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Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group. The weekly reports are intended to go out within 24 hours of the Division of Tax Appeals’ (DTA) publication of 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.  

TiNY Report for August 10, 2017 (covering cases issued by the Division of Tax Appeals the week of July 30)

By on

Two ALJ Determinations, but no Decisions or Orders this week.

Before going to the cases, your authors would like to offer some reminders on TiNY’s limitations.  If you scroll down to the bottom of our web page, you’d find (under our “Principal Address”) our “Blog Disclaimer” link.  Since some of you will never go to the bottom of our blog screen, we will, from time-to-time (usually during a slow news week), re-print the Disclaimer in a Report just so everyone understands what we are about and how TiNY Reports should be used.  Here you go:

Disclaimer

Taxes in New York (“TiNY”) is published and presented by Hodgson Russ LLP, which is a law firm. It is presented for general informational and entertainment purposes only and should not be construed as legal advice or legal opinion on any specific set of facts or circumstances. Although it should go without saying, we are compelled to tell you that your receipt of the TiNY Reports does not make us your lawyers. Hodgson Russ LLP will not establish an attorney/client relationship with you without first corresponding with you and sending you an engagement letter signed by one of our lawyers. If you have not received a signed engagement letter, you are not our client. Period.

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And now we return to our previously-scheduled Report.

Determinations

Matter of Urrego; Judge Law; Division’s Rep: Adam Roberts; Taxpayer’s Rep: Michael Buxbaum; Articles 28 & 29.  This is a timeliness case with a digital-era twist.  The Petition for the Notices at issue was filed on March 25, 2016.  The Division claimed the Notices had been issued to Petitioner electronically on May 1, 2014.  The Division moved for dismissal and/or summary determination on timeliness grounds.  The ALJ found that in the course of opening an on-line account with the Department, Petitioner had elected to receive Notices electronically.  According to affidavits submitted by the Division, when a taxpayer elects to receive electronic Notices, the notification process involves the Department posting the Notices to the taxpayer’s on-line account and simultaneously sending an email alert to the taxpayer stating that there are liabilities reflected in his on-line account that  (s)he needs to access and act upon.  The messages to Petitioner regarding the Notices were marked as “unread” by the recipient in the Department’s system.  In dismissing the case, the ALJ found that the Petitions were not filed timely.  In support of this finding, the ALJ noted that Tax Law § 35 permits the Department to use electronic means of communication to furnish documents in lieu of mailing them as long as it has received the authorization from the on-line account holder. The ALJ found that Petitioner was an on-line account holder, that he authorized the use of electronic means of communication, that the Notices at issue were posted to his on-line account and that alerts regarding the Notices were sent to the email address Petitioner provided at the time he opened his on-line account.  There isn’t a lot of guidance on the application of Tax Law § 35.  So the Judge was starting pretty much from scratch.  But I wonder whether posting a Notice on one’s on-line account and then sending an email alert stating the Notice may be accessed really constitutes the use of electronic means to “furnish” the Notices.  Said another way, I wonder if putting a Notice in a place and alerting the intended recipient that it is in such place and the recipient should go get it is the same as “furnishing”.  “Furnishing” seems to connote that the Notice be delivered and not simply made available for access.  Stay tuned.  This is the wave of the future, so we imagine we haven’t heard the last word on electronic furnishing of Notices.

Matter of Weiner; Judge Galliher; Division’s Rep: Nicholas Behuniak; Taxpayer’s Rep: Lawrence Price; Articles 28 & 29.  Judge Galliher found that the Division proved, through affidavits, its standard mailing practices and that they were followed with respect to the Notices at issue.  Accordingly, the Judge determined that the Notices were mailed to the Petitioner’s last known address on April 20, 2015.  The Judge granted summary judgement in favor of the Division since he determined further that the Conciliation Conference request challenging the Notices was filed more than a year after the 90-day deadline had lapsed.

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