N.Y. General City Model Law § 72

Current through 2024 NY Law Chapters 1-59 and 61-121

Section 72 - Notice of Deficiency

1.General.-If upon examination of a taxpayer's return, the director of finance determines that there is a deficiency of tax, it may mail a notice of deficiency to the taxpayer. If a taxpayer fails to file a tax return, the director of finance is authorized to estimate the taxpayer's city tax liability from any information in his possession, and to mail a notice of deficiency to the taxpayer. A notice of deficiency shall be mailed by certified or registered mail to the taxpayer at its last known address in or out of the city. If the taxpayer has terminated its existence, a notice of deficiency may be mailed to its last known address in or out of the city, and such notice shall be sufficient for purposes of this part. If the director of finance has received notice that a person is acting for the taxpayer in a fiduciary capacity, a copy of such notice shall also be mailed to the fiduciary named in such notice.

2.Notice of deficiency as assessment.-After ninety days from the mailing of a notice of deficiency, such notice shall be an assessment of the amount of tax specified in such notice, together with the interest, additions to tax and penalties stated in such notice, except only for any such tax or other amounts as to which the taxpayer has within such ninety day period filed with the director of finance a petition under section eighty. If the notice of deficiency is addressed to a taxpayer whose last known address is outside of the United States, such period shall be one hundred fifty days instead of ninety days.

3.Restrictions on assessment and levy.-No assessment of a deficiency in tax and no levy or proceeding in court for its collection shall be made, begun or prosecuted, except as otherwise provided in section eighty-five, until a notice of deficiency has been mailed to the taxpayer, nor until the expiration of the time for filing a petition contesting such notice, nor, if a petition with respect to the taxable year has been filed with the director of finance, until the decision of the director of finance has become final. For exception in the case of judicial review of the decision of the director of finance, see subdivision three of section eighty-one.

4.Exceptions for mathematical errors.-If a mathematical error appears on a return (including an overstatement of the amount paid as estimated tax), the director of finance shall notify the taxpayer that an amount of tax in excess of that shown upon the return is due, and that such excess has been assessed. Such notice shall not be considered as a notice of deficiency for the purposes of this section, subdivision six of section seventy-eight (limiting credits or refunds after petition to the director of finance), or subdivision two of section eighty (authorizing the filing of a petition with the director of finance based on a notice of deficiency), nor shall such assessment or collection be prohibited by the provisions of subdivision three of this section.

5.Exception where change in federal taxable income is not reported.-

(a) If the taxpayer fails to comply with part two or part three of this title in not reporting a change or correction or renegotiation, or computation or recomputation of tax, increasing or decreasing its federal taxable income as reported on its federal income tax return or in not reporting a change or correction or renegotiation, or computation or a recomputaton of tax, which is treated in the same manner as if it were a deficiency for federal income tax purposes or in not filing an amended return or in not reporting the execution of a notice of waiver executed pursuant to subsection (d) of section six thousand two hundred thirteen of the internal revenue code instead of the mode and time of assessment provided for in subdivision two of this section, the commissioner of finance may assess a deficiency based upon such increased or decreased federal taxable income by mailing to the taxpayer a notice of additional tax due specifying the amount of the deficiency, and such deficiency, together with the interest, additions to tax and penalties stated in such notice, shall be deemed assessed on the date such notice is mailed unless within thirty days after the mailing of such notice a report of the federal change or correction or renegotiation, or computation or recomputation of tax, or an amended return, where such return was required by part two or part three, is filed accompanied by a statement showing wherein such federal determination and such notice of additional tax due are erroneous.

(b) Such notice shall not be considered as a notice of deficiency for the purposes of this section, subdivision six of section seventy-eight (limiting credits or refunds after petition to the director of finance), or subdivision two of section eighty (authorizing the filing of a petition with the director of finance based on a notice of deficiency), nor shall such assessment or the collection thereof be prohibited by the provisions of subdivision three of this section.

(c) If the taxpayer has terminated its existence, a notice of additional tax due may be mailed to its last known address in or out of the city, and such notice shall be sufficient for purposes of this part. If the director of finance has received notice that a person is acting for the taxpayer in a fiduciary capacity, a copy of such notice shall also be mailed to the fiduciary named in such notice.

6.Waiver of restrictions.-The taxpayer shall at any time (whether or not a notice of deficiency has been issued) have the right to waive the restrictions on assessment and collection of the whole or any part of the deficiency by a signed notice in writing filed with the director of finance.

7.Two or more corporations.-In the case of a combined return under part two or a consolidated return under part three of two or more corporations, the director of finance may determine a deficiency of tax under part two or part three with respect to the entire tax due upon such return against any taxpayer included therein. In the case of a taxpayer which might have been included in such a return under part two or part three when the tax was originally reported, the director of finance may determine a deficiency of tax under part two or part three against such taxpayer and against any other taxpayers which might have been included in such a return.

8.Deficiency defined.-For purposes of this part, a deficiency means the amount of the tax imposed by the named parts, or any of them, less (a) the amount shown as the tax upon the taxpayer's return (whether the return was made or the tax computed by it or by the director of finance), and less (b) the amounts previously assessed (or collected without assessment) as a deficiency and plus (c) the amount of any rebates. For the purpose of this definition, the tax imposed by part two or part three of this title and the tax shown on the return shall both be determined without regard to any payment of estimated tax; and a rebate means so much of an abatement, credit, refund or other repayment (whether or not erroneous) as was made on the ground that the amounts entering into the definition of a deficiency showed a balance in favor of the taxpayer.

9.Exception where change or correction of sales and compensating use tax liability is not reported.

(a) If a taxpayer fails to comply with part two of this title in not reporting a change or correction of its sales and compensating use tax liability or in not filing a copy of an amended return or report relating to its sales and compensating use tax liability, instead of the mode and time of assessment provided for in subdivision two of this section, the commissioner of finance may assess a deficiency based upon such changed or corrected sales and compensating use tax liability, as same relates to credits claimed under part two of this title by mailing to the taxpayer a notice of additional tax due specifying the amount of the deficiency, and such deficiency, together with the interest, additions to tax and penalties stated in such notice, shall be deemed assessed on the date such notice is mailed unless within thirty days after the mailing of such notice a report of the state change or correction or a copy of an amended return or report, where such copy was required by part two, is filed accompanied by a statement showing wherein such state determination and such notice of additional tax due are erroneous.

(b) Such notice shall not be considered as a notice of deficiency for the purposes of this section, subdivision six of section seventy-eight (limiting credits or refunds after petition to the commissioner of finance), or subdivision two of section eighty (authorizing the filing of a petition with the commissioner of finance based on a notice of deficiency), nor shall such assessment or the collection thereof be prohibited by the provisions of subdivision three of this section.

(c) If the taxpayer has terminated its existence, notice of additional tax due may be mailed to its last known address in or out of the city, and such notice shall be sufficient for purposes of this part. If the commissioner of finance has received notice that a person is acting for the taxpayer in a fiduciary capacity, a copy of such notice shall also be mailed to the fiduciary named in such notice.

N.Y. General City Model Law § 72