Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group members Chris Doyle, Peter Calleri, and Zoe Peppas. The weekly reports are intended to go out every Tuesday after the New York State Division of Tax Appeals (DTA) publishes new ALJ Determinations and Tribunal Decisions. In addition to the weekly reports, TiNY may provide analysis of and commentary on other developments in the world of New York tax law.

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TiNY Report for June 1, 2023
NY state flag and the word TAXES made out of money

I expressed a lack of sympathy for the plight of the petitioners involved in the cases I summarized last week. As I started reading through this week’s DTA production, my thinking was much more “on brand.” I am, after all, on “Team Taxpayer,” and I tend to revert to that norm absent some really annoying taxpayer antics. Anyway, I was easing back into my pro-taxpayer comfort zone when I read the last determination summarized below, and BAM!, I was blown right back into wondering just what-the-heck some Petitioners are thinking. And, not for the first time, I wondered whether the $500 frivolous pleading penalty is really a big enough deterrent.


Matter of Lee, May 18, 2023, Div’s Rep. Eric Gee, Esq.; Pet’s Rep. Isaac Sternheim, CPA; Articles 28 and 29. Did Petitioner file her BCMS request before the 90 day deadline expired? Our survey says … nope.

The Division issued two Notices of Estimated Determination to Petitioner on January 30, 2020. The Notices asserted liability for sales taxes on the basis that Petitioner was a responsible officer of BLKSQ LLC. On May 4, 2020, the Division issued two more Notices of Determination to Petitioner asserting that she was liable as a responsible officer of Baba W14 Corp. On May 22, 2020, Petitioner hit the trifecta by having the Division issue to her a Notice of Estimated Determination asserting she was a responsible officer of Mr Wooh LLC. On September 10, 2020, Petitioner filed a Conciliation Conference (“BCMS”) Request challenging all of the Notices. The Notices were sent to the address in New Jersey listed on Petitioner’s 2018 income tax return filed on April 15, 2019.

The BCMS Requests were dismissed because they were filed after the 90-day deadline. The ALJ granted summary judgement to the Division on timeliness grounds and the Tribunal affirmed the ALJ’s determination. Like the ALJ, the Tribunal found that the Division had proven all of the Notices had been mailed to Petitioner’s last known address more than 90 days before she filed her BCMS Request. Petitioner made an effort to get the substantive issue before the Tribunal, submitting a statement that her ex-boyfriend stole her identity so she was not a responsible officer of the underlying business. And she alleged that her boyfriend intercepted her mail so she did not receive the notices. But even with a sympathetic story, you know how these timies go: Summary determination in favor of the Division. We see situations like this too often: Somebody outside of actual management ends up with joint and several liability for a business’ sales taxes because they signed something seemingly innocuous, or agreed to be a silent partner, or for some other reason was held to be a responsible officer. It may be the law, but that doesn’t make it right. *


Matter of Nasca, ALJ Law, May 18, 2023; Div’s Reps. Linda Farrington, Esq. and Stefan Armstrong, Esq.; Pet’s Rep. pro se; Article 22. I don’t know if Petitioner’s husband is the same “Dean Nasca” who frequently represents taxpayers before the DTA, but how many of them can there be? Petitioners claimed a $10,000 New York subtraction modification for a 529 college savings plan contribution in 2015. The short of it is this: Judge Law sustained the Division’s denial of the modification because the modification is allowed only for contributions to educational accounts owned by the taxpayer, and the name on the account to which the $10,000 was contributed was Petitioners’ son, and not either of Petitioners. The longer of it is that the Division allowed the modification in 2013 under the exact same factual circumstances. And, after the years at issue Petitioners amended the account documents to confirm that Petitioners, and not their son, owned the account. Judge Law found that the Education Law definition of “account owner” (i.e. the person who opened the account) controlled, and since the son was listed as the owner, Petitioners had not satisfied their burden of proving entitlement to the modification. I wonder about this, because the Judge mentions the son was, at all relevant times, a minor, and it is not clear to me that a minor can open an account or enter into a tuition savings agreement. But maybe Petitioners will ask the Tribunal to consider that issue.

