The purpose of these rules is to define the requirements imposed on taxpayers for the maintenance and retention of books, records, and other sources of information under §§ 11-518, 11-687, 11-707, 11-805, 11-902, 11-1103, 11-1307 and 11-2503 of the Administrative Code of the City of New York and to address these requirements where all or a part of the taxpayer's records are received, created, maintained or generated through various computer, electronic and imaging processes and systems.
Unless the context requires otherwise, the following definitions apply in these rules:
Database Management System. The term "Database Management System" or DMS means a software system that controls, relates, retrieves, and provides accessibility to data stored in a database.
Department. The term "Department" means the Department of Finance of the City of New York.
Electronic Data Interchange. The term "Electronic Data Interchange" or "EDI" means the computer-to-computer exchange of business transactions in a standardized structured electronic format.
Hard copy. The term "Hard copy" means any documents, records, reports or other data printed on paper.
Machine-sensible record. The term "Machine-sensible record" means a collection of related information in an electronic format. Machine-sensible records do not include hard copy records that are created or recorded on paper or stored in or by an imaging system such as microfilm, microfiche, or storage-only imaging systems.
Storage-only imaging system. The term "Storage-only imaging system" means a system of computer hardware and software that provides for the storage, retention and retrieval of documents originally created on paper. It does not include any system, or part of a system, that manipulates or processes any information or data contained on the document in any manner other than to reproduce the document in hard copy or as an optical image.
(a) A taxpayer shall maintain all records that are necessary to a determination of the correct tax liability under Chapters 5, 6, 7, 8, 9, 11, 13 and of the Administrative Code of the City of New York. All required records must be made available on request by the Department or its authorized representatives as provided for in §§ 11-518, 11-687, 11-707, 11-805, 11-902, 11-1103, 11-1307 and 11-2503 of the Administrative Code of the City of New York. Such records shall include, but not be necessarily limited to permanent books of account or record, including inventories where applicable, as are sufficient to establish the amount of gross income, deductions, credits and other matters required to be shown by the taxpayer in any tax return required under the above chapters of the Administrative Code.
(b) If a taxpayer retains records required to be retained under these rules in both machine-sensible and hard copy formats, the taxpayer shall make the records available to the Department in machine-sensible format upon request of the Department.
(c) Nothing in this section shall prevent the Department from requesting hard copy printouts in lieu of retained machine-sensible records at the time of examination.
(d) Hard copy records generated at the time of a transaction using a credit or debit card must be retained unless all the details necessary to determine correct tax liability relating to the transaction are subsequently received and retained by the taxpayer in accordance with these rules. Such details include those listed in 19 RCNY § 26-04(b)(1).
(e) Computer printouts that are created for validation, control, or other temporary purposes need not be retained.
(f) Nothing in these rules shall be construed to prohibit a taxpayer from demonstrating tax compliance with traditional hard copy documents or reproductions thereof, in whole or in part, whether or not such taxpayer also has retained or has the capability to retain records on electronic or other storage media in accordance with these rules. However, this subdivision shall not relieve the taxpayer of the obligation to comply with subdivision (b).
(g) Except as otherwise provided in this section, the provisions of these rules do not relieve taxpayers of the responsibility to retain hard copy records that are created or received in the ordinary course of business as required by existing law and regulations. Hard copy records may be retained on a recordkeeping medium as provided in 19 RCNY § 26-06.
(h) Every taxpayer should make periodic checks on all records being retained for use by the Department. If any records required to be retained are subsequently lost, destroyed, damaged or found to be incomplete or materially inaccurate, the taxpayer must recreate the files within a reasonable period of time.
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