N.Y. Comp. Codes R. & Regs. tit. 20 § 535.4

Current through Register Vol. 46, No. 25, June 18, 2024

Section 535.4 - Jeopardy assessments

Tax Law, § 1138(b), (d)

(a)Timing.

In the case of a jeopardy assessment, the Division of Taxation determines the amount of tax due from a taxpayer and gives notice of such determination prior to the filing of his return and prior to the date when the taxpayer is required to file his return.

(b)Reason for use.

Jeopardy assessments are made if the Division of Taxation believes that the collection of any tax will be jeopardized by delay. The Division of Taxation may abate any jeopardy assessment if it finds that jeopardy does not exist.

(c)Effect of jeopardy assessment.

(1) The amount of tax determined by a jeopardy assessment is due and payable to the department by the person against whom the jeopardy assessment is made as soon as the notice of the determination of such an assessment is given to such person. Notice of the determination under jeopardy may be given by personal service or by registered or certified mail, in which case the provisions of section 535.1 of this Part apply.

(2) The determination by the Division of Taxation of the amount of tax owed in the case of a jeopardy assessment will finally and irrevocably fix the tax unless the person assessed files a petition for a hearing or a request for a conciliation conference within 90 days of the date of mailing of the notice of such determination, or unless the Division of Taxation of its own motion redetermines the same.

(d)Seizure of property.

(1) If the person against whom a jeopardy assessment is made does not immediately pay the tax due, the Department of Taxation and Finance may seize such person's property in the manner provided for in subdivision (b) of section 1141 of the Tax Law for purposes of collecting the tax due. Except as provided in paragraph (2) of this subdivision, property seized pursuant to a jeopardy assessment may not be sold by the Department of Taxation and Finance until the time to apply for a hearing or a conciliation conference as provided by section 1138(a) of the Tax Law and section 535.2(c) of this Part has expired. If an application for such a hearing or conciliation conference has been timely filed, then the sale of the seized property is further stayed until:

(i) a conciliation order, issued by a conciliation conferee upholding the Division of Taxation's issuance of the jeopardy assessment, has become binding on the taxpayer; or

(ii) a determination, rendered by an administrative law judge upholding the Division of Taxation's issuance of the jeopardy assessment, has become final; or

(iii) where a timely exception to the determination of an administrative law judge has been filed with the Tax Appeals Tribunal, four months after the Tax Appeals Tribunal has issued a decision that upholds the issuance of the jeopardy assessment by the Division of Taxation and has given notice of such decision to the person against whom the jeopardy assessment is made.

Cross-reference:

For the rights of a person to a prompt hearing regarding the propriety of warrants issued pursuant to jeopardy assessments, see Part 2394 of this Title.

(2) Property seized pursuant to a jeopardy assessment may be sold at any time if:

(i) the person assessed fails to attend a hearing before the Division of Tax Appeals or a conciliation conference before the Bureau of Conciliation and Mediation Services of which such person has been duly notified;

(ii) the person assessed consents to the sale;

(iii) the Division of Taxation determines that the expenses of conservation and maintenance will greatly reduce the net proceeds; or

(iv) the property is perishable.

(e)Filing a bond to avoid seizure of property.

The seizure of property pursuant to a jeopardy assessment may be avoided by filing with the department a bond issued by a surety company authorized to transact business in this State and approved by the Superintendent of Insurance of the State of New York as to solvency and responsibility. The amount of such bond must equal the amount stated to be owing in the notice of determination sent to the taxpayer. The bond will be conditioned upon the payment of the amount of tax, together with interest and penalties thereon, which is finally determined to be due by the department or by a judicial proceeding under article 78 of the Civil Practice Law and Rules and not subject to further review, such payment to be made when the amount owing is finally determined and not subject to further review.

(f) A jeopardy assessment may not be made in connection with the liability of a purchaser, transferee, or assignee arising under the provisions of subdivision (c) of section 1141 of the Tax Law.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 535.4