2023 New York Laws › TAX - Tax › Article 26 - Estate Tax › Part 4 - Procedure and Administration › 998 - Petition to the Surrogate's Court and Appeal.

§  998.  Petition  to the surrogate's court and appeal. (a) General. A
taxpayer shall have the right to protest a notice  of  deficiency  or  a
notice  of disallowance of a claim for refund issued by the commissioner
of taxation and finance with  respect  to  tax  under  this  article  as
provided  in  this  section.  A proceeding under this section shall be a
special proceeding under article four of  the  civil  practice  law  and
rules and shall be commenced by filing a notice of petition and verified
petition  with  the  surrogate's  court  and  service  of such notice of
petition and verified petition  on  the  commissioner  of  taxation  and
finance  or  the  commissioner's  attorney.  In  any  county  which  has
designated a transfer and estate clerk of the court, the filing  of  the
notice  of  petition  and  verified  petition with the surrogate's court
shall be effected  by  filing  such  notice  of  petition  and  verified
petition  with  such  clerk.  The  notice of petition, together with the
petition and any affidavits specified in the notice, shall be  so  filed
and  served  at  least  forty-five  days  before  the  time at which the
petition is noticed to be heard. An answer and supporting affidavits, if
any, shall be served at least  ten  days  before  such  time.  A  reply,
together  with  supporting  affidavits, if any, shall be served at least
five days  before  such  time.  No  petition  shall  be  denied  without
opportunity for a hearing of any issues of fact raised therein.
(b) Conciliation conferences. The provisions of subdivision three-a of
section  one  hundred  seventy  of  this  chapter regarding conciliation
conferences in the bureau of conciliation and mediation  services  shall
be  applicable with respect to a notice of deficiency or disallowance of
a refund of tax under this article provided, however, the references  to
"the  division  of tax appeals" shall be deemed to be references to "the
surrogate's court" for purposes  of  the  tax  under  this  article  and
references  to filing a petition shall be deemed to be references to the
commencement of a special proceeding under this section.
(c) Jurisdiction and venue. The  surrogate's  court  of  every  county
having  jurisdiction of the estate of a decedent under the provisions of
sections two hundred five and two hundred six of the  surrogate's  court
procedure act shall have jurisdiction of proceedings under this section.
Venue of such proceedings shall be as provided in such sections.
(d)  Petition  for  review of a deficiency. Within ninety days, or one
hundred fifty days if the notice is addressed to a person outside of the
United States, after the mailing of the notice of deficiency  of  estate
tax,  the  taxpayer  may  commence a special proceeding pursuant to this
section in the surrogate's court for  review  of  the  deficiency.  Such
petition  may  also assert a claim for refund of tax under this article,
subject to the limitations of subsection  (g)  of  section  six  hundred
eighty-seven  of  this  chapter,  as  made applicable to the tax imposed
under this article by section nine hundred ninety.
(e) Petition for  refund.  (1)  A  taxpayer  may  commence  a  special
proceeding with the surrogate's court under this section for the amounts
asserted in a claim for refund if--
(A)  the  taxpayer  has  filed  a  timely  claim  for  refund with the
commissioner of taxation and finance,
(B) the taxpayer has not previously  commenced  a  special  proceeding
under  subsection  (d)  regarding  the  tax imposed by this article with
respect to the death of the same decedent unless the petition under this
subsection relates to a separate claim for refund properly  filed  under
subsection  (f)  of section six hundred eighty-seven, as made applicable
to the tax imposed by this article by section nine hundred ninety, and
(C) either (i) six months have expired since the claim was  filed,  or
(ii)  the  commissioner  has  mailed  to  the taxpayer, by registered or

certified mail, a notice of disallowance of such claim in  whole  or  in
part.
(2)  No  special  proceeding under this subsection shall be filed more
than two years after the date of mailing of a  notice  of  disallowance,
unless  prior  to  the  expiration  of  such two year period it has been
extended by written agreement between the taxpayer and the  commissioner
of  taxation  and  finance.  If a taxpayer files a written waiver of the
requirement that such taxpayer be mailed a notice of  disallowance,  the
two  year  period prescribed by this paragraph for filing a petition for
refund shall begin on the date such waiver is filed.
(f) Assertion of deficiency after filing petition.
(1) Petition for review of  deficiency.  If  a  taxpayer  commences  a
special  proceeding  for  review  of  a deficiency, the commissioner may
assert and the surrogate's court shall have power to determine a greater
deficiency  than  asserted  in  the  notice  of   deficiency   and   the
commissioner  may  assert  and the surrogate's court shall have power to
determine any addition to tax or penalty.
