§ 72 — Notice of Deficiency

§ 72. Notice of Deficiency. 1. General.--If upon examination of a\ntaxpayer's return, the director of finance determines that there is a\ndeficiency of tax, it may mail a notice of deficiency to the taxpayer.\nIf a taxpayer fails to file a tax return, the director of finance is\nauthorized to estimate the taxpayer's city tax liability from any\ninformation in his possession, and to mail a notice of deficiency to the\ntaxpayer. A notice of deficiency shall be mailed by certified or\nregistered mail to the taxpayer at its last known address in or out of\nthe city. If the taxpayer has terminated its existence, a notice of\ndeficiency may be mailed to its last known address in or out of the\ncity, and such notice shall be sufficient for purposes of this part. If\nthe director of finance has received notice that a person is acting for\nthe taxpayer in a fiduciary capacity, a copy of such notice shall also\nbe mailed to the fiduciary named in such notice.\n 2. 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 eighty. If the notice of deficiency is addressed to a taxpayer\nwhose last known address is outside of the United States, such period\nshall be one hundred fifty days instead of ninety days.\n 3. Restrictions on assessment and levy.--No assessment of a deficiency\nin tax and no levy or proceeding in court for its collection shall be\nmade, begun or prosecuted, except as otherwise provided in section\neighty-five, until a notice of deficiency has been mailed to the\ntaxpayer, nor until the expiration of the time for filing a petition\ncontesting such notice, nor, if a petition with respect to the taxable\nyear has been filed with the director of finance, until the decision of\nthe director of finance has become final. For exception in the case of\njudicial review of the decision of the director of finance, see\nsubdivision three of section eighty-one.\n 4. Exceptions for mathematical errors.--If a mathematical error\nappears on a return (including an overstatement of the amount paid as\nestimated tax), the director of finance shall notify the taxpayer that\nan amount of tax in excess of that shown upon the return is due, and\nthat such excess has been assessed. Such notice shall not be considered\nas a notice of deficiency for the purposes of this section, subdivision\nsix of section seventy-eight (limiting credits or refunds after petition\nto the director of finance), or subdivision two of section eighty\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 three of this section.\n 5. Exception where change in federal taxable income is not reported.--\n (a) If the taxpayer fails to comply with part two or part three of\nthis title in not reporting a change or correction or renegotiation, or\ncomputation or recomputation of tax, increasing or decreasing its\nfederal taxable income as reported on its federal income tax return or\nin not reporting a change or correction or renegotiation, or computation\nor a recomputaton of tax, which is treated in the same manner as if it\nwere a deficiency for federal income tax purposes or in not filing an\namended return or in not reporting the execution of a notice of waiver\nexecuted pursuant to subsection (d) of section six thousand two hundred\nthirteen of the internal revenue code instead of the mode and time of\nassessment provided for in subdivision two of this section, the\ncommissioner of finance may assess a deficiency based upon such\nincreased or decreased federal taxable income by mailing to the taxpayer\na notice of additional tax due specifying the amount of the deficiency,\nand such deficiency, together with the interest, additions to tax and\npenalties stated in such notice, shall be deemed assessed on the date\nsuch notice is mailed unless within thirty days after the mailing of\nsuch notice a report of the federal change or correction or\nrenegotiation, or computation or recomputation of tax, or an amended\nreturn, where such return was required by part two or part three, is\nfiled accompanied by a statement showing wherein such federal\ndetermination and such notice of additional tax due are erroneous.\n (b) Such notice shall not be considered as a notice of deficiency for\nthe purposes of this section, subdivision six of section seventy-eight\n(limiting credits or refunds after petition to the director of finance),\nor subdivision two of section eighty (authorizing the filing of a\npetition with the director of finance based on a notice of deficiency),\nnor shall such assessment or the collection thereof be prohibited by the\nprovisions of subdivision three of this section.\n (c) If the taxpayer has terminated its existence, a notice of\nadditional tax due may be mailed to its last known address in or out of\nthe city, and such notice shall be sufficient for purposes of this part.\nIf the director of finance has received notice that a person is acting\nfor the taxpayer in a fiduciary capacity, a copy of such notice shall\nalso be mailed to the fiduciary named in such notice.\n 6. Waiver of restrictions.--The taxpayer shall at any time (whether or\nnot a notice of deficiency has been issued) have the right to waive the\nrestrictions on assessment and collection of the whole or any part of\nthe deficiency by a signed notice in writing filed with the director of\nfinance.\n 7. Two or more corporations.--In the case of a combined return under\npart two or a consolidated return under part three of two or more\ncorporations, the director of finance may determine a deficiency of tax\nunder part two or part three with respect to the entire tax due upon\nsuch return against any taxpayer included therein. In the case of a\ntaxpayer which might have been included in such a return under part two\nor part three when the tax was originally reported, the director of\nfinance may determine a deficiency of tax under part two or part three\nagainst such taxpayer and against any other taxpayers which might have\nbeen included in such a return.\n 8. Deficiency defined.--For purposes of this part, a deficiency means\nthe amount of the tax imposed by the named parts, or any of them, less\n(a) the amount shown as the tax upon the taxpayer's return (whether the\nreturn was made or the tax computed by it or by the director of\nfinance), and less (b) the amounts previously assessed (or collected\nwithout assessment) as a deficiency and plus (c) the amount of any\nrebates. For the purpose of this definition, the tax imposed by part two\nor part three of this title and the tax shown on the return shall both\nbe determined without regard to any payment of estimated tax; and a\nrebate means so much of an abatement, credit, refund or other repayment\n(whether or not erroneous) as was made on the ground that the amounts\nentering into the definition of a deficiency showed a balance in favor\nof the taxpayer.\n 9. Exception where change or correction of sales and compensating use\ntax liability is not reported.\n (a) If a taxpayer fails to comply with part two of this title in not\nreporting a change or correction of its sales and compensating use tax\nliability or in not filing a copy of an amended return or report\nrelating to its sales and compensating use tax liability, instead of the\nmode and time of assessment provided for in subdivision two of this\nsection, the commissioner of finance may assess a deficiency based upon\nsuch changed or corrected sales and compensating use tax liability, as\nsame relates to credits claimed under part two of this title by mailing\nto the taxpayer a notice of additional tax due specifying the amount of\nthe deficiency, and such deficiency, together with the interest,\nadditions to tax and penalties stated in such notice, shall be deemed\nassessed on the date such notice is mailed unless within thirty days\nafter the mailing of such notice a report of the state change or\ncorrection or a copy of an amended return or report, where such copy was\nrequired by part two, is filed accompanied by a statement showing\nwherein such state determination and such notice of additional tax due\nare erroneous.\n (b) Such notice shall not be considered as a notice of deficiency for\nthe purposes of this section, subdivision six of section seventy-eight\n(limiting credits or refunds after petition to the commissioner of\nfinance), or subdivision two of section eighty (authorizing the filing\nof a petition with the commissioner of finance based on a notice of\ndeficiency), nor shall such assessment or the collection thereof be\nprohibited by the provisions of subdivision three of this section.\n (c) If the taxpayer has terminated its existence, notice of additional\ntax due may be mailed to its last known address in or out of the city,\nand such notice shall be sufficient for purposes of this part. If the\ncommissioner of finance has received notice that a person is acting for\nthe taxpayer in a fiduciary capacity, a copy of such notice shall also\nbe mailed to the fiduciary named in such notice.\n