N.Y. Tax Law § 998 — Petition to the surrogate's court and appeal

§ 998. Petition to the surrogate's court and appeal. (a) General. A\ntaxpayer shall have the right to protest a notice of deficiency or a\nnotice of disallowance of a claim for refund issued by the commissioner\nof taxation and finance with respect to tax under this article as\nprovided in this section. A proceeding under this section shall be a\nspecial proceeding under article four of the civil practice law and\nrules and shall be commenced by filing a notice of petition and verified\npetition with the surrogate's court and service of such notice of\npetition and verified petition on the commissioner of taxation and\nfinance or the commissioner's attorney. In any county which has\ndesignated a transfer and estate clerk of the court, the filing of the\nnotice of petition and verified petition with the surrogate's court\nshall be effected by filing such notice of petition and verified\npetition with such clerk. The notice of petition, together with the\npetition and any affidavits specified in the notice, shall be so filed\nand served at least forty-five days before the time at which the\npetition is noticed to be heard. An answer and supporting affidavits, if\nany, shall be served at least ten days before such time. A reply,\ntogether with supporting affidavits, if any, shall be served at least\nfive days before such time. No petition shall be denied without\nopportunity for a hearing of any issues of fact raised therein.\n (b) Conciliation conferences. The provisions of subdivision three-a of\nsection one hundred seventy of this chapter regarding conciliation\nconferences in the bureau of conciliation and mediation services shall\nbe applicable with respect to a notice of deficiency or disallowance of\na refund of tax under this article provided, however, the references to\n"the division of tax appeals" shall be deemed to be references to "the\nsurrogate's court" for purposes of the tax under this article and\nreferences to filing a petition shall be deemed to be references to the\ncommencement of a special proceeding under this section.\n (c) Jurisdiction and venue. The surrogate's court of every county\nhaving jurisdiction of the estate of a decedent under the provisions of\nsections two hundred five and two hundred six of the surrogate's court\nprocedure act shall have jurisdiction of proceedings under this section.\nVenue of such proceedings shall be as provided in such sections.\n (d) Petition for review of a deficiency. Within ninety days, or one\nhundred fifty days if the notice is addressed to a person outside of the\nUnited States, after the mailing of the notice of deficiency of estate\ntax, the taxpayer may commence a special proceeding pursuant to this\nsection in the surrogate's court for review of the deficiency. Such\npetition may also assert a claim for refund of tax under this article,\nsubject to the limitations of subsection (g) of section six hundred\neighty-seven of this chapter, as made applicable to the tax imposed\nunder this article by section nine hundred ninety.\n (e) Petition for refund. (1) A taxpayer may commence a special\nproceeding with the surrogate's court under this section for the amounts\nasserted in a claim for refund if--\n (A) the taxpayer has filed a timely claim for refund with the\ncommissioner of taxation and finance,\n (B) the taxpayer has not previously commenced a special proceeding\nunder subsection (d) regarding the tax imposed by this article with\nrespect to the death of the same decedent unless the petition under this\nsubsection relates to a separate claim for refund properly filed under\nsubsection (f) of section six hundred eighty-seven, as made applicable\nto the tax imposed by this article by section nine hundred ninety, and\n (C) either (i) six months have expired since the claim was filed, or\n(ii) the commissioner has mailed to the taxpayer, by registered or\ncertified mail, a notice of disallowance of such claim in whole or in\npart.\n (2) No special proceeding under this subsection shall be filed more\nthan two years after the date of mailing of a notice of disallowance,\nunless prior to the expiration of such two year period it has been\nextended by written agreement between the taxpayer and the commissioner\nof taxation and finance. If a taxpayer files a written waiver of the\nrequirement that such taxpayer be mailed a notice of disallowance, the\ntwo year period prescribed by this paragraph for filing a petition for\nrefund shall begin on the date such waiver is filed.\n (f) Assertion of deficiency after filing petition.\n (1) Petition for review of deficiency. If a taxpayer commences a\nspecial proceeding for review of a deficiency, the commissioner may\nassert and the surrogate's court shall have power to determine a greater\ndeficiency than asserted in the notice of deficiency and the\ncommissioner may assert and the surrogate's court shall have power to\ndetermine any addition to tax or penalty.