TAX COURT OF NEW JERSEY

TAX COURT MANAGEMENT OFFICE P.O. Box 972

 (609) 815-2922 TRENTON, NJ 08625-0972 

 

njcourts.gov – select Courts/Tax Court

Corrected Opinion Notice

 Date: October 2, 2018 

Richard Leavy, Esq. 

Sidley Austin LLP

787 7th Avenue

New York, NY 10019

Isabella Pitt, Esq.

Office of the Attorney General

25 Market St

Trenton, NJ 08625

From: Shannon Tremel 

Re: Merrill Lynch Credit Corp v Dir. Division of Taxation 

Docket number: 004230-2017 

The attached corrected opinion replaces the version released on October 2, 

2018 The Opinion has been corrected as noted below:

1. Attorney for Defendant is amended to Isabella R. Pitt, Esq. 

2. Page 6-Conclusion of Law- Sentence reads “Second, the Director alleges...” Opinion 

is corrected to amend sentence to read as “Second, the tax payer alleges...” 

 
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NOT FOR PUBLICATION WITHOUT APPROVAL OF 

THE TAX COURT COMMITTEE ON OPINIONS 

Corrected October 2, 2018-Pg. 1 Attorney changed from Porrino to Pitt; 

Pg. 6 line 136 updated from Director to taxpayer 

______________________________ 

 : 

MERRILL LYNCH CREDIT : TAX COURT OF NEW JERSEY 

CORPORATION, : DOCKET NO: 004230-2017 

 : 

 Plaintiff, : 

 : 

vs. : 

 : 

DIRECTOR, DIVISION OF : 

TAXATION, STATE OF NEW JERSEY,: 

: 

 Defendant. : 

______________________________: 

 Decided: September 28, 2018 

Richard A. Leavy for Plaintiff (Sidley Austin LLP, 

attorneys). 

Isabella R. Pitt, Esq. for Defendant (Gurbir S. 

Grewal, Attorney General of New Jersey, attorney). 

CIMINO, J.T.C. 

I. INTRODUCTION 

Plaintiff taxpayer, Merrill Lynch Credit Corporation, filed 

a complaint with this court challenging a Notice of Assessment 

dated August 24, 2015 issued by the defendant, Director of Division 

of Taxation setting forth an assessment of $4,353,297.99 in taxes, 

penalties and interest for corporation business taxes for the years 

2007 through 2010. The taxpayer protested on February 2, 2016. 
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The Director now moves and the taxpayer cross-moves for summary 

judgment. 

The Director asserts that the protest was untimely as it was 

not filed within ninety days. N.J.S.A. 54:49-18. If the Director 

is successful, the matter is dismissed and the assessment will 

stand. 

The taxpayer asserts that the notice was defective and 

improperly served, thus rendering the notice ineffective. If the 

taxpayer is successful, taxpayer will not have any liability for 

the tax assessed. The statute of limitations for the assessment 

ran shortly after the notice sent by the Director. 

This matter comes before this court on cross-motions for 

summary judgment. Our Supreme Court has indicated that summary 

judgment provides a prompt, business-like and appropriate method 

of disposing of litigation in which material facts are not in 

dispute. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 

530 (1995). While not definitive, cross motions for summary 

judgment may represent to the court the ripeness of the matter for 

adjudication. Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 

399 N.J. Super. 158, 177 (App. Div. 2008). 

This matter is ripe for summary judgment. For the reasons 

set forth at greater length below, this Court rejects the arguments 

of taxpayer and grants summary judgment in the Director’s favor. 
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II. STATEMENT OF FACTS 

On July 1, 2011, Merrill Lynch Credit Corporation merged into 

Bank of America, N.A. As a result of the merger, the taxpayer 

filed a short year tax return for the period of January 1, 2011 

through July 1, 2011. The return was filed on May 9, 2012, almost 

a year after the merger. The return was filed in the name of 

Merrill Lynch Credit Corporation with an address of 150 N. College 

Street, 17th Floor, Charlotte, NC 28255. 

