§ 1081 — Notice of deficiency

§ 1081. Notice of deficiency.-- (a) General.-- If upon examination of\na taxpayer's return under article nine, nine-a, nine-b or nine-c, the\ntax commission determines that there is a deficiency of tax, it may mail\na notice of deficiency to the taxpayer. If a taxpayer fails to file a\ntax return required under article nine, nine-a, nine-b or nine-c, the\ntax commission is authorized to estimate the taxpayer's New York tax\nliability from any information in its possession, and to mail a notice\nof deficiency to the taxpayer. A notice of deficiency shall be mailed by\ncertified or registered mail to the taxpayer at its last known address\nin or out of this state. If the taxpayer has terminated its existence, a\nnotice of deficiency may be mailed to its last known address in or out\nof this state, unless the tax commission has received notice of the\nexistence of a fiduciary relationship with respect 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 tax commission a petition under section\none thousand eighty-nine. If the notice of deficiency is addressed to a\ntaxpayer whose last known address is outside of the United States, such\nperiod shall be one 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 thousand ninety-four, 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 tax commission, until the\ndecision of the tax commission has become final. For exception in the\ncase of judicial review of the decision of the tax commission, see\nsubsection (c) of section one thousand ninety.\n (d) Exceptions for mathematical or clerical errors.--If a mathematical\nor clerical error appears on a return (including an overstatement of the\namount paid as estimated tax), the commissioner shall notify the\ntaxpayer that an amount of tax in excess of that shown upon the return\nis due, and that such excess has been assessed. Such notice shall not be\nconsidered as a notice of deficiency for the purposes of this section,\nsubsection (f) of section one thousand eighty-seven (limiting credits or\nrefunds after petition to the division of tax appeals), subsection (b)\nof section one thousand eighty-nine (authorizing the filing of a\npetition with the division of tax appeals based on a notice of\ndeficiency), or article forty of this chapter, nor shall such assessment\nor collection be prohibited by the provisions of subsection (c).\n (e) Exception where change in federal taxable income is not\nreported.--\n (1) If the taxpayer fails to comply with subdivision three of section\ntwo hundred eleven or with section two hundred nineteen-bb or with\nsection two hundred nineteen-zz in not reporting a change or correction\nor renegotiation, or computation or recomputation of tax, increasing or\ndecreasing its federal taxable income or federal alternative minimum\ntaxable income as reported on its federal income tax return or in not\nreporting a change or correction or renegotiation, or computation or\nrecomputation of tax, which is treated in the same manner as if it were\na deficiency for federal income tax purposes or in not filing an amended\nreturn, instead of the mode and time of assessment provided for in\nsubsection (b) of this section, the tax commission may assess a\ndeficiency based upon such increased or decreased federal taxable income\nor federal alternative minimum 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 subdivision three of section\ntwo hundred eleven or by section two hundred nineteen-bb or by section\ntwo hundred nineteen-zz, is filed accompanied by a statement showing\nwherein such federal determination and such notice of additional tax due\nare erroneous.\n (2) Such notice shall not be considered as a notice of deficiency for\nthe purposes of this section, subsection (f) of section one thousand\neighty-seven (limiting credits or refunds after petition to the tax\ncommission), or subsection (b) of section one thousand eighty-nine\n(authorizing the filing of a petition with the tax commission based on a\nnotice of deficiency), nor shall such assessment or the collection\nthereof be prohibited by the provisions of subsection (c).\n (3) 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\nthis state, unless the tax commission 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 tax\ncommission.\n (g) Two or more corporations.--In the case of a combined return under\narticle nine-a or a consolidated return under article nine-b or nine-c\nof two or more corporations, the tax commission may determine a\ndeficiency of tax under article nine-a, nine-b or nine-c with respect to\nthe entire tax due upon such return against any taxpayer included\ntherein. In the case of a taxpayer which might have been included in\nsuch a return under article nine-a, nine-b or nine-c when the tax under\nsuch articles was originally reported, the tax commission may determine\na deficiency of tax under article nine-a, nine-b or nine-c against such\ntaxpayer and against any other taxpayers which might have been included\nin such a return.\n (h) Deficiency defined.--For purposes of this article, a deficiency\nmeans the amount of the tax imposed by article nine, nine-a, nine-b or\nnine-c, less (i) the amount shown as the tax upon the taxpayer's return\n(whether the return was made or the tax computed by it or by the tax\ncommission), and less (ii) the amounts previously assessed (or collected\nwithout assessment) as a deficiency and plus (iii) the amount of any\nrebates. For the purpose of this definition, the tax imposed by article\nnine-a, nine-b or nine-c and the tax shown on the return shall both be\ndetermined without regard to any payment of estimated tax; and a rebate\nmeans 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 (i) Exception for final determination of refund or credit of\nretaliatory taxes.--\n (1) If the taxpayer files the report required under paragraph (2) of\nsubdivision (e) of section fifteen hundred fifteen of this chapter\nwithin the time prescribed by such paragraph, in respect of a final\ndetermination of a refund or credit of retaliatory taxes or other\ncharges, the amount of the refund or credit of such taxes or charges\npaid for which the taxpayer has been allowed a credit pursuant to\nsubdivision (c) of section fifteen hundred eleven of this chapter and in\nrespect to which the taxpayer filed such report shall be deemed assessed\non the date of filing such report. If payment of such amount does not\naccompany the report, the tax commission shall issue a notice and demand\nfor the unpaid amount, together with any interest, additions to tax and\npenalties, pursuant to subsection (b) of section one thousand\nninety-two.\n (2) If the taxpayer fails to file the report required under paragraph\n(2) of subdivision (e) of section fifteen hundred fifteen of this\nchapter within the time prescribed by such paragraph, in respect of a\nfinal determination of a refund or credit of retaliatory taxes or other\ncharges, the amount of the refund or credit of such taxes or charges\npaid for which the taxpayer has been allowed a credit pursuant to\nsubdivision (c) of section fifteen hundred eleven of this chapter and in\nrespect to which the taxpayer was required to file such report shall be\ndeemed assessed on the last date prescribed for the filing of such\nreport. The tax commission shall issue a notice and demand for the\nunpaid amount, together with any interest, additions to tax and\npenalties, pursuant to subsection (b) of section one thousand\nninety-two.\n (3) The assessments provided for in paragraphs (1) and (2) of this\nsubsection or collection thereof shall not be prohibited by the\nprovisions of subsection (c).\n