N.Y. General City Model 772/66 § 72: Notice of Deficiency

§ 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.