N.Y. Tax Law § 3034: Civil damages for certain unauthorized collection actions

§ 3034. Civil damages for certain unauthorized collection actions.

(a) General. If, in connection with any collection of any tax with

respect to a taxpayer, any officer or employee of the department

recklessly or intentionally disregards any provision of any tax, or any

regulation promulgated under any of such taxes, such taxpayer may bring

a civil action in the court of claims for damages against the state.

Except as provided in section three thousand thirty-two of this article

relating to civil damages for failure to release a lien, such civil

action shall be the exclusive remedy for recovering damages resulting

from such actions.

(b) Damages. In any action brought under subdivision (a) of this

section, upon a finding of liability on the part of the defendant, the

defendant shall be liable to the plaintiff in an amount equal to the

lesser of one hundred thousand dollars or the sum of (1) the actual,

direct economic damages sustained by the plaintiff as a proximate result

of the reckless or intentional actions of the officer or employee, and

(2) the costs of the action.

(c) Limitations. (1) Exhaustion of administrative remedies. The

amount of damages awarded under subdivision (b) of this section may be

reduced if the court determines that the plaintiff has not exhausted the

administrative remedies available to such plaintiff within the

department which have been established pursuant to the commissioner's

authority to compromise civil liability provided in subdivision

eighteenth-a of section one hundred seventy-one of this chapter. In

establishing administrative review procedures regarding claims for

damages under this section, the commissioner is authorized to enter into

contracts with private dispute resolution entities for the purpose of

providing review of such claims and suggested compromises by independent

third parties.

(2) Mitigation of damages. The amount of damages awarded under

paragraph one of subdivision (b) of this section shall be reduced by the

amount of such damages which could have reasonably been mitigated by the

plaintiff.