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

§ 1138. Determination of tax. (a) (1) If a return required by this\narticle is not filed, or if a return when filed is incorrect or\ninsufficient, the amount of tax due shall be determined by the\ncommissioner from such information as may be available. If necessary,\nthe tax may be estimated on the basis of external indices, such as stock\non hand, purchases, rental paid, number of rooms, location, scale of\nrents or charges, comparable rents or charges, type of accommodations\nand service, number of employees or other factors. In the case of retail\nfood stores and other participants approved for participation in the\nfederal food stamp program under or pursuant to the federal food stamp\nact of nineteen hundred seventy-seven (7 U.S.C. § 2011 et seq.), as\namended, whose records are incomplete or inadequate to determine tax,\nthe external indices upon which tax may be estimated and determined may\nalso include information contained in applications, updates of\napplications, redemption certificates, returns and reports which such\nretail food stores and other participants furnish to or are furnished by\nthe United States government or this state or their agencies in order\nfor such retail food stores and other participants to participate in the\nfood stamp program or to redeem coupons issued under or pursuant to such\nfood stamp act and any other available information considered relevant.\nNotice of such determination shall be mailed to the person or persons\nliable for the collection or payment of the tax. A notice of\ndetermination shall be mailed by certified or registered mail to the\nperson or persons liable for the collection or payment of the tax at his\nlast known address in or out of this state. If such person or persons is\ndeceased or under a legal disability, a notice of determination may be\nmailed to his last known address in or out of this state, unless the\ndepartment has received notice of the existence of a fiduciary\nrelationship with respect to the taxpayer. After ninety days from the\nmailing of a notice of determination, such notice shall be an assessment\nof the amount of tax specified in such notice, together with the\ninterest, additions to tax and penalties stated in such notice, except\nonly for any such tax or other amounts as to which the taxpayer has\nwithin such ninety day period applied to the division of tax appeals for\na hearing, or unless the commissioner of his own motion shall\nredetermine the same. If the notice of determination is addressed to a\nperson outside of the United States, such period shall be one hundred\nfifty days instead of ninety days.\n (2) Whenever such tax is estimated as provided for in this section,\nsuch notice shall contain a statement in bold face type conspicuously\nplaced on such notice advising the taxpayer: that the amount of the tax\nwas estimated; that the tax may be challenged through a hearing process;\nand that the petition for such challenge must be filed with the tax\ncommission within ninety days.\n (3) (A) The liability of a purchaser, transferee or assignee of\nbusiness assets sold, transferred or assigned in bulk for the payment to\nthe state of taxes determined to be due from the seller, transferor or\nassignor arising under subdivision (c) of section eleven hundred\nforty-one of this chapter shall be an assessment of the liability\ndetermined unless the purchaser, transferee or assignee, within ninety\ndays after the giving of notice by the tax commission to such purchaser,\ntransferee or assignee of the total amount of any tax or taxes which the\nstate claims to be due from the seller, transferor or assignor, shall\napply to the tax commission for a hearing or unless the tax commission,\non its own motion, shall redetermine such liability. Where the tax\ncommission determines that the amount of taxes claimed to be due from\nthe seller, transferor or assignor is erroneous or excessive in whole or\nin part it shall, on behalf of the purchaser, transferee or assignee,\ndetermine the amount of tax or taxes properly due and if such amount is\nless than the amount of taxes for which the purchaser would have been\nliable in the absence of such determination it shall reduce such\nliability accordingly. The commission may, on its motion, abate, on\nbehalf of the purchaser, transferee or assignee, any part of the taxes\ndetermined to be erroneous or excessive, whether or not such taxes had\nbecome finally and irrevocably fixed.\n (B) The liability, pursuant to subdivision (a) of section eleven\nhundred thirty-three of this article, of any officer, director or\nemployee of a corporation or of a dissolved corporation, member or\nemployee of a partnership or employee of an individual proprietorship\nwho as such officer, director, employee or member is under a duty to act\nfor such corporation, partnership or individual proprietorship in\ncomplying with any requirement of this article for the tax imposed,\ncollected or required to be collected, or for the tax required to be\npaid or paid over to the commissioner under this article, and the amount\nof such tax liability (whether or not a return is filed under this\narticle, whether or not such return when filed is incorrect or\ninsufficient, or where the tax shown to be due on the return filed under\nthis article has not been paid or has not been paid in full) shall be\ndetermined by the commissioner in the manner provided for in paragraphs\none and two of this subdivision. Such determination shall be an\nassessment of the tax and liability for the tax with respect to such\nperson unless such person, within ninety days after the giving of notice\nof such determination, shall apply to the division of tax appeals for a\nhearing. If such determination is