(2)  Petition  for  refund.  If  the  taxpayer  commences  a   special
proceeding  for  refund, the commissioner may assert and the surrogate's
court may determine:
(A) a deficiency as to any amount of deficiency  asserted  within  the
period in which an assessment would be timely, or
(B)  deny  so  much  of  the  amount for which refund is sought in the
petition, as is offset by other issues pertaining to the taxpayer.
(3) Opportunity to respond. A taxpayer shall  be  given  a  reasonable
opportunity to respond to any matters asserted by the commissioner under
this subsection.
(4)  Restriction  on  further  notices  of deficiency. If the taxpayer
commences  a  special  proceeding  under  this  section,  no  notice  of
deficiency  of  estate  tax  may  thereafter  be  issued to the taxpayer
regarding the tax imposed by this article with respect to the  death  of
the  same  decedent, except in case of fraud or with respect to a change
or correction  required  to  be  reported  under  section  nine  hundred
seventy-nine.
(g)  Burden  of  proof. In any case before the surrogate's court under
this section, the burden of proof shall be upon the  petitioner,  except
for  the following issues, as to which the burden of proof shall be upon
the commissioner:
(1) whether the petitioner has been guilty of  fraud  with  intent  to
evade tax;
(2)  whether the petitioner is liable as the transferee of property of
a taxpayer, but not to show that the taxpayer was liable for the tax;
(3) whether the petitioner is liable for any increase in a  deficiency
where  such  increase is asserted initially after a notice of deficiency
was mailed and a special proceeding commenced under this section, unless
such increase in deficiency is the result  of  a  change  or  correction
required  to be reported under section nine hundred seventy-nine, and of
which change or correction the commissioner of taxation and finance  had
no  notice at the time the commissioner mailed the notice of deficiency;
and
(4) whether any person is liable for a penalty under subsection (k) or
(r) of  section  six  hundred  eighty-five  of  this  chapter,  as  made
applicable  to  the  tax imposed by this article by section nine hundred
ninety.
(h) Review under this section exclusive. The review of a deficiency or
denial of a refund provided by  this  section  shall  be  the  exclusive
remedy  available  for  the  judicial  review  of  the  liability of the
taxpayer for the taxes imposed by this article.
(i) Appeal; assessment pending appeal; appeal bond. (1)  The  taxpayer
or  the  commissioner  of  taxation and finance may appeal from a decree
entered in a special proceeding pursuant to this section as provided  in
section  two  thousand  seven  hundred  one  of  the  surrogate's  court
procedure act.
(2)  Irrespective of any restrictions on the assessment and collection
of deficiencies, the commissioner may assess a deficiency determined  by
the  surrogate's court after the expiration of the period during which a
notice of appeal may be filed, notwithstanding that a notice  of  appeal
has  been  filed by the taxpayer with respect to such deficiency, unless
the taxpayer, at or before the time his notice of appeal is  filed,  has
paid  the  deficiency, has deposited with the commissioner the amount of
the deficiency, or has filed with  the  commissioner  a  bond  or  other
security  acceptable  to  the commissioner (which may be a jeopardy bond
under subsection  (h)  of  section  six  hundred  ninety-four,  as  made
applicable  to  the  tax imposed by this article by section nine hundred
ninety) in the amount  of  the  portion  of  the  deficiency  (including
interest  and  other amounts) in respect of which the appeal is made and
all costs and charges which may  accrue  against  the  taxpayer  in  the
prosecution   of   the  proceeding,  including  costs  of  all  appeals,
conditioned upon the payment of the deficiency (including  interest  and
other amounts) as finally determined and such costs and charges. If as a
result  of a waiver of the restrictions on the assessment and collection
of a deficiency any part of the amount determined by the commissioner is
paid after the filing of the review bond or other security, such bond or
other security shall, at the request of the taxpayer, be proportionately
reduced.
(3) If the amount of a deficiency determined by  the  commissioner  is
disallowed  in  whole  or in part by the court, the amount so disallowed
shall be credited or refunded to the taxpayer, without the making  of  a
claim therefor, or, if payment has not been made, shall be abated.
(j)  Date  of  finality  of  decree. A decree of the surrogate's court
shall become final upon the expiration of the time for filing  a  notice
of appeal if no such notice is filed within such time, or if a notice of
appeal has been duly filed, upon expiration of the time for all judicial
review,  or  upon  the  entry  of  a  decree of the surrogate's court in
accordance with the mandate of the court on appeal.