N.Y. Tax Law § 1138: Determination of tax

§ 1138. Determination of tax. (a) (1) If a return required by this

article is not filed, or if a return when filed is incorrect or

insufficient, the amount of tax due shall be determined by the

commissioner from such information as may be available. If necessary,

the tax may be estimated on the basis of external indices, such as stock

on hand, purchases, rental paid, number of rooms, location, scale of

rents or charges, comparable rents or charges, type of accommodations

and service, number of employees or other factors. In the case of retail

food stores and other participants approved for participation in the

federal food stamp program under or pursuant to the federal food stamp

act of nineteen hundred seventy-seven (7 U.S.C. § 2011 et seq.), as

amended, whose records are incomplete or inadequate to determine tax,

the external indices upon which tax may be estimated and determined may

also include information contained in applications, updates of

applications, redemption certificates, returns and reports which such

retail food stores and other participants furnish to or are furnished by

the United States government or this state or their agencies in order

for such retail food stores and other participants to participate in the

food stamp program or to redeem coupons issued under or pursuant to such

food stamp act and any other available information considered relevant.

Notice of such determination shall be mailed to the person or persons

liable for the collection or payment of the tax. A notice of

determination shall be mailed by certified or registered mail to the

person or persons liable for the collection or payment of the tax at his

last known address in or out of this state. If such person or persons is

deceased or under a legal disability, a notice of determination may be

mailed to his last known address in or out of this state, unless the

department has received notice of the existence of a fiduciary

relationship with respect to the taxpayer. After ninety days from the

mailing of a notice of determination, 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 applied to the division of tax appeals for

a hearing, or unless the commissioner of his own motion shall

redetermine the same. If the notice of determination is addressed to a

person outside of the United States, such period shall be one hundred

fifty days instead of ninety days.

(2) Whenever such tax is estimated as provided for in this section,

such notice shall contain a statement in bold face type conspicuously

placed on such notice advising the taxpayer: that the amount of the tax

was estimated; that the tax may be challenged through a hearing process;

and that the petition for such challenge must be filed with the tax

commission within ninety days.

(3) (A) The liability of a purchaser, transferee or assignee of

business assets sold, transferred or assigned in bulk for the payment to

the state of taxes determined to be due from the seller, transferor or

assignor arising under subdivision (c) of section eleven hundred

forty-one of this chapter shall be an assessment of the liability

determined unless the purchaser, transferee or assignee, within ninety

days after the giving of notice by the tax commission to such purchaser,

transferee or assignee of the total amount of any tax or taxes which the

state claims to be due from the seller, transferor or assignor, shall

apply to the tax commission for a hearing or unless the tax commission,

on its own motion, shall redetermine such liability. Where the tax

commission determines that the amount of taxes claimed to be due from

the seller, transferor or assignor is erroneous or excessive in whole or

in part it shall, on behalf of the purchaser, transferee or assignee,

determine the amount of tax or taxes properly due and if such amount is

less than the amount of taxes for which the purchaser would have been

liable in the absence of such determination it shall reduce such

liability accordingly. The commission may, on its motion, abate, on

behalf of the purchaser, transferee or assignee, any part of the taxes

determined to be erroneous or excessive, whether or not such taxes had

become finally and irrevocably fixed.

