N.Y. Tax Law § 1613-c: Crediting of lottery prizes against liabilities for taxes administered by the commissioner

§ 1613-c. Crediting of lottery prizes against liabilities for taxes

administered by the commissioner. (1) The director, on behalf of the

division, shall enter into a written agreement with the commissioner, on

behalf of the department, within sixty days of the effective date of

this section, which will set forth procedures for crediting lottery

prizes of more than six hundred dollars awarded to holders of winning

lottery tickets, whether individuals, corporations, associations,

companies, partnerships, limited liability partnerships or companies,

partners, members, managers, estates, trust fiduciaries or entities,

against past due tax liabilities owed by such holders for any tax

administered by the commissioner, about which the director has been

notified by the commissioner pursuant to the provisions of such

agreement.

(2) Such agreement shall apply to any past due tax liability which

arises from (i) an enforceable warrant or judgment, (ii) an enforceable

determination of an administrative body which is no longer subject to

administrative or judicial review, or (iii) an assessment or

determination (including self-assessment or self-assessed determination)

which has become final or finally and irrevocably fixed and no longer

subject to administrative or judicial review.

(3) Such agreement shall include:

(a) the procedure under which the department will notify the division

of tax liabilities, including when the division will be notified and the

content of that notification;

(b) the procedure for reimbursement of the division by the department

for the cost of carrying out the procedures authorized by this section;

and

(c) any other matters the parties to the agreement deem necessary to

carry out the provisions of this section.

(4) Prior to awarding lottery prizes of more than six hundred dollars,

the division shall review the most recent notice of tax liabilities

provided by the commissioner. For holders of winning lottery tickets

identified on that notice, the division shall credit to the department

the amount of each holder's prize necessary to satisfy that holder's tax

liability, and the remainder of the prize shall be awarded to the holder

of the winning ticket.

(5) If the division has also received a notice of liability of a prize

winner for past-due support or public assistance benefits pursuant to

section sixteen hundred thirteen-a or sixteen hundred thirteen-b of this

article, then the amount of any prize shall be first credited or applied

to the income tax required to be withheld by law, then as required by

section sixteen hundred thirteen-a or sixteen hundred thirteen-b of this

article, then to the past due tax liability as required by this section.

The balance will then be paid to the holder of the winning lottery

ticket.

(6) The division shall certify to the comptroller the total amount of

the lottery prize to be credited against past due tax liabilities and

the remainder of the prize to be awarded to the holder of the winning

lottery ticket.

(7) The division shall notify the holder of the winning lottery

ticket, in writing, of the total amount of the lottery prize credited

against past due tax liabilities and the remainder of the prize to be

awarded to the holder. That notice must also advise the holder that the

department will provide separate notice, in writing, of the procedure

for and time frame by which the holder may contest such crediting.

(8) The department shall notify the holder of the winning lottery

ticket, in writing, of the amount of a prize to be credited against past

due tax liabilities and the procedure for and time frame by which the

holder may contest the crediting of the prize.

(9) From the time the division is notified by the department of a past

due tax liability of a holder of a winning lottery ticket, the division

shall be relieved from all liability to the holder, and the holder's

heirs, representatives, estate, successors or assigns for the amount of

a prize certified to the comptroller to be credited against past due tax

liabilities and the holder and the holder's heirs, representatives,

estate, successor or assigns shall have no right to commence a court

action or proceeding or to any other legal recourse against the division

to recover any amount certified to the comptroller to be credited

against past due tax liabilities. Provided however, nothing herein shall

be construed to prohibit a holder of a winning lottery ticket and the

holder's heirs, representatives, estate, successors or assigns from

proceeding against the department to recover the part of the prize

certified to the comptroller and credited to past due tax liabilities

which is greater than the amount of past due tax liabilities owed by

that holder on the date of certification.

(10) Notwithstanding any law to the contrary, the department and its

officers and employees may furnish to the division any abstract of any

tax return or report, or any information concerning an item contained in

any such return or report or disclosed by any investigation of tax

liability under this chapter, but only for the purpose of crediting

lottery prizes against past due tax liabilities described in subdivision

two of this section.