Matter of Bey, ALJ Gardiner, May 18, 2023; Div’s Rep. Amanda Alteri, Esq.; Pet’s Rep. pro se; Article 22. Petitioner’s Forms W-2 showed wages in both years at issue. And for both years Petitioner filed tax returns (to which the Forms W-2 were attached) showing $0 in income and requesting refunds of, presumably, all of the New York income tax withheld by his employer. The Division issued “account adjustment notices” (the “Notices”) treating his wages as income, and absorbing a portion of his withheld taxes to pay the New York tax on those wages. Petitioner filed a Conciliation Conference request and, when the Conferee sustained the Notices, Petitioner filed a petition for an ALJ Hearing. The petition alleged that Petitioner owed no tax, and asserted an additional refund claim for $6,110,000 (!) under Article 26 of the Tax Law. For those readers who aren’t up on chapter-and-verse, Article 26 is the Estate Tax. 

The Division’s Answer denied the Notices were incorrect and requested that the frivolous pleading penalty be imposed. Eventually, the Division moved for summary determination. According to Judge Gardiner, Petitioner’s response to the motion included his arguments “that he is entitled to attorney’s fees, damages, pre-judgment and post-judgment interest and monetary relief over $100,000.00, but not to exceed $6,110,000, that relates to a real property interest.”    

The Judge determined that: (1) Petitioner failed to provide any evidence that the Notices were incorrect, and (2) the DTA didn’t have jurisdiction to adjudicate any Article 26 issues since there was no notice relating to Article 26 issues in the record. And the Judge found that imposition of the frivolous petition penalty was appropriate since Petitioner argued that his wages were not income, and that is one of the examples of a frivolous argument included in the DTA’s regulations.  

ALJ Order

Matter of Valezquez, ALJ Behuniak, May 18, 2023; Div’s Rep. Laura Krzeminski, Esq.; Pet’s rep. Ariele Doolittle, Esq.; Articles 28 and 29. This is one of ours, so I’ll refrain from editorializing, sarcasm, etc.

The Division issued a Notice to Petitioner dated October 15, 2019. The Notice asserted Petitioner was a responsible officer of Hariwo Corp., and the Notice was sent by the Division to Petitioner at “Commodity Cir Ste. 4.” Petitioner had previously filed with the Division “tax preparer enrollment forms” showing her home address at Flowers Field Lane, and a mailing address at Commodity Cir Ste. 4. After the Notice matured to a debt due to the passage of time, the Division issued a Tax Warrant to Petitioner dated November 4, 2020. The Tax Warrant was for the same liabilities reflected on the October 15, 2019, Notice, but was sent to Flowers Field Lane. Petitioner challenged the Tax Warrant and the underlying Notice by requesting a Conciliation Conference on December 12, 2020. BCMS dismissed the request on timeliness grounds because the request was filed after the 90-day deadline for challenging the October 15, 2019, Notice had elapsed. 

Petitioner filed a timely petition challenging the BCMS Order. In response, the DTA issued a Notice of Intent to Dismiss (“NOID”) on the grounds that the Conciliation Conference request was too late. 

Judge Behuniak noted that the burden of proving proper mailing of notices is on the Division, and that the proof required includes, among other elements, that a notice was mailed to the taxpayer’s “last known address.” The Judge found that, for sales taxes, proper mailing “requires issuance of a notice of determination under article 28 to the ‘person for whom it is intended in a postpaid envelope addressed to such person at the address given in the last return filed by him pursuant to the provisions of [article 28] or in any application made by him or, if no return has been filed or application made, then to such address as may be obtainable’ (Tax Law § 1147 [a] [1]).” Noting that Petitioner denied receipt of the Notice, and the Division admitted it mailed the Notice to the Commodity Cir Ste. 4 address and the Tax Warrant and a pre-notice Statement of Proposed Audit Adjustment to the Flowers Field Lane address, the Judge found there was uncertainty as to whether the Division had mailed the Notice to Petitioner’s last known address. In light of this uncertainty, the Judge ordered the NOID rescinded and the Division to issue its Answer.

* Note to self:  Write a song called “Jilted Responsible Officer” that starts as follows:

(verse 1)

I fell for a guy who owned a bar

And two restaurants destined to fail.

The first time he kissed me he stole my heart;

And later, my name and mail.


This jilted responsible officer

Was promised love and security,

But instead got this tax liability

As a departing gift from my lover.

Feel free to send your ideas for verses 2-4 to me at  If it becomes a hit, you’ll get a free lifetime subscription to TiNY.

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