New York ALJ Says Company Should Have Filed Combined Return, Not Added Back Royalty Payments

Peter Faber said an administrative law judge’s penalties against a major retailer for tax underpayment are important, because New York automatically imposes penalties unless the taxpayer had reasonable cause for its position. “The ALJ opinion states that there was no evidence in the record that the taxpayer sought professional advice about the issue or took other steps to determine whether the corporations should have filed combined returns, and that was enough to justify the penalty,” Mr. Faber noted.