NY Bar Association Issues Report on Proposed Changes to Tax Appeals Process

The New York State Bar Association Tax Section has made their feelings known about proposed legislation that could have a negative impact on the tax appeals process in New York, in a report principally authored by Paul R. Comeau, my partner at Hodgson Russ.

One interesting aspect of the governor’s recent budget bill is the proposal to create a new division of central administrative hearings and give the division head the power to consolidate or abolish hearing functions within the Department of Taxation's tax appeals division. In other words, they’re trying to merge administrative bodies. You can read more about it an article we recently wrote here.

Here’s what’s being proposed: New York State wants to create a new division of central administrative hearings. The justification, apparently, is to be part of the national movement to consolidate state agency hearing processes, along with about half the other states in America.

But the Bar Association recently put out a report that recommends this proposal not be adopted. The gist of the report is that the tax appeals function in New York, which was put in place 30 years ago, works really well, and has served as a model for other states. Hearings are conducted before qualified, knowledgeable administrative law judges, with appeals available to a dedicated three-member tax tribunal. And the tax expertise of the Division’s judges and Tribunal members is a critical part of its success. So the report recommends that the bill exclude the tax appeals division's administrative hearing functions, saying tax issues are complex and technical and should be adjudicated by the division's expert administrative law judges and tax tribunal members, not generalists.

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