Department audits designed to identify noncompliance with the requirements. For example, between 1989 and 1997, the tax assessments resulting from withholding tax audits rose from $5.9 million to $27.9 million. We identified several reasons for these improvements, including an increase in the number of audit staff, the development of a withholding tax database, the establishment of more effective audit selection techniques and the use of performance measurements.

For a complete copy of Report 97-S-17 click here.
For a copy of the 90-day response click here.