N.Y. Comp. Codes R. & Regs. tit. 20 § 535.5

Current through Register Vol. 46, No. 50, December 11, 2024

Section 535.5 - Review of assessment issued by the Division of Taxation

Tax Law, §§ 1138(a)(4), 1140

(a)General.

(1) Any tax assessed under a notice of determination described in section 535.2 or 535.4 of this Part may be protested by filing a petition for a hearing with the Division of Tax Appeals within 90 days of the date of the mailing of the assessment by the Division of Taxation. These tax assessments may also be protested by filing a request for a conciliation conference with the Bureau of Conciliation and Mediation Services of the Division of Taxation within 90 days of the date of the mailing of the assessment by the Division of Taxation. Timely filing of the request for a conciliation conference suspends the running of the 90-day time limitation for filing a petition for a hearing in the Division of Tax Appeals.

(2) Following is a brief description of the avenues available for the review of tax assessments issued by the Division of Taxation. For a detailed discussion of the tax assessment review process in the Division of Tax Appeals and the Bureau of Conciliation and Mediation Services see Parts 3000 and 4000 respectively of this Title.

(i) Bureau of Conciliation and Mediation Services.

(a) A conciliation conference is intended to provide taxpayers with a rapid, inexpensive and informal means for resolving the disputed tax assessment.

(b) A conciliation order issued by a conciliation conferee is generally binding on the Division of Taxation and the requester. However, a conciliation order will not be binding on the requester if such person files a petition for a hearing with the Division of Tax Appeals within 90 days after the conciliation order is issued.

(ii) Division of Tax Appeals. A hearing in the Division of Tax Appeals is held before an administrative law judge or, under certain circumstances, before a presiding officer in the Small Claims Unit.

(a) Small claims matter.

(1) If the petitioner so elects, and the amount in controversy meets the criteria set forth in section 3000.9(b) of this Title, the hearing may be held in the Small Claims Unit.

(2) Following a hearing in the Small Claims Unit the presiding officer will issue a determination. A final determination issued by the presiding officer is conclusive on all parties to the controversy and is not subject to review by any other unit of the Division of Tax Appeals or the Tax Appeals Tribunal.

(b) Administrative law judge determinations and review by the Tax Appeals Tribunal.

(1) A determination issued by an administrative law judge finally decides the matter in dispute unless the taxpayer or the Division of Taxation files an exception to this determination with the Tax Appeals Tribunal within 30 days after the giving of notice of such determination. If such an exception is filed, the Tribunal will issue a decision affirming, reversing or modifying the administrative law judge's determination or refer the matter back to the administrative law judge for further hearing.

(2) A decision of the Tax Appeals Tribunal that is not subject to any further review finally decides the matter in dispute unless the taxpayer initiates a proceeding under article 78 of the Civil Practice Law and Rules within four months after issuance of the Tribunal's decision and giving of notice to the parties.

(b)Exclusiveness of remedy.

An assessment may be challenged only by applying to the Division of Tax Appeals for a hearing or to the Bureau of Conciliation and Mediation Services for a conciliation conference as provided in subdivision (c) of sections 535.2 and 535.4 of this Part. The review of a decision of the Tax Appeals Tribunal referred to in subdivision (a) of this section is the exclusive remedy available for the judicial determination of a tax liability under article 28 of the Tax Law and local laws administered by the Department of Taxation and Finance pursuant to article 29 of the Tax Law.

(c)Deposit of amount due and filing of undertaking.

(1) A proceeding under article 78 of the Civil Practice Law and Rules may not be instituted unless:

(i) the amount of any tax sought to be reviewed, together with penalties and interest thereon, if any, is first deposited with the department;

(ii) an undertaking, issued by a surety company authorized to transact business in this State and approved by the Superintendent of Insurance of New York as to solvency and responsibility, is first filed with the department in such amount as a justice of the Supreme Court approves to the effect that if the proceeding be dismissed or the tax confirmed the petitioner will pay all costs and charges which may accrue in the prosecution of the proceeding; or in lieu of subparagraphs (i) and (ii) of this paragraph; and

(iii) at the option of the applicant for an article 78 proceeding, the undertaking filed with the department may be in a sum sufficient to cover the taxes and penalties and interest thereon stated in the notice of determination issued by the Division of Taxation plus the costs and charges which may accrue in the prosecution of the proceeding; in which event the applicant is not required to deposit such taxes, penalties and interest as a condition precedent to the application.

(2) If an applicant for an article 78 proceeding has previously filed a bond pursuant to subdivision (e) of section 535.3 of this Part to stay collection proceedings under a jeopardy assessment, or has previously paid to the Department of Taxation and Finance the taxes, penalties and interest assessed, such applicant need not deposit the taxes, penalties and interest assessed in order to commence an article 78 proceeding. Such an applicant must, however, file an undertaking to cover all costs and charges as described in subparagraph (ii) of paragraph (1) of this subdivision.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 535.5