New York is tracking down and demanding money from wealthy people who moved their assets to another state to pay less taxes.
'17.04.2024'
Alina Prikhodko
New York is the millionaire capital of the world, but some of them are moving their businesses to low-tax states. According to Business Insider, the state tax department has come up with a great way to get your investment back using AI.
The state Department of Taxation is sending hundreds of thousands of letters generated by artificial intelligence, mainly to high-income freelancers and those who have moved from New York but have not officially changed their tax residence (tax domicile).
The state reported an increase in audits in 2022 and a decrease in the number of auditors. Such letters will help cope with the shortage of specialists, although it is unclear whether this was one of the reasons for their implementation.
Statistics
New York had 2022 audits in 771, according to a report from the state Department of Taxation and Finance. This is 000% more than a year earlier. At the same time, the number of auditors in New York decreased by 56% due to limited budgets.
The Tax Department uses sophisticated technology “to identify the best audit candidates,” with a particular focus on wealthy people who have moved from high-tax states to low-tax states such as Florida or Texas.
On the subject: How to File New York Tax Returns for Free
New York City is home to 340 millionaires, 000 centimillionaires, and 724 billionaires, making it the richest city in the world.
Tax authorities across the United States are using both human auditors and artificial intelligence to examine cell phone records, according to Mark Klein, principal at accounting firm Hodgson Russ LLP. This allows you to find out where taxpayers spend most of their time and therefore where they should pay taxes.
Troubles
The question of location is not uncommon when it comes to taxes. Celebrities and millionaires around the world have gotten into trouble for filing non-domestic returns to reduce their taxes.
One notable example is Shakira, who was fined €24 million (about $26 million) in November over allegations she failed to pay €14,5 million (about $15 million) in Spanish income taxes between 2012 and 2014.
According to the prosecutor's office, during this period Shakira indicated the Bahamas as her main place of residence (tax rates are lower there), although she spent most of her time in Spain.
Shakira, who has consistently denied allegations of tax fraud, said she prioritized her career and stability, as well as her children, and paid the fine.