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

§ 1701. Financial institution data match system for state tax\ncollection purposes. 1. Definitions. As used in this section:\n * (a) "Debt" means past-due tax liabilities, including unpaid tax,\ninterest, and penalty, that the commissioner is required by law to\ncollect and that have become fixed and final such that the taxpayer no\nlonger has any right to administrative or judicial review.\n * NB Effective until April 1, 2030\n * (a) "Debt" means all liabilities, including unpaid tax, interest,\nand penalty, that the commissioner is required by law to collect and\nthat have been reduced to judgment by the docketing of a New York state\ntax warrant in the office of a county clerk located in the state of New\nYork or by the filing of a copy of the warrant in the office of the\ndepartment of state.\n * NB Effective April 1, 2030\n (b) "Tax debtor" means a natural person or any entity other than a\nnatural person named on a New York state tax warrant and identified\nthereon as a judgment debtor.\n (c) "Financial institution" means (i) any financial institution\nauthorized or required to participate in a financial institution data\nmatch system or program for child support enforcement purposes under\nfederal or state law, and (ii) any virtual currency business licensed by\nthe superintendent of financial services.\n 2. Financial institution data match system for state tax collection\npurposes. * (a) To assist the commissioner in the collection of debts,\nthe department must develop and operate a financial institution data\nmatch system for the purpose of identifying and seizing the non-exempt\nassets of tax debtors as identified by the commissioner. The\ncommissioner is authorized to designate a third party to develop and\noperate this system. Notwithstanding any other provisions of this\nchapter, the commissioner is authorized to disclose the debt and the\ndebtor information to such third party and to financial institutions for\npurposes of this system. Any third party designated by the commissioner\nto develop and operate a financial data match system must keep all\ninformation it obtains from both the department and the financial\ninstitution confidential, and any employee, agent or representative of\nthat third party is prohibited from disclosing that information to\nanyone other than the department or the financial institution.\n * NB Effective until April 1, 2030\n * (a) To assist the commissioner in the collection of debts, the\ndepartment must develop and operate a financial institution data match\nsystem for the purpose of identifying and seizing the non-exempt assets\nof tax debtors as identified by the commissioner. The commissioner is\nauthorized to designate a third party to develop and operate this\nsystem. Any third party designated by the commissioner to develop and\noperate a financial data match system must keep all information it\nobtains from both the department and the financial institution\nconfidential, and any employee, agent or representative of that third\nparty is prohibited from disclosing that information to anyone other\nthan the department or the financial institution.\n * NB Effective April 1, 2030\n (b) Each financial institution doing business in the state must, in\nconjunction with the commissioner or the commissioner's authorized\ndesignee, develop and operate a data match system to facilitate the\nidentification and seizure of non-exempt financial assets of tax debtors\nidentified by the commissioner or the commissioner's authorized\ndesignee. If a financial institution has a data match system developed\nor used to administer the child support enforcement programs of this\nstate, and if that system is approved by the commissioner or the\ncommissioner's authorized designee, the financial institution may use\nthat system to comply with the provisions of this section.\n 3. Each financial institution must provide identifying information\neach calendar quarter to the department for each tax debtor identified\nby the department who or that maintains an account at the institution.\nThe identifying information must include the tax debtor's name, address,\nand social security number or other taxpayer identification number, and\nall account numbers and balances in each account.\n 4. A financial institution that complies with this section will not be\nliable under state law to any person for the disclosure of information\nto the commissioner or the commissioner's authorized designee, or any\nother action taken in good faith to comply with this section.\n 5. Both the financial institution furnishing a report to the\ncommissioner under this section and the commissioner's authorized\ndesignee are prohibited from disclosing to the tax debtor that the name\nof the tax debtor has been received from or furnished to the\ncommissioner, unless authorized in writing by the commissioner to do so.\nA violation of this subdivision will result in the imposition of a civil\npenalty equal to the greater of one thousand dollars or the amount in\nthe account of the person to whom the disclosure was made for each\ninstance of unauthorized disclosure by the financial institution. That\ncivil penalty can be assessed and collected under this chapter as if\nthat penalty were tax.\n 6. A financial institution may disclose to its depositors or account\nholders that the department has the authority to request certain\nidentifying information on certain depositors or account holders under\nthe financial institution data match system for state tax collection\npurposes.\n