The Director conducted an audit for the years 2007 through 

2010.1 While the audit was ongoing, there was a consent fixing a 

period of limitations upon which an assessment of taxes could be 

made for the years 2007 through 2009. The advantage of the 

taxpayer signing this consent is to prevent the Director from 

issuing an arbitrary assessment in which an estimated amount of 

tax as determined by the Director would be due and owing 

immediately. See Jeffrey A. Friedman and Michael L. Colavito, 

Jr., Waive or Walk: Considerations for Extending the Statute of 

Limitations, St. Tax Notes, Nov. 1, 2010, at 349, 352. The consent 

was signed on April 13, 2015, by Lynn Chietz, as a corporate 

officer of and under the corporate name of Merrill Lynch Credit 

Corporation. Moreover, the consent signed by Ms. Chietz indicated 

that the taxpayer was Merrill Lynch Credit Corporation of 150 N. 

 

1 There was not any explanation as to what happened with the 2011 

short year return. 
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College Street, Charlotte, NC 28255. The consent period expired 

on August 31, 2015.2

On August 24, 2015, the Director issued a Notice of Assessment 

related to a final audit determination seeking $4,353,297.99 for 

the 2007 through 2010 tax years. The notice was sent certified 

mail to Merrill Lynch Credit Corporation at 150 N. College St., 

Fl. 17, Charlotte, NC 28202-2271.3 According to United States 

Postal Service records, on August 28, 2015 at 10:41 a.m., the 

notice was delivered to the taxpayer and the return receipt card 

signed. The taxpayer had outsourced the operation of its mailroom 

to an independent contractor. The routing form of the mailroom 

contractor indicates that the notice was processed on August 28, 

2015 at 1:04 p.m. and routed to 4909 Savarese Circle, Tampa, 

Florida, another business location of the taxpayer known as Bank 

of America Home Loans.4 The taxpayer has not indicated what it 

did with the notice after it was routed to Tampa. 

 

2 As to the 2010 tax year, the return was filed on October 10, 

2011. The four year period of limitations for assessment of 

additional taxes ran on October 10, 2015. See N.J.S.A. 54:49-

6(b). 

3 The actual Notice of Assessment contained in the envelope was 

addressed to Merrill Lynch Credit Corporation at 150 N. College 

St., 17th Fl., Charlotte, NC 28255. 

4 While the business of Merrill Lynch Credit Corporation was not 

explicitly stated, the tax returns indicate significant income and 

expenses dealing with Consumer Home Equity Fees, Res[sic] 1-4 

Family Fees, Sale of Forward Mortgages and Foreclosed Properties 

Expense. 
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Having not received a protest, an indication that an appeal 

was filed, nor payment of the tax within ninety days, the Director 

commenced collection activities by correspondence sent on December 

21, 2015 and December 30, 2015. See N.J.S.A. 54:49-18 (ninety 

days to protest); N.J.S.A. 54:51A-13, -14 (ninety days to appeal). 

On January 8, 2016, an email was sent from Claude Hunt, Bank of 

America Corporate Tax, 150 N. College St., 17th Floor, Charlotte, 

NC 28255, to the New Jersey Division of Taxation field auditor. 

At first, taxpayer challenged receipt of the Notice of Assessment 

and inquired as to whether it was sent via certified mail, similar 

to the notices sent by other states. This was followed by a formal 

letter on February 2, 2016, denominated as a protest. The protest 

was on stationary of the Bank of America Corporate Tax Department 

located at 150 N. College Street, 17th Floor, Charlotte, NC 28255. 

In the protest, taxpayer alleged that the notice was addressed to 

Merrill Lynch Credit Corporation, not Bank of America, so it was 

not in accordance with the requirements of N.J.S.A. 54:50-6(a). 

On December 22, 2016, the Director rejected the February 2nd

correspondence as an untimely protest since it was filed more than 

ninety days after the notice. A tax court action was thereafter 

commenced on March 21, 2017. 
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III. CONCLUSIONS OF LAW 

A. Introduction 

 The taxpayer raises broad due process challenges. The basic 

principles of due process guaranteed under both the United States 

Constitution and the State Constitution are notice and the 

opportunity to be heard. Schneider v. E. Orange, 196 N.J. Super. 

