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<i>Closed sign in the storefront of a hair salon during the COVID-19 pandemic. Photo: VDB Photos/Shutterstock</i> Closed sign in the storefront of a hair salon during the COVID-19 pandemic. Photo: VDB Photos/Shutterstock

The year 2020 commenced as a “Year of Vision” for most people, wherein they expected personal and business growth, success and wealth. That vision quickly shattered as the novel Coronavirus became a pandemic that altered daily life, especially in New York state (NYS) when it was declared the epicenter of the pandemic. In response, NYS Governor Andrew Cuomo issued a “PAUSE” order which, in part, closed and/or restricted capacity for certain businesses, up to this date. While this mitigation tactic controlled the spread of the virus, many businesses and individuals are still unable to recover from the devastating financial effects from the restrictions. This article focuses on the NYS and federal tax consequences for businesses and individuals, as well as potential solutions.

The NYS Dept. of Taxation and Finance (NYS Tax Dept.), as well as the Internal Revenue Service (IRS) (collectively, “the taxing authorities”) have issued various forms of tax relief since March 2020, starting with deferring all adverse collection activity, extending filing deadlines, abating late payment penalties and offering certain business tax credits, followed by extending payment agreement deadlines. Nevertheless, taxpayers are expected to fully comply with all filing and payment obligations once the relief expires. Taxpayers that are unable to comply are required to contact the taxing authorities to obtain further extensions and/or to secure collection alternatives for all outstanding tax liabilities.

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