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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 July 25, 2019 (covering cases issued July 18)

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There are three determinations and one order this week.  And guess what?  They are all timies – I’ve decided that I will also appropriate this word because it has a nice ring to it.  I’d also like to make a quick note of admiration for the thoughtful approach the ALJ’s applied to these cases.  It would be easy for the judges to just go through the motions on these mind-numbing timies.  But as you will see below, there is nothing superficial about the analyses applied. 

DETERMINATIONS 

Matter of Oberlander; Judge: Gardiner; Division’s Rep.: Charles Fishbaum; Petitioner’s Rep.: Leo Gabovich; Article 22.

The Division sent Petitioner a notice of deficiency dated February 20, 2018, to an address in Montauk.  It also sent one to his prior representative at a New York City address.  Thereafter, a notice and demand was issued to the same addresses on June 7, 2018.  Petitioner filed his Bureau of Conciliation and Mediation Services (“BCMS”) request on September 24, 2018.  BCMS then issued a conciliation order on October 19, 2018, dismissing the request as untimely, and Petitioner then filed a timely petition with the DTA.  

The Judge found that the Division sufficiently proved its standard mailing practices and that they were followed when it mailed the notice of deficiency to Petitioner’s prior representative and to Petitioner at his Montauk address.  The Petitioner argued that both addresses were incorrect because the prior representative listed a different address on another BCMS request and he had used an incorrect PO Box number on his last filed return.  The Judge found these arguments to be without merit as that other BCMS request resulted in a cancelled notice without a conciliation conference, and Petitioner’s return was filed the same day as that BCMS request – and it contained the prior representative’s New York City address.  Also, the Judge found that the Division could rely on the address that Petitioner included on his return as his last known address, regardless of Petitioner’s own mistake.  The Judge determined that the BCMS request was not timely as it was filed after the 90-day statutory limit, and the petition was denied and the conciliation order sustained.

Matter of Kulas; Judge: Connolly; Division’s Rep.: Christopher O’Brien; Petitioner’s Rep.: pro se; Article 22. 

Petitioner forgot to file her 2006 tax returns because she moved to the UK.  A notice of deficiency was mailed to her prior New York City address on March 3, 2014.  Petitioner filed a BCMS request on October 5, 2016, outside the 90-day statutory limit, and it had a UK postmark.  A conciliation order was then issued dismissing her request as untimely on October 28, 2016.  Petitioner filed her petition challenging the BCMS dismissal on January 26, 2017, again with a UK (and not a US) postmark.  It was received on February 6, 2017, and thus deemed filed that date, which was more than 90 days after the conciliation order had been issued.  

The Division filed a motion to dismiss and/or for summary determination, to which Petitioner didn’t respond. 

The Judge found that the Division failed to sufficiently prove the mailing of the conciliation order, so the petition was deemed timely. However, the Division did prove both its standard mailing practices, and that these practices were followed to mail the notice of deficiency to Petitioner’s last known address in New York City.  Since the BCMS request was filed after the 90-day statutory limit, the Division’s motion for summary determination was granted and the petition was denied. 

Matter of Fields; Judge: Friedman; Division’s Rep.: Charles Fishbaum; Petitioner’s Rep.: pro se; Article 22. 

Petitioner, by his CPA, filed his petition on July 23, 2018.  It was signed by his CPA, but there was no Power of Attorney attached.  The petition protested a notice of deficiency, which had been sent to the CPA on April 12, 2018.  The Division called the CPA and left voicemails, but he didn’t return their calls (I’m going to guess that he gets fired after this).

The Division then sent a letter to two additional addresses for Petitioner, which were identified on the notice of deficiency, seeking corrections to his petition, including the addition of a valid Power of Attorney, but both letters were returned to the DTA as undeliverable.   

The Judge dismissed the petition because it was not in proper form, as it was only signed by the CPA, without a Power of Attorney, and this error was not corrected within the 30 days allowed by the supervising ALJ. 

ORDER 

Matter of Alston; Judge: Russo; Division’s Rep.: Kathleen A. Korycinski; Petitioner’s Rep.: pro se; Article 22.

The Division sent Petitioner three notices of deficiency, each dated November 20, 2017.  Thereafter, the Division sent a notice of proposed driver license suspension referral (“60-day notice”) dated May 9, 2018, addressed to Petitioner at her Airmont, New York address, and it included a consolidated statement of tax liability.  The 60-day notice indicated that Petitioner had 60 days to respond or her license would be suspended.  Petitioner filed a petition on August 7, 2018, protesting the three notices of deficiency and the 60-day notice. 

The Judge found that the Division did not prove its standard mailing procedure for the mailing of the notices of deficiency.  The affidavits alleged that the Certified Mailing Record (“CMR”) provided proof that the standard procedure had been followed, but there were conflicting postmarks on the CMR.  Some of the pages had the postmark “GMF Albany NY 12212” while others had “Albany NY G.M.F.” and “Albany NY 12288.”  The Judge reasoned that these different postmarks could mean that the standard procedures of maintaining the CMR had not been followed.  Because the Division did not offer a valid explanation for the conflicting postmarks, the Judge found that there was a material issue of fact and denied the Division’s motion to dismiss and/or for summary determination with respect to the three notices. 

As for the 60-day notice, the Judge found that the Division failed to prove that the tax liabilities at issue were fixed and final.  Since the Division did not establish the proper mailing of the notices, it could not establish that Petitioner had exhausted her judicial or administrative remedies, so it could not establish that the liability was fixed and final.  Also, since there was insufficient proof that the notices were properly mailed, there was a question of fact as to the proper issuance of the 60-day notice. So the Judge denied the Division’s motion and allowed Petitioner to proceed with her case.

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