587, 595 (App. Div. 1984), aff’d o.b., 103 N.J. 115 (1986). 

Specifically, the taxpayer raises two challenges to the notice 

provided by the Director. First, the taxpayer alleges that the 

notice was addressed to the wrong entity and is therefore invalid. 

Second, the taxpayer alleges that the notice was sent to the wrong 

zip code. Each of these contentions will be addressed in turn. 

B. Addressed to the proper entity 

To ensure due process, the State Uniform Tax Procedure Law

provides that “[a]ny notice required to be given by the director 

. . . may be served personally or by mailing the same to the person 

for whom it is intended . . . .” N.J.S.A. 54:50-6(a). Merrill 

Lynch Credit Corporation merged into the Bank of America National 

Association on July 1, 2011. The taxpayer now alleges that the 

notice is defective in that it does not state Bank of America, but 

rather states Merrill Lynch Credit Corporation. 

There is not any dispute that agents of Bank of America 

accepted the notice sent by the Director by mail for Merrill Lynch 

Credit Corporation. Apparently realizing that Merrill Lynch 
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Credit Corporation was in the home loan business, the mailroom 

agent forwarded the notice to Bank of America Home Loans in Tampa. 

What happened from there has not been revealed by the taxpayer. 

Certainly, a Notice of Assessment, which, plainly on its face, 

claims over four million dollars as due and owing, should have 

attracted someone’s attention. The taxpayer had some three months 

(90 days to be exact) to route the notice to the proper personnel 

for action. The Director cannot be responsible for the taxpayer’s 

organization failing to take prompt action in the face of an 

assessment in excess of four million dollars. 

A Consent Fixing Period of Limitations signed on April 13, 

2015, set the period of limitations for August 31, 2015 for the 

2007 through 2009 tax years. The period of limitations for the 

2010 year was October 10, 2015. The notice was issued by the 

Director on August 24, 2015. The taxpayer here is not merely 

seeking the ability to challenge the assessment on the merits. 

The taxpayer argues that if the court were to find that the notice 

was defective and thus void, there would not be any timely 

assessment since the statute ran on August 31, 2015 and October 

10, 2015.5

What is telling, though, from the Consent executed by the 

taxpayer on April 13, 2015, is the taxpayer is listed twice as 

 

5 For reasons set forth below, the court does not have to reach 

this argument. 
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Merrill Lynch Credit Corporation and is signed by Lynn Chietz as 

an officer of Merrill Lynch Credit Corporation. This Consent was 

executed some four years after the merger, and four months prior 

to the notice. To now claim that the notice dated August 24, 2015, 

is not directed to the proper taxpayer is simply disingenuous. 

C. Sent to proper address 

 The State Uniform Tax Procedure Law provides that “[a]ny 

notice required to be given by the director . . . may be served 

personally or by mailing the same to the person for whom it is 

intended, addressed to such person at the address given in the 

last report filed by that person pursuant to the provisions of the 

State Tax Uniform Procedure Law, or of any other State tax law . 

. . . The mailing of such notice shall be presumptive evidence of 

the receipt of the same by the person to whom it was addressed.” 

N.J.S.A. 54:50-6(a). The plain purpose of this provision is to 

provide notice in accordance with due process of law. Schneider, 

196 N.J. Super. at 595 (due process requires notice and opportunity 

to be heard). However, the law balances the need for notice with 

the efficient administration of the tax laws. To foster this 

efficiency, the Legislature not only allowed a notice to be given 

by mail, but also the mailing of a notice sets up a presumption of 

delivery. This type of presumption is commonly known as the 

mailbox rule. See, e.g., Okosa v. Hall, 315 N.J. Super. 437, 440 

(App. Div. 1998)(describing mailbox rule); J & J Realty Co. v. 
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Township of Wayne, 22 N.J. Tax 157, 162 (Tax 2005)(application of 

mailbox rule). 

