TiNY Report for May 15, 2020 (reporting on DTA cases issued May 7)

After going “oh-for-April,” the DTA seems to be easing back into the swing of things by posting three Decisions last week and then two ALJ Orders this week. And thank goodness. We have been busy on client matters, but those don’t really invite inventive prose. TiNY, on the other hand, lets us write creatively and be opinionated, and that is a welcome diversion.

One of this week’s DTA postings is a mundane timy. But when your last meal was more than a month ago, even a couple of stale crackers looks like a feast!

ALJ ORDERS

Matter of Cupo; Judge: Maloney; Division’s Rep.: Anita Luckina; Petitioner’s Rep.: William R. McMullan; Articles 28 and 29 (by Emma Savino)

The Division issued a Notice of Determination, dated February 6, 2014, and Notice of Estimated Determination, dated June 4, 2014, to Petitioner as a responsible person of two different companies. Petitioner filed his petition on October 16, 2019, claiming a refund of sales and use tax and attached both notices and a tax compliance levy. Supervising ALJ Friedman issued a Notice of Intent to Dismiss on November 25, 2019, because the petition appeared to be untimely.

The Division proved its standard mailing procedures, but not that they were followed with respect to either notice. The Judge found that, despite what Ms. Picard and Mr. Ramundo claimed in their affidavits, both CMRs were not properly completed because they did not contain legible USPS postmarks on each page. So the NOID was rescinded and the case allowed to proceed. The Judge did dismiss the petition with respect to the tax compliance levy since it is not a document that provides hearing rights to the DTA.

Matter of Lexington Insurance Company and American International Specialty Lines Insurance Company; Judge: Connolly; Division’s Rep.: David Markey; Petitioners’ Reps.: Maria P. Eberle, Lindsay M. LaCava, & Michael Tedesco; Article 33 (by Emma Savino)

The Division sought to vacate a previous order (which we wrote about here) and reopen the record. To recap, Petitioners previously sought, through subpoena, the production of various documents, including those related to two advisory opinions issued to Petitioners and a 2012 TSB-M that announced a policy on how the Department would treat unauthorized non-life insurance companies under Tax Law Article 33. Judge Connolly’s Order only excluded only a small subset of the documents.

Here, the Division’s motion to vacate the order and reopen the record was to allow the DTA to consider nine additional documents responsive to the subpoena, which were apparently missing from the initial response. The Division claimed that these documents were unintentionally omitted. The Division’s motion cited section 3000.16 of the Tax Appeals Tribunal's Rules of Practice and Procedure as support for vacating the order. However, the Judge found that this rule pertains to vacating determinations, not orders. Further, even if the rule pertained to orders, the Division’s motion didn’t establish a basis for vacating the order because it did not allege fraud or misrepresentation on the part of Petitioners, nor did it allege that the nine documents constituted “newly discovered evidence.” Regardless, the Judge found that the Division’s unintentional omission of the documents did not meet the standard of “newly discovered evidence.” So the Judge denied the motion.

The Judge’s latest Order does leave some unanswered questions. The biggest one is: “What happens to the nine documents at issue in the second motion now?” Is the Division required to deliver copies of the documents to Petitioners since they were not excluded from production under the earlier motion and the Judge has now refused to revisit that order? The language of the order is a little vague regarding what happens next, but it is reasonable to read the order as compelling disclosure by the Division.

Comment