N.Y. Tax Law § 1700: Voluntary disclosure and compliance program

§ 1700. Voluntary disclosure and compliance program. 1.

Notwithstanding the provisions of any other law to the contrary, there

is hereby established a voluntary disclosure and compliance program, as

described in this section, to be administered by the commissioner, for

all eligible taxpayers as described in this section, owing any tax

imposed or previously imposed under this chapter or administered by the

commissioner.

2. For purposes of the voluntary disclosure and compliance program

established under this section, an eligible taxpayer is an individual,

partnership, estate, trust, corporation, limited liability company,

joint stock company, or any other company, trustee, receiver, assignee,

referee, society, association, business or any other person subject to a

tax imposed by or pursuant to the authority of this chapter or any other

law imposing administrative tax responsibilities on the commissioner and

who meets the following criteria: (1) the taxpayer is not currently

under audit by the department; (2) the taxpayer is one who is

voluntarily disclosing a New York tax liability that the department has

not determined, calculated, researched or identified at the time of the

disclosure; (3) the taxpayer is not currently a party to any criminal

investigation being conducted by an agency of the state or any political

subdivision thereof; and (4) the taxpayer is not seeking to disclose

participation in a tax avoidance transaction that is a federal or New

York state reportable or listed transaction.

3. Under the voluntary disclosure and compliance program, upon

execution of a voluntary disclosure and compliance agreement by the

eligible taxpayer and the commissioner, the commissioner shall waive any

applicable penalties (including the additional rate of interest

prescribed under section eleven hundred forty-five of this chapter) for

the following: (1) failure to pay any such tax liability; (2) failure to

file a return or report with respect to any such tax liability; and (3)

failure to pay estimated tax. In addition, no criminal action or

proceeding shall be brought against an eligible taxpayer relating to the

tax liability covered by the agreement. This agreement shall not

preclude the auditing of the returns filed to determine if those returns

were completed in accordance with existing law and regulation.

Intentional failure to pay all the taxes, plus related interest,

pursuant to the voluntary disclosure and compliance agreement entered

into between the taxpayer and the commissioner, shall invalidate any

waiver of penalty, invalidate the forbearance of any administrative or

criminal action or proceeding.

4. To participate in the voluntary disclosure and compliance program,

an eligible taxpayer must apply by submitting a disclosure statement in

the form and manner prescribed by the commissioner. The disclosure

statement shall contain all the information the commissioner reasonably

deems necessary to effectively administer the program. As long as all

the requirements of the voluntary disclosure and compliance program are

met, no application shall be denied solely because the taxpayer has

admitted that the delinquency was the result of willful or fraudulent

conduct. Except in instances where the taxpayer has failed to comply

with the terms of a voluntary disclosure and compliance agreement, the

commissioner shall not use the taxpayer's disclosure as evidence in any

proceeding brought against the taxpayer or reveal the contents of the

disclosure to any law enforcement or other agency. However, the

disclosure of any returns or reports filed under this program with the

secretary of the treasury of the United States, his or her delegates, or

the proper tax officer of any state or city is permitted as otherwise

provided for in this chapter.

5. (a) If the taxpayer and the tax liability are eligible under the

voluntary disclosure and compliance program, the commissioner is

authorized to enter into a voluntary disclosure and compliance agreement

with the taxpayer. A voluntary disclosure and compliance agreement will

be in a form to be established by the commissioner and include such

terms as the commissioner may reasonably require to satisfy the

taxpayer's disclosed tax obligations and enable and require the taxpayer

to comply with the tax law in the future. The taxpayer must pay the tax

and the related interest that are the subject of the voluntary

disclosure and compliance agreement when the agreement is executed or

within the time stated on a bill issued to the taxpayer by the

commissioner. In the event the commissioner is satisfied that the

taxpayer cannot make immediate full payment of the disclosed tax

liability, the commissioner may enter into an installment payment

program with the taxpayer for the payment of the tax and interest due.

The commissioner may require a financial disclosure statement setting

forth information concerning the taxpayer's current assets, liabilities,

earnings, and other financial information before entering into an

installment payment plan with the taxpayer. In addition to any other

information and terms that the commissioner determines are appropriate,

the voluntary disclosure and compliance agreement shall provide that, if

the taxpayer complies with the terms of the compliance agreement, the

taxpayer will not be subject to any criminal tax prosecution in New York

state for the conduct disclosed by the taxpayer.

(b) If the taxpayer intentionally provides false material information

or omits material information in his or her submissions to the

commissioner, or attempts to intentionally defeat or evade a tax due

pursuant to the agreement executed under this article, or intentionally

fails to comply with the terms of the compliance agreement, such

agreement shall be deemed rescinded.

6. Unless the commissioner on his or her own motion redetermines the

amount of tax due, including applicable interest, no refund shall be

granted or credit allowed with respect to any taxes, including

applicable interest, paid under this program.

7. The commissioner may promulgate regulations, issue forms and

instructions, and take any and all other actions necessary to implement

the provisions of the program established under this section. The

commissioner shall publicize the program provided for in this section so

as to maximize public awareness of and participation in such program.

8. For purposes of this section, the term "taxpayer" includes any

person required to collect any of the taxes specified in subdivision one

of this section.

9. The voluntary disclosure and compliance application, the disclosure

statement, the voluntary disclosure and compliance agreement, and other

documents filed by an eligible taxpayer pursuant to the program

established by this section are deemed to be reports and returns:

(a) subject to the secrecy provisions of this chapter in the same

manner and to the same extent as if such documents were referred to in

any of the secrecy provisions of this chapter; and

(b) for purposes of the criminal provisions of article thirty-seven of

this chapter.