§ 72. Notice of Deficiency. 1. General.--If upon examination of a
taxpayer's return, the director of finance 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, the director of finance is
authorized to estimate the taxpayer's city tax liability 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 its last known address in or out of
the city. If the taxpayer has terminated its existence, a notice of
deficiency may be mailed to its last known address in or out of the
city, and such notice shall be sufficient for purposes of this part. If
the director 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.

2. 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 eighty. 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.

3. 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
eighty-five, 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 three of section eighty-one.

4. Exceptions for mathematical errors.--If a mathematical error
appears on a return (including an overstatement of the amount paid as
estimated 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
six of section seventy-eight (limiting credits or refunds after petition
to the director of finance), or subdivision two of section eighty
(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 three of this section.

5. Exception where change in federal taxable income is not reported.--

(a) If the taxpayer fails to comply with part two or part three of
this title in not reporting a change or correction or renegotiation, or
computation or recomputation of tax, increasing or decreasing its
federal taxable income as reported on its federal income tax return or
in not reporting a change or correction or renegotiation, or computation
or a recomputaton 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 or in not reporting the execution of a notice of waiver
executed pursuant to subsection (d) of section six thousand two hundred
thirteen of the internal revenue code instead of the mode and time of
assessment provided for in subdivision two of this section, the
commissioner of finance may assess a deficiency based upon such
increased or decreased 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
renegotiation, or computation or recomputation of tax, or an amended
return, where such return was required by part two or part three, is
filed accompanied by a statement showing wherein such federal
determination and such notice of additional tax due are erroneous.

(b) Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subdivision six of section seventy-eight
(limiting credits or refunds after petition to the director of finance),
or subdivision two of section eighty (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 three of this section.

(c) 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
the city, and such notice shall be sufficient for purposes of this part.
If the director 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.

6. 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.

7. Two or more corporations.--In the case of a combined return under
part two or a consolidated return under part three of two or more
corporations, the director of finance may determine a deficiency of tax
under part two or part three 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 part two
or part three when the tax was originally reported, the director of
finance may determine a deficiency of tax under part two or part three
against such taxpayer and against any other taxpayers which might have
been included in such a return.

8. Deficiency defined.--For purposes of this part, a deficiency means
the amount of the tax imposed by the named parts, or any of them, less
(a) 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 director of
finance), and less (b) the amounts previously assessed (or collected
without assessment) as a deficiency and plus (c) the amount of any
rebates. For the purpose of this definition, the tax imposed by part two
or part three of this title 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.

9. Exception where change or correction of sales and compensating use
tax liability is not reported.

(a) If a taxpayer fails to comply with part two of this title in not
reporting a change or correction of its sales and compensating use tax
liability or in not filing a copy of an amended return or report
relating to its sales and compensating use tax liability, instead of the
mode and time of assessment provided for in subdivision two 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 part two of this title 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 part two, is filed accompanied by a statement showing
wherein such state determination and such notice of additional tax due
are erroneous.

(b) Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subdivision six of section seventy-eight
(limiting credits or refunds after petition to the commissioner of
finance), or subdivision two of section eighty (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 three of this section.

(c) If the taxpayer has terminated its existence, notice of additional
tax due may be mailed to its last known address in or out of the city,
and such notice shall be sufficient for purposes of this part. 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.