\n (2) Petition for refund. If the taxpayer commences a special\nproceeding for refund, the commissioner may assert and the surrogate's\ncourt may determine:\n (A) a deficiency as to any amount of deficiency asserted within the\nperiod in which an assessment would be timely, or\n (B) deny so much of the amount for which refund is sought in the\npetition, as is offset by other issues pertaining to the taxpayer.\n (3) Opportunity to respond. A taxpayer shall be given a reasonable\nopportunity to respond to any matters asserted by the commissioner under\nthis subsection.\n (4) Restriction on further notices of deficiency. If the taxpayer\ncommences a special proceeding under this section, no notice of\ndeficiency of estate tax may thereafter be issued to the taxpayer\nregarding the tax imposed by this article with respect to the death of\nthe same decedent, except in case of fraud or with respect to a change\nor correction required to be reported under section nine hundred\nseventy-nine.\n (g) Burden of proof. In any case before the surrogate's court under\nthis section, the burden of proof shall be upon the petitioner, except\nfor the following issues, as to which the burden of proof shall be upon\nthe commissioner:\n (1) whether the petitioner has been guilty of fraud with intent to\nevade tax;\n (2) whether the petitioner is liable as the transferee of property of\na taxpayer, but not to show that the taxpayer was liable for the tax;\n (3) whether the petitioner is liable for any increase in a deficiency\nwhere such increase is asserted initially after a notice of deficiency\nwas mailed and a special proceeding commenced under this section, unless\nsuch increase in deficiency is the result of a change or correction\nrequired to be reported under section nine hundred seventy-nine, and of\nwhich change or correction the commissioner of taxation and finance had\nno notice at the time the commissioner mailed the notice of deficiency;\nand\n (4) whether any person is liable for a penalty under subsection (k) or\n(r) of section six hundred eighty-five of this chapter, as made\napplicable to the tax imposed by this article by section nine hundred\nninety.\n (h) Review under this section exclusive. The review of a deficiency or\ndenial of a refund provided by this section shall be the exclusive\nremedy available for the judicial review of the liability of the\ntaxpayer for the taxes imposed by this article.\n (i) Appeal; assessment pending appeal; appeal bond. (1) The taxpayer\nor the commissioner of taxation and finance may appeal from a decree\nentered in a special proceeding pursuant to this section as provided in\nsection two thousand seven hundred one of the surrogate's court\nprocedure act.\n (2) Irrespective of any restrictions on the assessment and collection\nof deficiencies, the commissioner may assess a deficiency determined by\nthe surrogate's court after the expiration of the period during which a\nnotice of appeal may be filed, notwithstanding that a notice of appeal\nhas been filed by the taxpayer with respect to such deficiency, unless\nthe taxpayer, at or before the time his notice of appeal is filed, has\npaid the deficiency, has deposited with the commissioner the amount of\nthe deficiency, or has filed with the commissioner a bond or other\nsecurity acceptable to the commissioner (which may be a jeopardy bond\nunder subsection (h) of section six hundred ninety-four, as made\napplicable to the tax imposed by this article by section nine hundred\nninety) in the amount of the portion of the deficiency (including\ninterest and other amounts) in respect of which the appeal is made and\nall costs and charges which may accrue against the taxpayer in the\nprosecution of the proceeding, including costs of all appeals,\nconditioned upon the payment of the deficiency (including interest and\nother amounts) as finally determined and such costs and charges. If as a\nresult of a waiver of the restrictions on the assessment and collection\nof a deficiency any part of the amount determined by the commissioner is\npaid after the filing of the review bond or other security, such bond or\nother security shall, at the request of the taxpayer, be proportionately\nreduced.\n (3) If the amount of a deficiency determined by the commissioner is\ndisallowed in whole or in part by the court, the amount so disallowed\nshall be credited or refunded to the taxpayer, without the making of a\nclaim therefor, or, if payment has not been made, shall be abated.\n (j) Date of finality of decree. A decree of the surrogate's court\nshall become final upon the expiration of the time for filing a notice\nof appeal if no such notice is filed within such time, or if a notice of\nappeal has been duly filed, upon expiration of the time for all judicial\nreview, or upon the entry of a decree of the surrogate's court in\naccordance with the mandate of the court on appeal.\n