identical to or arises out of a\npreviously issued determination of tax of the corporation, dissolved\ncorporation, partnership or individual proprietorship for which such\nperson is under a duty to act, an application filed with the division of\ntax appeals on behalf of the corporation, dissolved corporation,\npartnership or individual proprietorship shall be deemed to include any\nand all subsequently issued personal determinations and a separate\napplication to the division of tax appeals for a hearing shall not be\nrequired. The commissioner may, nevertheless, of their own motion,\nredetermine such determination of tax or liability for tax. Where the\ncommissioner determines or redetermines that the amount of tax claimed\nto be due from a vendor of tangible personal property or services, a\nrecipient of amusement charges, or an operator of a hotel or short term\nrental unit is erroneous or excessive in whole or in part, they shall\nredetermine the amount of tax properly due from any such person as a\nperson required to collect tax with respect to such vendor, recipient,\nor operator, and if such amount is less than the amount of tax for which\nsuch person would have been liable in the absence of such determination\nor redetermination, they shall reduce such liability accordingly.\nFurthermore, the commissioner may, of their own motion, abate on behalf\nof any such person, any part of the tax determined to be erroneous or\nexcessive whether or not such tax had become finally and irrevocably\nfixed with respect to such person but no claim for abatement may be\nfiled by any such person. The provisions of this paragraph shall not be\nconstrued to limit in any manner the powers of the attorney general\nunder subdivision (a) of section eleven hundred forty-one of this part\nor the powers of the commissioner to issue a warrant under subdivision\n(b) of such section against any person whose liability has become\nfinally and irrevocably fixed.\n (C) The liability of any person as an owner of a filling station, for\nthe penalty imposed by subparagraph (vii) of paragraph one of\nsubdivision (a) of section eleven hundred forty-five, and the amount of\nsuch penalty shall be determined by the tax commission. Such\ndetermination shall be an assessment of the amount of and liability for\npenalty with respect to such person unless such person, within ninety\ndays after the giving of notice of such determination, shall apply to\nthe tax commission for a hearing. The tax commission may, nevertheless,\nof its own motion, redetermine such determination or liability for\npenalty. Furthermore, the tax commission may, of its own motion, abate\nany part of the penalty determined to be erroneous or excessive whether\nor not such penalty has become finally and irrevocably fixed with\nrespect to such person but no claim for abatement may be filed by any\nsuch person. The provisions of this paragraph shall not be construed to\nlimit in any manner the powers of the attorney general under subdivision\n(a) of section eleven hundred forty-one of this article or the powers of\nthe tax commission to issue a warrant under subdivision (b) of such\nsection against any person whose liability has become finally and\nirrevocably fixed.\n (D) The liability of any person, as an owner of a place of business\nselling cigarettes at retail, for the penalty imposed by subparagraph\n(viii) of paragraph one of subdivision (a) of section eleven hundred\nforty-five of this article and the amount of such penalty shall be\ndetermined by the commissioner. Such determination shall be an\nassessment of the amount of and liability for such penalty with respect\nto such person, unless such person, within ninety days after the giving\nof notice of such determination, shall apply to the division of tax\nappeals for a hearing. The commissioner may, nevertheless, on the\ncommissioner's own motion, redetermine such determination. Furthermore,\nthe commissioner may, on the commissioner's own motion, abate any part\nof the penalty determined to be erroneous or excessive whether or not\nsuch penalty has become finally and irrevocably fixed with respect to\nsuch person; but no claim for abatement may be filed by any such person.\nThe provisions of this paragraph shall not be construed to limit in any\nmanner the powers of the attorney general under subdivision (a) of\nsection eleven hundred forty-one of this article or the powers of the\ncommissioner to issue a warrant under subdivision (b) of such section\nagainst any person whose liability has become finally and irrevocably\nfixed.\n (E) In addition to any other liability a credit card issuer or fuel\ndistributor may have, the commissioner shall determine any or all of the\nfollowing liabilities: (1) any tax, interest or penalty liability of a\ncredit card issuer or fuel distributor for any credit allowed or refund\npaid under subdivision (h) of section eleven hundred thirty-nine of this\npart which was erroneously, illegally or unconstitutionally allowed or\npaid to such credit card issuer or fuel distributor, or (2) the penalty\nimposed by subparagraph (ix) of paragraph one of subdivision (a) of\nsection eleven hundred forty-five of this part. In any such instance,\nthe commissioner shall give the credit card issuer or fuel distributor\nnotice of such determination in the manner described in paragraph one\nand two of this subdivision. Such determination shall be an assessment\nof any such liability unless such credit card issuer or fuel\ndistributor, within ninety days after the giving of such notice and\ndetermination, shall apply to the commissioner for a hearing. The\ncommissioner may, nevertheless, of his or her own motion, redetermine\nsuch determination or liability for penalty. Furthermore, the\ncommissioner may, of his or her own motion, abate any part of the\npenalty determined to be erroneous or excessive whether or not such\npenalty has become finally and irrevocably fixed with respect to such\nissuer or fuel distributor but no claim of abatement may be filed by\nsuch issuer or fuel distributor. The provisions of this paragraph shall\nnot be construed to limit in any manner the powers of the attorney\ngeneral under subdivision (a) of section eleven hundred forty-one of\nthis part or the powers of the commissioner to issue a warrant under\nsubdivision (b) of such section against any such issuer or fuel\ndistributor whose liability has become finally and irrevocably fixed.