N.Y. General City Law art. 2-D, § 61: Notice of deficiency

§ 61. Notice of deficiency.--(a) General.--If upon examination of a

taxpayer's return under this local law the administrator determines that

there is a deficiency of income tax, he may mail a notice of deficiency

to the taxpayer. If a taxpayer fails to file an income tax return

required under this local law, the administrator is authorized to

estimate the taxpayer's city taxable income and tax thereon, from any

information in its 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 his last known address in or out of

the city. If a husband and wife are jointly liable for tax, a notice of

deficiency may be a single joint notice, except that if the

administrator has been notified by either spouse that separate

residences have been established, then, in lieu of the single joint

notice, a duplicate original of the joint notice shall be mailed to each

spouse at his or her last known address in or out of the city. If the

taxpayer is deceased or under a legal disability, a notice of deficiency

may be mailed to his last known address in or out of the city, unless

the administrator has received notice of the existence of a fiduciary

relationship with respect to the taxpayer.

(b) 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 administrator a petition under section

sixty-nine. If the notice of deficiency is addressed to a person outside

of the United States, such period shall be one hundred fifty days

instead of ninety days.

(c) 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 seventy-four, 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 administrator, until the decision of the

tax commission has become final. For exception in the case of judicial

review of the decision of the administrator, see subdivision (c) of

section seventy.

(d) Exceptions for mathematical errors.--If a mathematical error

appears on a return (including an overstatement of the credit for income

tax withheld at the source or of the amount paid as estimated income

tax), the administrator 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 (f) of section

sixty-seven (limiting credits or refunds after petition to the

administrator), or subdivision (b) of section sixty-nine (authorizing

the filing of a petition with the administrator based on a notice of

deficiency) nor shall such assessment or collection be prohibited by the

provisions of subdivision (c).

(e) Exception where change in federal taxable income is not

reported.--(1) If the taxpayer fails to comply with section thirty-nine

in not reporting a change or correction increasing his federal taxable

income as reported on his federal income tax return or in not reporting

a change or correction 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 described

in such section, instead of the mode and time of assessment provided for

in subdivision (b) of this section, the administrator may assess a

deficiency based upon such changed or corrected 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 an amended return, where such return was required by

section thirty-nine, is filed accompanied by a statement showing wherein

such federal determination and such notice of additional tax due are

erroneous.

(2) Such notice shall not be considered as a notice of deficiency for

the purposes of this section, subdivision (f) of section sixty-seven

(limiting credits or refunds after petition to the administrator), or

subdivision (b) of section sixty-nine (authorizing the filing of a

petition with the administrator based on a notice of deficiency), nor

shall such assessment or the collection thereof be prohibited by the

provisions of subdivision (c).

(3) If a husband and wife are jointly liable for tax, a notice of

additional tax due may be a single joint notice, except that if the

administrator has been notified by either spouse that separate

residences have been established, then, in lieu of the joint notice, a

duplicate original of the joint notice shall be mailed to each spouse at

his or her last known address in or out of the city. If the taxpayer is

deceased or under a legal disability, a notice of additional tax due may

be mailed to his last known address in or out of the city, unless the

administrator has received notice of the existence of a fiduciary

relationship with respect to the taxpayer.

(f) 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 restriction on assessment and collection of the whole or any part of

the deficiency by a signed notice in writing filed with the

administrator.

(g) Deficiency defined.--For purposes of this local law, a deficiency

means the amount of the tax imposed by this local law, less (1) the

amount shown as the tax upon the taxpayer's return (whether the return

was made or the tax computed by him or by the administrator), and less,

(2) the amounts previously assessed (or collected without assessment) as

a deficiency and plus (3) the amount of any rebates. For the purpose of

this definition, the tax imposed by this local law and the tax shown on

the return shall both be determined without regard to payments on

account of estimated tax or the credit for withholding tax; and a rebate

means so much of an abatement, credit, refund or other repayment

(whether or not erroneous) made on the ground that the amounts entering

into the definition of a deficiency showed a balance in favor of the

taxpayer.