(B) The liability, pursuant to subdivision (a) of section eleven

hundred thirty-three of this article, of any officer, director or

employee of a corporation or of a dissolved corporation, member or

employee of a partnership or employee of an individual proprietorship

who as such officer, director, employee or member is under a duty to act

for such corporation, partnership or individual proprietorship in

complying with any requirement of this article for the tax imposed,

collected or required to be collected, or for the tax required to be

paid or paid over to the commissioner under this article, and the amount

of such tax liability (whether or not a return is filed under this

article, whether or not such return when filed is incorrect or

insufficient, or where the tax shown to be due on the return filed under

this article has not been paid or has not been paid in full) shall be

determined by the commissioner in the manner provided for in paragraphs

one and two of this subdivision. Such determination shall be an

assessment of the tax and liability for the tax with respect to such

person unless such person, within ninety days after the giving of notice

of such determination, shall apply to the division of tax appeals for a

hearing. If such determination is identical to or arises out of a

previously issued determination of tax of the corporation, dissolved

corporation, partnership or individual proprietorship for which such

person is under a duty to act, an application filed with the division of

tax appeals on behalf of the corporation, dissolved corporation,

partnership or individual proprietorship shall be deemed to include any

and all subsequently issued personal determinations and a separate

application to the division of tax appeals for a hearing shall not be

required. The commissioner may, nevertheless, of their own motion,

redetermine such determination of tax or liability for tax. Where the

commissioner determines or redetermines that the amount of tax claimed

to be due from a vendor of tangible personal property or services, a

recipient of amusement charges, or an operator of a hotel or short term

rental unit is erroneous or excessive in whole or in part, they shall

redetermine the amount of tax properly due from any such person as a

person required to collect tax with respect to such vendor, recipient,

or operator, and if such amount is less than the amount of tax for which

such person would have been liable in the absence of such determination

or redetermination, they shall reduce such liability accordingly.

Furthermore, the commissioner may, of their own motion, abate on behalf

of any such person, any part of the tax determined to be erroneous or

excessive whether or not such tax had become finally and irrevocably

fixed with respect to such person but no claim for abatement may be

filed by any such person. The provisions of this paragraph shall not be

construed to limit in any manner the powers of the attorney general

under subdivision (a) of section eleven hundred forty-one of this part

or the powers of the commissioner to issue a warrant under subdivision

(b) of such section against any person whose liability has become

finally and irrevocably fixed.

(C) The liability of any person as an owner of a filling station, for

the penalty imposed by subparagraph (vii) of paragraph one of

subdivision (a) of section eleven hundred forty-five, and the amount of

such penalty shall be determined by the tax commission. Such

determination shall be an assessment of the amount of and liability for

penalty with respect to such person unless such person, within ninety

days after the giving of notice of such determination, shall apply to

the tax commission for a hearing. The tax commission may, nevertheless,

of its own motion, redetermine such determination or liability for

penalty. Furthermore, the tax commission may, of its own motion, abate

any part of the penalty determined to be erroneous or excessive whether

or not such penalty has become finally and irrevocably fixed with

respect to such person but no claim for abatement may be filed by any

such person. The provisions of this paragraph shall not be construed to

limit in any manner the powers of the attorney general under subdivision

(a) of section eleven hundred forty-one of this article or the powers of

the tax commission to issue a warrant under subdivision (b) of such

section against any person whose liability has become finally and

irrevocably fixed.

(D) The liability of any person, as an owner of a place of business

selling cigarettes at retail, for the penalty imposed by subparagraph

(viii) of paragraph one of subdivision (a) of section eleven hundred

forty-five of this article and the amount of such penalty shall be

determined by the commissioner. Such determination shall be an

assessment of the amount of and liability for such penalty with respect

to such person, unless such person, within ninety days after the giving

of notice of such determination, shall apply to the division of tax

appeals for a hearing. The commissioner may, nevertheless, on the

commissioner's own motion, redetermine such determination. Furthermore,

the commissioner may, on the commissioner's own motion, abate any part

of the penalty determined to be erroneous or excessive whether or not

such penalty has become finally and irrevocably fixed with respect to

such person; but no claim for abatement may be filed by any such person.

The provisions of this paragraph shall not be construed to limit in any

manner the powers of the attorney general under subdivision (a) of

section eleven hundred forty-one of this article or the powers of the

commissioner to issue a warrant under subdivision (b) of such section

against any person whose liability has become finally and irrevocably

fixed.

(E) In addition to any other liability a credit card issuer or fuel

distributor may have, the commissioner shall determine any or all of the

following liabilities: (1) any tax, interest or penalty liability of a

credit card issuer or fuel distributor for any credit allowed or refund

paid under subdivision (h) of section eleven hundred thirty-nine of this

part which was erroneously, illegally or unconstitutionally allowed or

paid to such credit card issuer or fuel distributor, or (2) the penalty

imposed by subparagraph (ix) of paragraph one of subdivision (a) of

section eleven hundred forty-five of this part. In any such instance,

the commissioner shall give the credit card issuer or fuel distributor

notice of such determination in the manner described in paragraph one

and two of this subdivision. Such determination shall be an assessment

of any such liability unless such credit card issuer or fuel

distributor, within ninety days after the giving of such notice and

determination, shall apply to the commissioner for a hearing. The

commissioner may, nevertheless, of his or her own motion, redetermine

such determination or liability for penalty. Furthermore, the

commissioner may, of his or her own motion, abate any part of the

penalty determined to be erroneous or excessive whether or not such

penalty has become finally and irrevocably fixed with respect to such

issuer or fuel distributor but no claim of abatement may be filed by

such issuer or fuel distributor. The provisions of this paragraph shall

not be construed to limit in any manner the powers of the attorney

general under subdivision (a) of section eleven hundred forty-one of

this part or the powers of the commissioner to issue a warrant under

subdivision (b) of such section against any such issuer or fuel

distributor whose liability has become finally and irrevocably fixed.