\n (4) After the hearing provided for in paragraph one or three of this\nsubdivision, the division of tax appeals shall give notice promptly by\nregistered or certified mail of the determination of the administrative\nlaw judge to the petitioner and to the commissioner of taxation and\nfinance. Such determination may be reviewed by the tax appeals tribunal\nas provided in article forty of this chapter. The decision of the tax\nappeals tribunal may be reviewed as provided in section two thousand\nsixteen of this chapter. Such a proceeding for judicial review shall not\nbe instituted unless the amount of any tax sought to be reviewed, with\npenalties and interest thereon, if any, shall be first deposited with\nthe commissioner of taxation and finance and there shall be filed with\nthe commissioner of taxation and finance an undertaking, issued by a\nsurety company authorized to transact business in this state and\napproved by the superintendent of financial services of this state as to\nsolvency and responsibility, in such amount as a justice of the supreme\ncourt shall approve to the effect that if such proceeding be dismissed\nor the tax confirmed the petitioner will pay all costs and charges which\nmay accrue in the prosecution of the proceeding, or at the option of the\npetitioner such undertaking filed with the commissioner of taxation and\nfinance may be in a sum sufficient to cover the taxes, penalties and\ninterest thereon stated in such determination plus the costs and charges\nwhich may accrue against him in the prosecution of the proceeding, in\nwhich event the petitioner shall not be required to deposit such taxes,\npenalties and interest as a condition precedent to the commencement of\nthe proceeding. The preceding sentence shall not apply to a proceeding\nbrought to review a determination made under subparagraph (B) of\nparagraph three of this subdivision.\n (b) If the tax commission believes that the collection of any tax will\nbe jeopardized by delay it may determine the amount of such tax and\nassess the same, together with all interest and penalties provided by\nlaw, against any person liable therefor prior to the filing of his\nreturn and prior to the date when his return is required to be filed.\nThe amount so determined shall become due and payable to the tax\ncommission by the person against whom such a jeopardy assessment is\nmade, as soon as notice thereof is given to him personally or by\nregistered or certified mail. The provisions of subdivision (a) of this\nsection shall apply to any such determination except to the extent that\nthey may be inconsistent with the provisions of this subdivision. The\ntax commission may abate any jeopardy assessment if it finds that\njeopardy does not exist. The collection of any jeopardy assessment may\nbe stayed by filing with the tax commission a bond issued by a surety\ncompany authorized to transact business in this state and approved by\nthe superintendent of financial services as to solvency and\nresponsibility, conditioned upon payment of the amount assessed and\ninterest thereon, or any lesser amount to which such assessment may be\nreduced by the tax commission or by a proceeding under article\nseventy-eight of the civil practice law and rules as provided in\nsubdivision (a), such payment to be made when the assessment or any such\nreduction thereof shall have become final and not subject to further\nreview. If such a bond is filed and thereafter a proceeding under\narticle seventy-eight is commenced as provided in subdivision (a),\ndeposit of the taxes, penalties and interest assessed shall not be\nrequired as a condition precedent to the commencement of such\nproceeding. Where a jeopardy assessment is made, any property seized for\nthe collection of the tax shall not be sold (1) until expiration of the\ntime to apply for a hearing as provided in subdivision (a) of this\nsection, and (2) if such application is timely filed, until the\nexpiration of four months after the tax commission has given notice of\nits determination to the person against whom the assessment is made;\nprovided, however, such property may be sold at any time if such person\nhas failed to attend a hearing of which he has been duly notified, or if\nhe consents to the sale, or if the tax commission determines that the\nexpenses of conservation and maintenance will greatly reduce the net\nproceeds, or if the property is perishable.\n (c) A person liable for collection or payment of tax (whether or not a\ndetermination assessing a tax pursuant to subdivision (a) of this\nsection has been issued) shall be entitled to have a tax due assessed\nprior to the ninety-day period referred to in subdivision (a) of this\nsection, by filing with the tax commission a signed statement in\nwriting, in such form as the tax commission shall prescribe, consenting\nthereto.\n (d) Except as otherwise provided in subdivision (a) of this section,\nthe provisions of this section shall not be applicable to the liability\nof a purchaser, transferee or assignee arising under the provisions of\nsubdivision (c) of section eleven hundred forty-one of this chapter.\n