The taxpayer raises a myriad of issues regarding zip codes 

and business locations in an attempt to rebut the presumption.6 

If this was a case in which the notice was sent regular and 

certified mail, and the certified mail was returned as undelivered, 

the taxpayer’s legal arguments may be relevant to rebut the 

presumption depending on the factual circumstances. In such a 

case, the only evidence would be that the Director placed the 

notice in the mail. However, overcoming the presumption of 

delivery is irrelevant in this case since there is undisputed 

evidence of delivery to the taxpayer. The Director sent the notice 

by certified mail. The records of the United States Postal Service 

indicate that the notice was received and signed for on August 28, 

2018. Even if that was not enough to demonstrate delivery, the 

taxpayer’s records confirm receipt on the same date. 

“It is important, however, to recall that the system is but 

a means to an end, which end is the constitutional obligation that 

due and proper notice and the opportunity to be heard are actually 

 

6 The Taxpayer seems to make an issue of the notice being sent to 

zip code 28202-2271 versus 28255. Based upon the materials 

submitted, the zip code for 150 N. College Street is 28202. 

However, it also appears from the materials submitted that Bank of 

America has a “unique” zip code of 28255. In any event, this is 

not a material fact but a red herring since there is not any 

serious dispute that the notice was received.
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afforded to every person whose interest might be affected by a 

proposed action.” I.S. Smick Lumber v. Hubschmidt, 177 N.J. Super. 

131, 136 (Law Div. 1980), aff’d o.b., 182 N.J. Super. 306 (App. 

Div. 1982). However, to allege nonconformance with technical 

procedures when the taxpayer has been provided actual notice, “not 

only flies in the face of common sense, it is precisely the type 

of labyrinthine misconception which brings the legal system into 

disrepute among laymen.” Ibid. 

The presumption of delivery is a shield provided to the 

Director to preclude claims that a notice was not received.7 It 

shifts the burden to the taxpayer to prove non-delivery. It was 

not intended to be used as a sword by the taxpayer to nullify the 

undisputed delivery of a notice because the zip code was allegedly 

wrong. 

D. The taxpayer’s responsibility for its internal 

procedures. 

Taxpayer makes a point of noting that it has over 200,000 

employees with approximately 15,000 in the Charlotte area. 

Taxpayer implies that a different standard should apply because it 

is a large organization. The factual situation here is similar to 

that in Mancini v. EDS, 132 N.J. 330 (1993), in which the Supreme 

Court was evaluating excusable neglect for vacating a default 

 

7 As already noted, at first, taxpayer challenged receipt of the 

Notice of Assessment and inquired as to whether it was sent via 

certified mail. 
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judgment under R. 4:50-1. In rejecting the application to vacate 

default judgement, the Court observed that EDS: 

could reasonably have expected that 

policyholders would assert claims and that

some of the claims would be disputed. For 

some reason, EDS did not install a procedure 

for forwarding claims or notices served in its 

mail room. Nothing in the record excuses 

EDS’s misplacing of those claims and notices 

or its resulting failure to respond. 

[Id. at 335.] 

The Supreme Court then went on to note that “[i]n the case of 

organizations that ought to expect to be sued from time to time, 

the question in determining whether neglect is excusable is whether 

their procedure for responding, particularly the procedure for 

putting the case in the hands of counsel, could be expected to 

function within the time allowed.” Ibid. 

 While excusable neglect is not the standard here, it is a 

reasonable expectation that taxpayer could have expected important 

government notices to be delivered to its mailroom or Tampa 

location. It must be emphasized, though, that the reasonableness 

of a taxpayer’s procedures is not an issue to be considered. 

The taxpayer in setting up its operations made certain 

decisions, both fiscal and otherwise, as to what resources it would 

devote to properly processing governmental notices such as those 

sent by the Director. These resources include staffing and 

training of the mailroom and Tampa staff. The Director has no 
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control over the notice once it was delivered to taxpayer. The 

Director cannot direct taxpayer as to how resources are allocated 

for the identification and processing of governmental notices. 

The taxpayer is bound by the consequences of its business 

decisions. See General Trading Co. v. Dir., Div. of Tax’n, 83 

N.J. 122, 136 (1980). 

IV. CONCLUSION 

For the forgoing reasons, taxpayer’s motion for summary 

judgment is denied and the Director’s motion for summary judgment 

is granted.