Section 129 - Notice of deficiency(a) General.-If upon examination of a taxpayer's return under this title the director of finance determines that there is a deficiency of income tax, he may mail a notice of deficiency to the taxpayer. If a taxpayer fails to file a return required under this title, the director of finance is authorized to estimate the taxpayer's city unincorporated business taxable income and tax thereon, from any information in his 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 the city. 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 the city, unless the director of finance 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 director of finance a petition under section one hundred thirty-seven. 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 one hundred forty-two, 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 director of finance, until the decision of the director of finance has become final. For exception in the case of judicial review of the decision of the director of finance, see subdivision (c) of section one hundred thirty-eight.(d) Exceptions for mathematical errors.-If a mathematical error appears on a return (including an overstatement of the amount paid as estimated income tax), the director of finance 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, subdivision (f) of section one hundred thirty-five (limiting credits or refunds after petition to the director of finance), or subdivision (b) of section one hundred thirty-seven (authorizing the filing of a petition with the director of finance based on a notice of deficiency) nor shall such assessment or collection be prohibited by the provisions of subdivision (c).
(e) Exception where change in federal taxable income is not reported.-(1)If the taxpayer fails to comply with section one hundred twenty-seven in not reporting a change or correction increasing or decreasing his federal taxable income as reported on his federal income tax return or in not reporting a change or correction 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 or in not reporting the execution of a notice of waiver described in such section, instead of the mode and time of assessment provided for in subdivision (b) of this section, the commissioner of finance may assess a deficiency based upon such changed or corrected federal 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 an amended return, where such return was required by section one hundred twenty-seven, 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, subdivision (f) of section one hundred thirty-five (limiting credits or refunds after petition to the director of finance), or subdivision (b) of section one hundred thirty-seven (authorizing the filing of a petition with the director of finance based on a notice of deficiency), nor shall such assessment or the collection thereof be prohibited by the provisions of subdivision (c).(3) 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 the city, unless the director of finance 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 director of finance.(g) Deficiency defined.- For purposes of this title, a deficiency means the amount of the tax imposed by this title, 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 director of finance), 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 title and the tax shown on the return shall both be determined without regard to payments on account of estimated 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.(h) Exception where change or correction of sales and compensating use tax liability is not reported.-(1)If a taxpayer fails to comply with section one hundred twenty-seven-A in not reporting a change or correction of his sales and compensating use tax liability or in not filing a copy of an amended return or report relating to his sales and compensating use tax liability, instead of the mode and time of assessment provided for in subdivision (b) of this section, the commissioner of finance may assess a deficiency based upon such changed or corrected sales and compensating use tax liability, as same relates to credits claimed under section one hundred one, 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 state change or correction or a copy of an amended return or report, where such copy was required by section one hundred twenty-seven-A, is filed accompanied by a statement showing wherein such state 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, subdivision (f) of section one hundred thirty-five (limiting credits or refunds after petition to the commissioner of finance), or subdivision (b) of section one hundred thirty-seven (authorizing the filing of a petition with the commissioner of finance based on a notice of deficiency), nor shall such assessment or the collection thereof be prohibited by the provisions of subdivision (c) of this section.(3) 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 the city, and such notice shall be sufficient for purposes of this title. If the commissioner of finance has received notice that a person is acting for the taxpayer in a fiduciary capacity, a copy of such notice shall also be mailed to the fiduciary named in such notice.N.Y. General City Model Law § 129