N.Y. Tax Law § 997 — Extensions of time for payment of estate tax where estate consists largely of interest in closely held businesses

§ 997. Extensions of time for payment of estate tax where estate\nconsists largely of interest in closely held businesses. The provisions\nof section 6166 of the internal revenue code shall apply to this section\nto the same extent as if such section of such code were contained in and\nmade part of this section (whether or not a federal estate tax return is\nrequired to be filed) except as provided herein:\n (a) The phrase "adjusted gross estate" shall be read as "adjusted\nfederal gross estate determined without reference to paragraphs (1), (2)\nand (3) of subsection (a) of section nine hundred fifty-four" of this\narticle.\n (b) The phrase "section 2001" shall be read as "section nine hundred\nfifty-two or section nine hundred sixty" of this article.\n (c) The phrase "the date prescribed by section 6151(a) for payment of\nthe tax" shall be read as "the date prescribed by this article for the\npayment of the tax (without regard to any extension of time)".\n (d) The term "secretary" shall be read as "commissioner of taxation\nand finance".\n (e) Election. The election under this section shall not be allowed\nunless a similar election was made and allowed with respect to the\nfederal estate tax return required to be filed under the provisions of\nthe internal revenue code. If such election was made for the purposes of\nthe federal estate tax, the time for making the election under this\narticle shall be the same as is required under the federal estate tax.\nWhere no federal estate tax return is required to be filed, the election\nwith respect to the tax imposed under this article shall be made no\nlater than the date prescribed for the filing of the return under this\narticle (including extensions thereof) or any time thereafter as the\ncommissioner of taxation and finance may by regulation prescribe.\n (f) The commissioner of taxation and finance may, at any time, require\na bond to be filed with him, which bond has been issued by a surety\ncompany approved by the superintendent of financial services as to\nsolvency and responsibility and authorized to transact business in this\nstate or other security acceptable to such commissioner, in an amount\nnot exceeding twice the amount for which the time for payment has been\nextended under this section, to secure the payment of the estate tax and\ninterest, the time for payment of which has been extended under this\nsection.\n (g) If an acceleration of payment occurs with respect to the tax\nimposed by this article, the extension of time for payment of the tax\nimposed by this article shall cease to apply and any unpaid portion of\nthe tax payable in installments shall be paid upon notice and demand\nfrom the commissioner of taxation and finance. If any such acceleration\nof payment is avoided by a payment within six months of the due date\nthereof, then the provisions of subsection (j) of this section with\nrespect to a two percent rate of interest shall not apply to said\npayment and there is imposed a penalty of five percent of the amount of\nsuch payment multiplied by the number of months, or fractions thereof,\nafter the due date of the payment and before payment is made. Such\nacceleration of payment shall occur if:\n (1) any installment of estate tax imposed by this article is not paid\non or before the date fixed for its payment (including any extension of\ntime for the payment of such installment), or\n (2) the executor has been notified by the commissioner of taxation and\nfinance that a bond or other security is required, but no such bond or\nother security has been filed within thirty days from the date of\nmailing of such notification, or\n (3) an acceleration of payment has occurred with respect to the\nelection by the executor to pay part or all of the federal estate tax in\ninstallments or, where no federal estate tax return is required to be\nfiled, an acceleration of payment has occurred by virtue of the\nprovisions of subsection (g) of section 6166 of the internal revenue\ncode.\n (h) The commissioner of taxation and finance may, for reasonable cause\nand if his interests would not be jeopardized thereby, extend the time\nfor payment of any part of any installment under this subsection,\nincluding any part of a deficiency prorated to any installment under\nthis subsection, for a reasonable period (1) not in excess of ten years\nfrom the date prescribed for the filing of the return under this article\n(without regard to any extension of time to file) or (2) if the date\nprescribed for such filing is earlier than the date which is twelve\nmonths after the due date of the last installment, such later date.\n (i) If the time for payment of any amount of tax has been extended\nunder this subsection, interest shall be paid annually together with the\ninstallment of tax on any unpaid portion of such amount (including the\namount of any deficiency), at the rate prescribed in subsection (b) of\nsection nine hundred seventy-six of this article with respect to\nextensions of time for payment of estate tax (other than the extensions\nof time provided for in this section) or as otherwise provided for in\nsubsection (j) of this section.\n (j) If the time for payment of any amount of tax has been extended\nunder this section, the provisions of section 6166 of the internal\nrevenue code applicable to the payment of interest are modified as\nfollows:\n (1) Interest on the two percent portion of such amount shall be paid\nat the rate of two percent per annum. For purposes of this section, the\namount of any deficiency which is prorated to installments payable under\nthis section, shall be treated as an amount of tax payable in\ninstallments under such section.\n (2) For purposes of this paragraph, the term "two percent portion"\nmeans the lesser of fifty-four thousand dollars or the amount of the tax\nimposed by this article which is extended as provided in this section.\n (3) If the amount of tax imposed by this article which is extended\nexceeds the two percent portion, any payment of a portion of such amount\nshall, for purposes of computing interest for periods after such\npayment, be treated as reducing the two percent portion by an amount\nwhich bears the same ratio to the amount of such payment as the amount\nof the two percent portion (determined without regard to this paragraph)\nbears to the amount of tax which is extended.\n (4) Interest on any portion of the amount of tax which is not\nincludible in the two percent portion of such amount shall be payable at\nthe rate provided for in subsection (i) of this section.\n (5) (A) Interest payable on any unpaid portion of the amount of tax\ndue attributable to the first five years after the date prescribed for\npayment of the tax shall be paid annually;\n (B) interest payable on any unpaid portion of such amount of tax\nattributable to any period after the five year period referred to in\nsubparagraph (A) of this paragraph shall be paid annually at the same\ntime as and as part of, each installment payment of the tax;\n (C) in the case of a deficiency to which subsection (e) of section\n6166 of the internal revenue code applies is determined after the close\nof the five year period referred to in subparagraph (A) of this\nparagraph, interest attributable to such five year period, and interest\nassigned under subparagraph (B) of this paragraph to any installment,\nthe date of payment of which has arrived on or before the date of such\ndetermination, shall be paid upon notice and demand from the\ncommissioner of taxation and finance; and\n (D) if the executor has selected a period shorter than five years,\nsuch shorter period shall be substituted for five years in subparagraphs\n(A), (B) and (C) of this paragraph. Any period of time selected for the\npurposes of the tax under this article shall in no event be greater than\nthe period of time selected for the purpose of the estate tax imposed by\nthe internal revenue code.\n (k) The lien of the tax provided for in section nine hundred\neighty-two of this article shall be applicable to the same extent as if\nno election had been made to extend the time for payment of estate tax\nunder this section.\n