NYC HPD – 2021 Mitchell-Lama Income Verification Audit
AS PER ATTACHED NYC HPD MEMORANDUM:
TO: Site Managers for City Mitchell-Lama Developments
FROM: Julie C. Walpert
SUBJECT: 2021 Mitchell-Lama Income Verification Audit
DATE: July 18, 2023
Attached is the 2021 Income Verification Audit Report(s) for your Mitchell-Lama
development(s). Managing agents are responsible to follow up on Audit Reports, including
calculating and implementing any surcharge resulting from the audit. The Audit Report
includes columns titled “Income Audit Results” and “Primary Residence Issue?”, which
must be completed by managing agents in accordance with the below instructions and
provided to HPD by March 31, 2024.
The 2021 Income Verification Audit is based on a comparison done by the NY State
Department of Taxation and Finance (DTF) between the information declared on
residents’ 2021 income affidavits and the information they filed on their 2021 NYS tax
returns. Residents identified in the Audit Report receive one of the following four
designations:
“MATCHED”: This means that the income reported on the resident’s 2021 income
affidavit is the same as (or higher than) the income reported on their 2021 tax return.
“UNMATCHED”: This means the income the resident reported on the 2021 income
affidavit is lower than the income the resident reported on their 2021 tax return, and they
may be subject to a surcharge.
“NO RETURN FILED”: This means DTF matched the resident’s Social Security number
to a profile; however, they were unable to find a 2021 return filed for the individual. There
could be several reasons for this:
• The resident is required to file a tax return, but failed to file.
• The resident is no longer a resident of NYS and files elsewhere.
• The resident is not required to file a return.
“NOT FOUND”: This means DTF was unable to match the resident’s Social Security
number to an existing taxpayer profile. There could be several reasons for this:
• The resident did not correctly indicate their Social Security number on the income
affidavit.
• The resident’s Social Security number was entered incorrectly.
• The resident does not reside in NYS and/or has never filed a NYS return.
NOTICE TO RESIDENTS
You must notify each resident designated in the Audit Report as “Unmatched,” “No Return
Filed,” or “Not Found” in writing and retain proof of mailing. The mailing to the residents
must be timely, so that they have ample opportunity to respond. Therefore, please be sure
to mail out the resident notices by August 15, 2023. Enclosed is a sample notification
letter for residents that we strongly encourage you to use, as it provides an explanation of
each audit designation and the information that must be provided to your office. The letter
must be placed on management’s letterhead and management must provide contact
information .
Along with the notification letter, residents should be given the enclosed “NYS TAX
DEPARTMENT RELEASE FORM” to request that their 2021 New York State income
information be released directly to management. Management should add the name and
address of the housing company to this form in the space provided before it is sent to
residents.
Office of Asset & Property
Management
Division of Housing
Supervision
100 Gold Street
New York, N.Y. 10038
ADOLFO CARRIÓN JR.
Commissioner
VACANT
Deputy Commissioner
JULIE WALPERT
Assistant Commissioner
nyc.gov/hpd
Management will be responsible for collecting the forms, ensuring they are completed and
submitting them with a cover letter directly to DTF, which will return the forms to
management with the tax information requested.
The release forms should be organized by building and should include a separate cover
letter for each building in the development indicating the name of the housing company.
The cover letter should indicate the request is for a Mitchell-Lama development to avoid
any charges. Please also include a return address. The release forms should be sent to:
State of New York
Department of Taxation and Finance
Office of Budget and Management Analysis
Disclosure and Government Exchange
W. A. Harriman Campus
Albany, NY 12227
If a resident objects to authorizing the release of their information directly to management,
they can obtain a certified copy of their 2021 income tax return directly from DTF by
completing and submitting the “Individual Request” form (please do not use the DTF-505).
A resident who chooses to obtain their own copy of their return is responsible for all costs
and must provide their return to management to avoid a surcharge.
A RESIDENT’S FAILUE TO RESPOND
If a resident fails to sign a release form or provide a certified copy of their 2021 tax return
or otherwise fails to provide requested documents related to the Income Verification Audit
by October 1, 2023 they are subject to a maximum surcharge for the entire 2021 calendar
year pursuant to section 3-02(h)(9) of the City Mitchell-Lama rules. Before implementing
the maximum surcharge, management must provide the resident with 30 days’ written
notice (which should include the option to pay the amount due over a 12-month period)
and be able to document that they requested the information from the resident.
RECALCULATION
Should a resident’s 2021 tax return show a higher income than was reported on the
resident’s 2021 income affidavit, management must perform a new 2021 surcharge
calculation to determine if there should be an adjustment. The adjustment must be
implemented for the entire 2021 calendar year. Before implementing a surcharge,
management must provide the resident with 30 days’ written notice (which should include
the option to pay the amount due over a 12-month period) and be able to document the
discrepancy between the resident’s 2021 income affidavit and their tax return.
REPORTING THE RESULTS OF THE AUDIT
Management must use the “Income Audit Results” column of the Audit Report to note
what actions have been taken and the results of the Income Verification Audit. The
neighboring “Primary Residence Issue?” column should be used to indicate any primary
residence actions taken. The “Remarks” column should be used to provide context or
additional information. Management must submit the completed Audit Report to HPD by
March 31, 2024.
Again, please ensure that notices are mailed to all residents designated in the Audit
Report as “Unmatched,” “No Return Filed,” or “Not Found” by August 15, 2023. Residents
should address all income verification audit issues with management unless they are
appealing a surcharge resulting from the Income Verification Audit. If a resident wishes to
appeal to HPD, the appeal must be in writing and include supporting documentation. The
appeal should be addressed to:
Myisha Johnson 100 Gold Street, Room7M2, New
York, NY 10038.
