2023 New York Laws › TAX - Tax › Article 27 - Corporate Tax Procedure and Administration › 1081 - Notice of Deficiency.

§  1081. Notice of deficiency.-- (a) General.-- If upon examination of
a taxpayer's return under article nine, nine-a, nine-b  or  nine-c,  the
tax commission determines that there is a deficiency of tax, it may mail
a  notice  of  deficiency to the taxpayer. If a taxpayer fails to file a
tax return required under article nine, nine-a, nine-b  or  nine-c,  the
tax  commission  is  authorized  to estimate the taxpayer's New York tax
liability 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 its last known address
in or out of this state. If the taxpayer has terminated its existence, a
notice of deficiency may be mailed to its 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
one thousand eighty-nine. If the notice of deficiency is addressed to  a
taxpayer  whose last known address is 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  one thousand 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 one thousand ninety.
(d) Exceptions for mathematical or clerical errors.--If a mathematical
or clerical error appears on a return (including an overstatement of the
amount  paid  as  estimated  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 one thousand eighty-seven (limiting credits or
refunds after petition to the division of tax appeals),  subsection  (b)
of  section  one  thousand  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)   Exception   where  change  in  federal  taxable  income  is  not
reported.--
(1) If the taxpayer fails to comply with subdivision three of  section
two  hundred  eleven  or  with  section  two hundred nineteen-bb or with
section two hundred nineteen-zz in not reporting a change or  correction
or  renegotiation, or computation or recomputation of tax, increasing or
decreasing its federal taxable income  or  federal  alternative  minimum
taxable  income  as  reported on its federal income tax return or in not
reporting a change or correction or  renegotiation,  or  computation  or
recomputation  of tax, which is treated in the same manner as if it were
a deficiency for federal income tax purposes or in not filing an amended
return, 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 increased or decreased federal taxable income

or federal alternative minimum taxable income 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  or  correction  or
renegotiation, or computation or recomputation of  tax,  or  an  amended
return,  where  such return was required by subdivision three of section
two hundred eleven or by section two hundred nineteen-bb or  by  section
two  hundred  nineteen-zz,  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 one thousand
eighty-seven (limiting credits or refunds  after  petition  to  the  tax
commission),  or  subsection  (b)  of  section  one thousand 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  the  taxpayer  has  terminated  its  existence,  a  notice of
additional tax due may be mailed to its 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) Two or more corporations.--In the case of a combined return  under
article  nine-a  or a consolidated return under article nine-b or nine-c
of two  or  more  corporations,  the  tax  commission  may  determine  a
deficiency of tax under article nine-a, nine-b or nine-c with respect to
the  entire  tax  due  upon  such  return  against any taxpayer included
therein. In the case of a taxpayer which might  have  been  included  in
such  a return under article nine-a, nine-b or nine-c when the tax under
such articles was originally reported, the tax commission may  determine
a  deficiency of tax under article nine-a, nine-b or nine-c against such
taxpayer and against any other taxpayers which might have been  included
in such a return.
(h)  Deficiency  defined.--For  purposes of this article, a deficiency
means the amount of the tax imposed by article nine, nine-a,  nine-b  or
nine-c,  less (i) the amount shown as the tax upon the taxpayer's return
(whether the return was made or the tax computed by it  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  article
nine-a,  nine-b  or nine-c and the tax shown on the return shall both be
determined without regard to any payment of estimated tax; and a  rebate
means  so  much  of  an  abatement,  credit,  refund  or other repayment
(whether or not erroneous) as was made on the ground  that  the  amounts
entering  into  the definition of a deficiency showed a balance in favor
of the taxpayer.
(i)  Exception  for  final  determination  of  refund  or  credit   of
retaliatory taxes.--
(1)  If  the taxpayer files the report required under paragraph (2) of
subdivision (e) of section  fifteen  hundred  fifteen  of  this  chapter
within  the  time  prescribed  by  such paragraph, in respect of a final
determination of a refund  or  credit  of  retaliatory  taxes  or  other

charges,  the  amount  of  the refund or credit of such taxes or charges
paid for which the taxpayer  has  been  allowed  a  credit  pursuant  to
subdivision (c) of section fifteen hundred eleven of this chapter and in
respect to which the taxpayer filed such report shall be deemed assessed
on  the  date  of filing such report. If payment of such amount does not
accompany the report, the tax commission shall issue a notice and demand
for the unpaid amount, together with any interest, additions to tax  and
penalties,   pursuant   to   subsection  (b)  of  section  one  thousand
ninety-two.
(2) If the taxpayer fails to file the report required under  paragraph
(2)  of  subdivision  (e)  of  section  fifteen  hundred fifteen of this
chapter within the time prescribed by such paragraph, in  respect  of  a
final  determination of a refund or credit of retaliatory taxes or other
charges, the amount of the refund or credit of  such  taxes  or  charges
paid  for  which  the  taxpayer  has  been  allowed a credit pursuant to
subdivision (c) of section fifteen hundred eleven of this chapter and in
respect to which the taxpayer was required to file such report shall  be
deemed  assessed  on  the  last  date  prescribed for the filing of such
report. The tax commission shall issue  a  notice  and  demand  for  the
unpaid  amount,  together  with  any  interest,  additions  to  tax  and
penalties,  pursuant  to  subsection  (b)  of   section   one   thousand
ninety-two.
(3)  The  assessments  provided  for in paragraphs (1) and (2) of this
subsection  or  collection  thereof  shall  not  be  prohibited  by  the
provisions of subsection (c).