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State and Local Tax Blog

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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.  

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TiNY Report for October 29, 2020 (reporting on DTA cases issued October 22)

By on

There were no cases on which to report last week. This week, there are two measly ALJ Determinations, and both are timies. It’s a good thing the TiNY editorial staff isn’t paid by-the-word. One of the timies involves an electronically-provided notice. Electronic issuance of notices… maybe it’s my age showing, but I just don’t trust the process. So, while I was writing this, I toggled my browser over to the Department’s website, logged-on to my OLS (on-line service) account, and confirmed that I have not elected to accept electronic delivery of any notice. If you have an OLS account, I suggest you do the same.


Matter of Palermo; Judge Gardiner; Division’s Rep.: Maria Matos; Petitioner’s Rep.: pro se; Article 22 (by Chris Doyle)

Judge Gardiner converted the Division’s motion for summary determination to a motion to dismiss and granted it. The Judge found that  the Division proved both its standard procedures and that they were followed when it “furnished”(?) the Notice in question to Petitioner via electronic means on March 20, 2017. Thus, Petitioner’s ALJ petition, filed on August 20, 2019, was more than a couple of years too late.

Tax Law § 35 provides:

“Notwithstanding any other provision of New York state law, where the department has obtained authorization of an online services account holder, in such form as may be prescribed by the commissioner, the department may use electronic means of communication to furnish any document it is required to mail per law or regulation. If the department furnishes such document in accordance with this section, department records of such transaction shall constitute appropriate and sufficient proof of delivery thereof and be admissible in any action or proceeding.”

The Judge found that Petitioner opened an OLS account with the Department, and, at that time, “authorized the Division to send notices electronically by checking the relevant boxes in the ‘manage email’ section of her OLS account, thereby indicating her agreement to receive email regarding bills, notices and other notifications.” The Judge determined “that an email alert was sent to petitioner’s email address and the notice of deficiency was posted to petitioner’s OLS account and stored in her OLS message center on March 20, 2017. The email alert sent to petitioner’s email address advised her that ‘you have a new liability due,’ thereby alerting her to view the statutory notice posted in the message center of her OLS account.” 

According to the facts found, the Notice was merely posted on Petitioner’s OLS account. Notably, it does not appear that the Notice was ever “furnished” or “sent” to Petitioner. And the email that the Department sent to Petitioner to inform her of the Notice posted on her OLS account merely said “you have a new liability due.” The Judge found the email alerted Petitioner to view the notice posted on her OLS account. But the email language quoted in the Determination is vague and confusing, doesn’t mention a “notice,” and doesn’t indicate that there is a time limit for responding. Furthermore, a notice of deficiency does not evidence a liability; it evidences a potential liability. So, the email was inaccurate.

Petitioner did not respond to the Division’s motion. If Petitioner had identified the above issues for the Judge, maybe the Division’s motion would have been defeated.

Matter of Zhang; Judge Law; Division’s Rep.: Brandon Batch; Petitioner’s Rep.: pro se; Articles 28 and 29 (by Chris Doyle)

Judge Law granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on June 11, 2018, the Notice to Petitioner’s last known address. Petitioner’s BCMS request, filed on January 24, 2019, was therefore late.

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