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State and Local Tax Blog

About This Blog

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 September 3, 2020 (reporting on DTA cases issued August 24 and 27)

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With apologies to Dickens: “They were the best of timies, they were the worst of timies, but most of all . . . they were timies, and I despair.” Despite having a mix of decisions, determinations, and an ALJ order, with the exception of tax-protestor case, every case this week involves a timie – so don’t blame the messenger.

Anyway, from all of us here at TiNY, we hope that everyone had a safe and socially-distant Labor Day long weekend.

DECISIONS

Matter of Oberlander; Division’s Reps.: Charles Fishbaum and Maria Matos; Petitioner’s Rep.: Leo Gabovich; Article 22 (by Emma Savino)

Some of the facts were modified from the determination (which we wrote about here) so here’s the updated version. The Division sent Petitioner a Notice of Deficiency dated February 20, 2018 (“the Notice”), to a PO Box in Montauk. It also sent a copy to his representative at a New York City address. Thereafter, a Notice and Demand was issued to Petitioner on June 7, 2018, and a copy sent to his representative on June 13, 2018. Petitioner claimed that he filed his Bureau of Conciliation and Mediation Services (“BCMS”) request (the “2018 BCMS request”) on June 21, 2018. The Division asserted that the 2018 BCMS request was filed on September 24, 2018. BCMS then issued a conciliation order on October 19, 2018, dismissing the request as untimely, and Petitioner filed a timely petition.

However, prior to the issuance of the Notice, the Division issued a Notice of Deficiency for the same tax year. Petitioner filed a BCMS request (the “2017 BCMS request”) protesting that notice on July 3, 2017, along with a power of attorney. This request listed Petitioner’s PO Box in Montauk as his address and a Buffalo address for Petitioner’s representative. The power of attorney, however, listed a different address for Petitioner in Montauk and a New York City address for Petitioner’s representative. Ultimately, the Division cancelled this notice because Petitioner filed his Form IT-201 (i.e  New York resident income tax return) for the 2013 tax year, and then it issued the Notice at issue.

The Tribunal found that the Division proved its standard mailing procedures. The issue was whether they were followed to mail the Notice to the representative at his last known addresses. The Tribunal acknowledged that it had not previously addressed whether the requirements for proper service of a notice on an authorized representative should be based upon the requirements for the proper mailing of a notice to a taxpayer’s last known address. It determined that the comparable last known address is the address listed for the representative on the power of attorney. Since the original power of attorney filed with Petitioner’s 2017 BCMS listed a New York City address, that constituted Petitioner’s representative’s last known address, absent a clear and concise notification of a change of address. 

However, the power of attorney filed with the 2017 BCMS request listed a Buffalo address and BCMS had responded by sending a letter to Petitioner’s representative’s Buffalo address. The Tribunal noted that it previously held that an address listed on a BCMS request does not constitute adequate notice of a change of a petitioner’s address. And it determined that same is true for the change in address of a representative. Despite having sent letters to Petitioner’s representative at his Buffalo address prior to the issuance of the Notice, the Tribunal found that the Division “acted reasonably and cannot be faulted for using the address on the initial power of attorney when faced with two addresses for petitioner’s then representative.” So the Tribunal found that Petitioner’s request for conciliation conference was untimely.

Matter of Ohberg; Division’s Rep.: Stephanie Lane; Petitioner’s Rep.: pro se; Article 22 (by Emma Savino)

We wrote about the determination here.

Petitioner made a number of tax-protestor arguments on exception, including that gains from labor are not income, the tax is unconstitutional, the Division has the burden of proving his wages are taxable, the IRS and the Division didn’t follow proper procedures in the disclosure of his federal tax information, and he was denied due process because he couldn’t cross examine the auditor (you get the idea).

The Tribunal found that Petitioner’s argument that he was denied due process was without merit since Petitioner had the opportunity to respond to the Division’s motion and there was no witness testimony presented. It also found that Petitioner offered no evidence to refute the facts supporting the Notice of Deficiency and, instead, relied on the argument that compensation for his labor was not income. Nor did Petitioner offer any evidence to support his allegation that proper procedures were not followed.

So the Tribunal affirmed the determination which found that Division established that there were no triable issues of fact and, therefore, that summary determination in favor of the Division was appropriate. It also affirmed the imposition of the maximum frivolous filing penalty of $500.

DETERMINATIONS
Matter of Elghalide and Eljardin; Judge Galliher; Division’s Rep.: Mary Hurteau; Taxpayers’ Rep.: pro se; Article 22 (by Emma Savino)

The Division issued Petitioners a Notice of Deficiency dated April 10, 2019. Petitioners filed their request for conciliation conference via fax on August 5, 2019. BCMS issued an order dismissing the request as untimely. Petitioners then filed a timely petition, but did not respond to the Division’s motion for summary determination. The Judge found that the Division proved both its standard procedures and that they were followed when it mailed the Notice to Petitioners’ last known address on April 10, 2019. So, the Judge sustained the dismissal of Petitioners’ request for conciliation conference as untimely and granted the Division’s motion for summary determination.

Matter of Hussein and Fattah; Judge Behuniak; Division’s Rep.: Mary Hurteau; Taxpayers’ Rep.: pro se; Article 22 (by Emma Savino)

The Division issued Petitioners a Notice of Deficiency dated January 3, 2019. Petitioners filed their request for conciliation conference via fax on August 16, 2019. BCMS issued an order dismissing the request as untimely. Petitioners then filed a timely petition, but did not respond to the Division’s motion for summary determination. The Judge found that the Division proved both its standard procedures and that they were followed when it mailed the Notice to Petitioners’ last known address on January 3, 2019. So, the Judge sustained the dismissal of Petitioners’ request for conciliation conference as untimely and granted the Division’s motion for summary determination.

ORDER

Matter of Summers; Judge DiFiore; Division’s Rep.: Maria Matos; Taxpayer’s Rep.: Makeeva Darden; Article 22 (by Emma Savino)

The Division issued Petitioner a Notice of Disallowance denying Petitioner’s claim for refund on June 19, 2019. The Notice stated that if Petitioner disagreed, a petition must be filed within two years from the date of the notice. Petitioner filed a petition appealing the Notice on November 19, 2019. The Division filed a motion to dismiss the petition as untimely (hmmm). The Judge found that the petition was timely filed as it was filed within 2 years of the issuance of the Notice of Disallowance. So the Judge denied the motion to dismiss.

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