§ 129 — Notice of deficiency

§ 129. Notice of deficiency. (a) General.--If upon examination of a\ntaxpayer's return under this title the director of finance determines\nthat there is a deficiency of income tax, he may mail a notice of\ndeficiency to the taxpayer. If a taxpayer fails to file a return\nrequired under this title, the director of finance is authorized to\nestimate the taxpayer's city unincorporated business taxable income and\ntax thereon, from any information in his possession, and to mail a\nnotice of deficiency to the taxpayer. A notice of deficiency shall be\nmailed by certified or registered mail to the taxpayer at his last known\naddress in or out of the city. If the taxpayer is deceased or under a\nlegal disability, a notice of deficiency may be mailed to his last known\naddress in or out of the city, unless the director of finance has\nreceived notice of the existence of a fiduciary relationship with\nrespect to the taxpayer.\n (b) Notice of deficiency as assessment.--After ninety days from the\nmailing of a notice of deficiency, such notice shall be an assessment of\nthe amount of tax specified in such notice, together with the interest,\nadditions to tax and penalties stated in such notice, except only for\nany such tax or other amounts as to which the taxpayer has within such\nninety day period filed with the director of finance a petition under\nsection one hundred thirty-seven. If the notice of deficiency is\naddressed to a person outside of the United States, such period shall be\none hundred fifty days instead of ninety days.\n (c) Restrictions on assessment and levy.--No assessment of a\ndeficiency in tax and no levy or proceeding in court for its collection\nshall be made, begun or prosecuted, except as otherwise provided in\nsection one hundred forty-two, until a notice of deficiency has been\nmailed to the taxpayer, nor until the expiration of the time for filing\na petition contesting such notice, nor, if a petition with respect to\nthe taxable year has been filed with the director of finance, until the\ndecision of the director of finance has become final. For exception in\nthe case of judicial review of the decision of the director of finance,\nsee subdivision (c) of section one hundred thirty-eight.\n (d) Exceptions for mathematical errors.--If a mathematical error\nappears on a return (including an overstatement of the amount paid as\nestimated income tax), the director of finance shall notify the taxpayer\nthat an amount of tax in excess of that shown upon the return is due,\nand that such excess has been assessed.\n Such notice shall not be considered as a notice of deficiency for the\npurposes of this section, subdivision (f) of section one hundred\nthirty-five (limiting credits or refunds after petition to the director\nof finance), or subdivision (b) of section one hundred thirty-seven\n(authorizing the filing of a petition with the director of finance based\non a notice of deficiency) nor shall such assessment or collection be\nprohibited by the provisions of subdivision (c).\n (e) Exception where change in federal taxable income is not\nreported.--(1) If the taxpayer fails to comply with section one hundred\ntwenty-seven in not reporting a change or correction increasing or\ndecreasing his federal taxable income as reported on his federal income\ntax return or in not reporting a change or correction which is treated\nin the same manner as if it were a deficiency for federal income tax\npurposes or in not filing an amended return or in not reporting the\nexecution of a notice of waiver described in such section, instead of\nthe mode and time of assessment provided for in subdivision (b) of this\nsection, the commissioner of finance may assess a deficiency based upon\nsuch changed or corrected federal taxable income by mailing to the\ntaxpayer a notice of additional tax due specifying the amount of the\ndeficiency, and such deficiency, together with the interest, additions\nto tax and penalties stated in such notice, shall be deemed assessed on\nthe date such notice is mailed unless within thirty days after the\nmailing of such notice a report of the federal change or correction or\nan amended return, where such return was required by section one hundred\ntwenty-seven, is filed accompanied by a statement showing wherein such\nfederal determination and such notice of additional tax due are\nerroneous.\n (2) Such notice shall not be considered as a notice of deficiency for\nthe purposes of this section, subdivision (f) of section one hundred\nthirty-five (limiting credits or refunds after petition to the director\nof finance), or subdivision (b) of section one hundred thirty-seven\n(authorizing the filing of a petition with the director of finance based\non a notice of deficiency), nor shall such assessment or the collection\nthereof be prohibited by the provisions of subdivision (c).\n (3) If the taxpayer is deceased or under a legal disability, a notice\nof additional tax due may be mailed to his last known address in or out\nof the city, unless the director of finance has received notice of the\nexistence of a fiduciary relationship with respect to the taxpayer.\n (f) Waiver of restrictions.--The taxpayer shall at any time (whether\nor not a notice of deficiency has been issued) have the right to waive\nthe restrictions on assessment and collection of the whole or any part\nof the deficiency by a signed notice in writing filed with the director\nof finance.\n (g) Deficiency defined.-- For purposes of this title, a deficiency\nmeans the amount of the tax imposed by this title, less (i) the amount\nshown as the tax upon the taxpayer's return (whether the return was made\nor the tax computed by him or by the director of finance), and less,\n(ii) the amounts previously assessed (or collected without assessment)\nas a deficiency and plus (iii) the amount of any rebates. For the\npurpose of this definition, the tax imposed by this title and the tax\nshown on the return shall both be determined without regard to payments\non account of estimated tax; and a rebate means so much of an abatement,\ncredit, refund or other repayment (whether or not erroneous) made on the\nground that the amounts entering into the definition of a deficiency\nshowed a balance in favor of the taxpayer.\n (h) Exception where change or correction of sales and compensating use\ntax liability is not reported.--(1) If a taxpayer fails to comply with\nsection one hundred twenty-seven-A in not reporting a change or\ncorrection of his sales and compensating use tax liability or in not\nfiling a copy of an amended return or report relating to his sales and\ncompensating use tax liability, instead of the mode and time of\nassessment provided for in subdivision (b) of this section, the\ncommissioner of finance may assess a deficiency based upon such changed\nor corrected sales and compensating use tax liability, as same relates\nto credits claimed under section one hundred one, by mailing to the\ntaxpayer a notice of additional tax due specifying the amount of the\ndeficiency, and such deficiency, together with the interest, additions\nto tax and penalties stated in such notice, shall be deemed assessed on\nthe date such notice is mailed unless within thirty days after the\nmailing of such notice a report of the state change or correction or a\ncopy of an amended return or report, where such copy was required by\nsection one hundred twenty-seven-A, is filed accompanied by a statement\nshowing wherein such state determination and such notice of additional\ntax due are erroneous.\n (2) Such notice shall not be considered as a notice of deficiency for\nthe purposes of this section, subdivision (f) of section one hundred\nthirty-five (limiting credits or refunds after petition to the\ncommissioner of finance), or subdivision (b) of section one hundred\nthirty-seven (authorizing the filing of a petition with the commissioner\nof finance based on a notice of deficiency), nor shall such assessment\nor the collection thereof be prohibited by the provisions of subdivision\n(c) of this section.\n (3) If the taxpayer is deceased or under a legal disability, a notice\nof additional tax due may be mailed to his last known address in or out\nof the city, and such notice shall be sufficient for purposes of this\ntitle. If the commissioner of finance has received notice that a person\nis acting for the taxpayer in a fiduciary capacity, a copy of such\nnotice shall also be mailed to the fiduciary named in such notice.\n