(4) After the hearing provided for in paragraph one or three of this

subdivision, the division of tax appeals shall give notice promptly by

registered or certified mail of the determination of the administrative

law judge to the petitioner and to the commissioner of taxation and

finance. Such determination may be reviewed by the tax appeals tribunal

as provided in article forty of this chapter. The decision of the tax

appeals tribunal may be reviewed as provided in section two thousand

sixteen of this chapter. Such a proceeding for judicial review shall not

be instituted unless the amount of any tax sought to be reviewed, with

penalties and interest thereon, if any, shall be first deposited with

the commissioner of taxation and finance and there shall be filed with

the commissioner of taxation and finance an undertaking, issued by a

surety company authorized to transact business in this state and

approved by the superintendent of financial services of this state as to

solvency and responsibility, in such amount as a justice of the supreme

court shall approve to the effect that if such proceeding be dismissed

or the tax confirmed the petitioner will pay all costs and charges which

may accrue in the prosecution of the proceeding, or at the option of the

petitioner such undertaking filed with the commissioner of taxation and

finance may be in a sum sufficient to cover the taxes, penalties and

interest thereon stated in such determination plus the costs and charges

which may accrue against him in the prosecution of the proceeding, in

which event the petitioner shall not be required to deposit such taxes,

penalties and interest as a condition precedent to the commencement of

the proceeding. The preceding sentence shall not apply to a proceeding

brought to review a determination made under subparagraph (B) of

paragraph three of this subdivision.

(b) If the tax commission believes that the collection of any tax will

be jeopardized by delay it may determine the amount of such tax and

assess the same, together with all interest and penalties provided by

law, against any person liable therefor prior to the filing of his

return and prior to the date when his return is required to be filed.

The amount so determined shall become due and payable to the tax

commission by the person against whom such a jeopardy assessment is

made, as soon as notice thereof is given to him personally or by

registered or certified mail. The provisions of subdivision (a) of this

section shall apply to any such determination except to the extent that

they may be inconsistent with the provisions of this subdivision. The

tax commission may abate any jeopardy assessment if it finds that

jeopardy does not exist. The collection of any jeopardy assessment may

be stayed by filing with the tax commission a bond issued by a surety

company authorized to transact business in this state and approved by

the superintendent of financial services as to solvency and

responsibility, conditioned upon payment of the amount assessed and

interest thereon, or any lesser amount to which such assessment may be

reduced by the tax commission or by a proceeding under article

seventy-eight of the civil practice law and rules as provided in

subdivision (a), such payment to be made when the assessment or any such

reduction thereof shall have become final and not subject to further

review. If such a bond is filed and thereafter a proceeding under

article seventy-eight is commenced as provided in subdivision (a),

deposit of the taxes, penalties and interest assessed shall not be

required as a condition precedent to the commencement of such

proceeding. Where a jeopardy assessment is made, any property seized for

the collection of the tax shall not be sold (1) until expiration of the

time to apply for a hearing as provided in subdivision (a) of this

section, and (2) if such application is timely filed, until the

expiration of four months after the tax commission has given notice of

its determination to the person against whom the assessment is made;

provided, however, such property may be sold at any time if such person

has failed to attend a hearing of which he has been duly notified, or if

he consents to the sale, or if the tax commission determines that the

expenses of conservation and maintenance will greatly reduce the net

proceeds, or if the property is perishable.

(c) A person liable for collection or payment of tax (whether or not a

determination assessing a tax pursuant to subdivision (a) of this

section has been issued) shall be entitled to have a tax due assessed

prior to the ninety-day period referred to in subdivision (a) of this

section, by filing with the tax commission a signed statement in

writing, in such form as the tax commission shall prescribe, consenting

thereto.

(d) Except as otherwise provided in subdivision (a) of this section,

the provisions of this section shall not be applicable to the liability

of a purchaser, transferee or assignee arising under the provisions of

subdivision (c) of section eleven hundred forty-one of this chapter.