2023 New York Laws › TAX - Tax › Article 22 - Personal Income Tax › Part 6 - Procedure and Administration › 681 - Notice of Deficiency.

§  681.  Notice of deficiency.--(a) General.--If upon examination of a
taxpayer's return under this article the tax commission determines  that
there  is a deficiency of income tax, it may mail a notice of deficiency
to the taxpayer. If a taxpayer  fails  to  file  an  income  tax  return
required  under  this  article,  the  tax  commission  is  authorized to
estimate the taxpayer's New York taxable income and  tax  thereon,  from
any information in its possession, and to mail a notice of deficiency to
the  taxpayer.  A  notice  of deficiency shall be mailed by certified or
registered mail to the taxpayer at his last known address in or  out  of
this  state.  If a husband and wife are jointly liable for tax, a notice
of deficiency may be a single joint  notice,  except  that  if  the  tax
commission  has  been notified by either spouse that separate residences
have been established, then, in lieu  of  the  single  joint  notice,  a
duplicate original of the joint notice shall be mailed to each spouse at
his  or  her last known address in or out of this state. If the taxpayer
is deceased or under a legal disability, a notice of deficiency  may  be
mailed to his last known address in or out of this state, unless the tax
commission   has  received  notice  of  the  existence  of  a  fiduciary
relationship with respect to the taxpayer.
(b) Notice of deficiency as assessment.--After ninety  days  from  the
mailing of a notice of deficiency, such notice shall be an assessment of
the  amount of tax specified in such notice, together with the interest,
additions to tax and penalties stated in such notice,  except  only  for
any  such  tax or other amounts as to which the taxpayer has within such
ninety day period filed with the tax commission a petition under section
six hundred eighty-nine. If the notice of deficiency is addressed  to  a
person  outside  of  the United States, such period shall be one hundred
fifty days instead of ninety days.
(c)  Restrictions  on  assessment  and  levy.--No  assessment   of   a
deficiency  in tax and no levy or proceeding in court for its collection
shall be made, begun or prosecuted,  except  as  otherwise  provided  in
section  six  hundred ninety-four, until a notice of deficiency has been
mailed to the taxpayer, nor until the expiration of the time for  filing
a  petition  contesting  such notice, nor, if a petition with respect to
the taxable year has been filed  with  the  tax  commission,  until  the
decision  of  the  tax commission has become final. For exception in the
case of judicial review of the  decision  of  the  tax  commission,  see
subsection (c) of section six hundred ninety.
(d) Exceptions for mathematical or clerical errors.--If a mathematical
or clerical error appears on a return (including an overstatement of the
credit  for  income tax withheld at the source, or of the amount paid as
estimated income tax), the commissioner shall notify the  taxpayer  that
an  amount  of  tax  in excess of that shown upon the return is due, and
that such excess has been assessed. Such notice shall not be  considered
as  a  notice of deficiency for the purposes of this section, subsection
(f) of section six hundred eighty-seven  (limiting  credits  or  refunds
after  petition  to  the  division  of  tax  appeals), subsection (b) of
section six hundred eighty-nine (authorizing the filing  of  a  petition
with  the  division  of tax appeals based on a notice of deficiency), or
article forty of this chapter, nor shall such assessment  or  collection
be prohibited by the provisions of subsection (c).
(e) Exceptions where federal changes, corrections or disallowances are
not reported.---
(1)  If  the  taxpayer  or  employer  fails to comply with section six
hundred fifty-nine, instead of the mode and time of assessment  provided
for  in  subsection (b) of this section, the tax commission may assess a
deficiency based upon such federal change, correction or disallowance by
mailing to the taxpayer a notice of additional tax  due  specifying  the

amount  of  the  deficiency,  and  such  deficiency,  together  with the
interest, additions to tax and penalties stated in such notice, shall be
deemed assessed on the date such notice is mailed unless  within  thirty
days  after  the  mailing of such notice a report of the federal change,
correction or disallowance or an amended return, where such  return  was
required  by  section  six hundred fifty-nine, is filed accompanied by a
statement showing wherein such federal determination and such notice  of
additional tax due are erroneous.
(2)  Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subsection  (f)  of  section  six  hundred
eighty-seven  (limiting  credits  or  refunds  after petition to the tax
commission), or  subsection  (b)  of  section  six  hundred  eighty-nine
(authorizing the filing of a petition with the tax commission based on a
notice  of  deficiency),  nor  shall  such  assessment or the collection
thereof be prohibited by the provisions of subsection (c).
(3) If a husband and wife are jointly liable  for  tax,  a  notice  of
additional  tax due may be a single joint notice, except that if the tax
commission has been notified by either spouse that  separate  residences
have  been  established,  then, in lieu of the joint notice, a duplicate
original of the joint notice shall be mailed to each spouse  at  his  or
her  last  known  address  in  or  out of this state. If the taxpayer is
deceased or under a legal disability, a notice of additional tax due may
be mailed to his last known address in or out of this state, unless  the
tax  commission  has  received  notice  of  the existence of a fiduciary
relationship with respect to the taxpayer.
(f) Waiver of restrictions.--The taxpayer shall at any  time  (whether
or  not  a notice of deficiency has been issued) have the right to waive
the restrictions on assessment and collection of the whole or  any  part
of  the  deficiency  by  a  signed  notice in writing filed with the tax
commission.
(g) Deficiency defined.--For purposes of this  article,  a  deficiency
means the amount of the tax imposed by this article, less (i) the amount
shown as the tax upon the taxpayer's return (whether the return was made
or  the tax computed by him or by the tax commission), and less (ii) the
amounts previously assessed  (or  collected  without  assessment)  as  a
deficiency  and plus (iii) the amount of any rebates. For the purpose of
this definition, the tax imposed by this article and the  tax  shown  on
the  return  shall  both  be  determined  without  regard to payments on
account of estimated tax or the credit for withholding tax; and a rebate
means so much  of  an  abatement,  credit,  refund  or  other  repayment
(whether  or not erroneous) made on the ground that the amounts entering
into the definition of a deficiency showed a balance  in  favor  of  the
taxpayer.