Opinion
May 8, 1986
Appeal from the Supreme Court, Albany County.
Robert Scarpulla and his wife, Joanne, petitioners herein, jointly filed New York State income tax returns for the years 1978 and 1979. Robert Scarpulla was the owner and operator of a fuel oil business in the City of Rochester during the years in question. A source and application audit of petitioners' 1978 and 1979 tax returns was performed and, as a result thereof, the State Department of Taxation and Finance issued a notice of deficiency to petitioners in the amount of $24,152.12. Petitioners contested the deficiency and a hearing was held. At the hearing, two of the Department's auditors testified and introduced into evidence the materials and facts on which they had relied in conducting the audit. Petitioners called three witnesses who testified as to various expenditures and sources of funds. Respondent found in part for petitioners and accordingly modified the deficiency assessment. Petitioners then commenced this CPLR article 78 proceeding to review respondent's determination.
Petitioners' contention that the determination was not supported by substantial evidence is rejected. The determination should be confirmed and the petition dismissed. Petitioners had the burden of proving at the hearing by clear and convincing evidence that the deficiency assessment was erroneous (see, Tax Law § 689 [e]; Matter of Levin v Gallman, 42 N.Y.2d 32, 34; Matter of Delia v Chu, 106 A.D.2d 815, 816; Matter of Surface Line Operators Fraternal Org. v Tully, 85 A.D.2d 858, 859). The burden was not upon the Department to demonstrate the propriety of the deficiency (see, Matter of Nicholls v State Tax Commn., 101 A.D.2d 950). "[I]f there are any facts or reasonable inferences from the facts to support [respondent's] determination, the assessment should be confirmed" (Matter of Levin v Gallman, supra, p 34; see, Matter of Lionel Leasing Indus. Co. v State Tax Commn., 105 A.D.2d 581, 583).
In the instant case, the Department submitted evidence to support its deficiency assessment. Petitioners introduced evidence to refute the assessment's accuracy. It was for respondent to weigh and resolve the conflicting evidence (see, Matter of Delia v Chu, supra, p 817). There is nothing in the record to indicate, as petitioners claim, that respondent did not consider any of the evidence submitted by petitioners at the hearing, only that respondent did not accept some of the evidence. Such action was within respondent's province.
Petitioners have thus failed to demonstrate that the deficiency assessment was improper and there is substantial evidence in the record to support respondent's determination (see, Matter of Shmaruk v State Tax Commn., 79 A.D.2d 832). Petitioners' argument that the errors in the audit found at the hearing invalidate the remainder of the assessment which was upheld by respondent must be rejected (see, e.g., Matter of Skiadas v State Tax Commn., 95 A.D.2d 971; Matter of Markowitz v State Tax Commn., 54 A.D.2d 1023, affd 44 N.Y.2d 684).
Finally, petitioners' claim of an inaccuracy in the figures of the Department's auditors in calculating expenditures from their personal savings account at First Federal Savings and Loan Association cannot be considered on this review since petitioners failed to raise the issue at the hearing and have thus waived it (see, Matter of Freer v State Tax Commn., 98 A.D.2d 834).
Determination confirmed, and petition dismissed, without costs. Kane, J.P., Casey, Mikoll, Yesawich, Jr., and Levine, JJ., concur.