Faso asks IRS to weigh in on Cuomo’s tax proposals

Rep. John Faso has asked the Internal Revenue Service for an advisory opinion on the validity of New York tax changes Gov. Andrew Cuomo has proposed to circumvent a new federal tax deduction limit set by the Republican tax-code revision in December.

In a letter dated Monday and released by Faso’s office on Wednesday, the Kinderhook Republican said constituents have asked him about the Cuomo adminstration’s proposals to replace state income and local property taxes with charitable contributions, which wouldn’t be subject to the $10,000 cap on annual deductions for state and local taxes. He urged the IRS to say up front if it would treat indirect payments to governments and school districts as charitable donations, rather than taxes.

“This matter is of great public interest in a number of states besides New York, including California, New Jersey and Connecticut among others,” Faso wrote to David Kautter, assistant treasury secretary for tax policy. “Please advise whether the IRS has begun evaluating the validity of these and similar proposals.  I believe that it is important that the Treasury and the IRS issue guidance or a formal opinion letter whether taxpayer contributions to state authorized trust funds, partially reimbursed by credits reducing state and local income taxes, will be considered deductible for federal tax purposes.”

Cuomo also has opposed creating an optional payroll tax that employers could use to replace income taxes. The Senate’s Republican leadership is dubious about the tax proposals, making it appear unlikely they will make it through the budget negotiations that will take place over the next month.

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    Chris McKenna

    Chris McKenna covers Orange County government and politics for the Times Herald-Record. He has been a reporter at the newspaper since 1999. Read Full
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