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SECTION 1081
Notice of deficiency
Tax (TAX) CHAPTER 60, ARTICLE 27
§ 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).