N.Y. Tax Law § 1701: Financial institution data match system for state tax collection purposes

§ 1701. Financial institution data match system for state tax

collection purposes. 1. Definitions. As used in this section:

* (a) "Debt" means past-due tax liabilities, including unpaid tax,

interest, and penalty, that the commissioner is required by law to

collect and that have become fixed and final such that the taxpayer no

longer has any right to administrative or judicial review.

* NB Effective until April 1, 2030

* (a) "Debt" means all liabilities, including unpaid tax, interest,

and penalty, that the commissioner is required by law to collect and

that have been reduced to judgment by the docketing of a New York state

tax warrant in the office of a county clerk located in the state of New

York or by the filing of a copy of the warrant in the office of the

department of state.

* NB Effective April 1, 2030

(b) "Tax debtor" means a natural person or any entity other than a

natural person named on a New York state tax warrant and identified

thereon as a judgment debtor.

(c) "Financial institution" means (i) any financial institution

authorized or required to participate in a financial institution data

match system or program for child support enforcement purposes under

federal or state law, and (ii) any virtual currency business licensed by

the superintendent of financial services.

2. Financial institution data match system for state tax collection

purposes. * (a) To assist the commissioner in the collection of debts,

the department must develop and operate a financial institution data

match system for the purpose of identifying and seizing the non-exempt

assets of tax debtors as identified by the commissioner. The

commissioner is authorized to designate a third party to develop and

operate this system. Notwithstanding any other provisions of this

chapter, the commissioner is authorized to disclose the debt and the

debtor information to such third party and to financial institutions for

purposes of this system. Any third party designated by the commissioner

to develop and operate a financial data match system must keep all

information it obtains from both the department and the financial

institution confidential, and any employee, agent or representative of

that third party is prohibited from disclosing that information to

anyone other than the department or the financial institution.

* NB Effective until April 1, 2030

* (a) To assist the commissioner in the collection of debts, the

department must develop and operate a financial institution data match

system for the purpose of identifying and seizing the non-exempt assets

of tax debtors as identified by the commissioner. The commissioner is

authorized to designate a third party to develop and operate this

system. Any third party designated by the commissioner to develop and

operate a financial data match system must keep all information it

obtains from both the department and the financial institution

confidential, and any employee, agent or representative of that third

party is prohibited from disclosing that information to anyone other

than the department or the financial institution.

* NB Effective April 1, 2030

(b) Each financial institution doing business in the state must, in

conjunction with the commissioner or the commissioner's authorized

designee, develop and operate a data match system to facilitate the

identification and seizure of non-exempt financial assets of tax debtors

identified by the commissioner or the commissioner's authorized

designee. If a financial institution has a data match system developed

or used to administer the child support enforcement programs of this

state, and if that system is approved by the commissioner or the

commissioner's authorized designee, the financial institution may use

that system to comply with the provisions of this section.

3. Each financial institution must provide identifying information

each calendar quarter to the department for each tax debtor identified

by the department who or that maintains an account at the institution.

The identifying information must include the tax debtor's name, address,

and social security number or other taxpayer identification number, and

all account numbers and balances in each account.

4. A financial institution that complies with this section will not be

liable under state law to any person for the disclosure of information

to the commissioner or the commissioner's authorized designee, or any

other action taken in good faith to comply with this section.

5. Both the financial institution furnishing a report to the

commissioner under this section and the commissioner's authorized

designee are prohibited from disclosing to the tax debtor that the name

of the tax debtor has been received from or furnished to the

commissioner, unless authorized in writing by the commissioner to do so.

A violation of this subdivision will result in the imposition of a civil

penalty equal to the greater of one thousand dollars or the amount in

the account of the person to whom the disclosure was made for each

instance of unauthorized disclosure by the financial institution. That

civil penalty can be assessed and collected under this chapter as if

that penalty were tax.

6. A financial institution may disclose to its depositors or account

holders that the department has the authority to request certain

identifying information on certain depositors or account holders under

the financial institution data match system for state tax collection

purposes.