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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 August 22, 2019 (reporting on DTA cases issued August 15)

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After two weeks with sparse output from the DTA, we should have realized that it would ramp back up at some point. This week we have two decisions and seven determinations.


Matter of Jarvis: Division’s Rep.: Hannelore Smith; Petitioner’s Rep.: Pro Se; Driver’s License Suspension, Tax Law Section 171-v.  

The Petitioner first filed a petition which protested a Notice of Proposed Driver’s License Suspension referral (“the suspension”). The Division filed its answer and, later, a Notice of Motion seeking an order dismissing the petition. The judge denied the Division’s motion and we wrote about that here. Then, after a pre-hearing conference call, the Division’s representative informed the judge by letter that the Petitioner’s liability had been recalculated because certain adjustments had not been applied. This resulted in a liability that was under the threshold for the driver’s license suspension program. The Division also enclosed with this letter a Notice of Cancellation and Discontinuance and the judge issued an Order of Discontinuance where she ordered that the suspension be canceled and the proceeding discontinued.

You’d think that the Petitioner would be happy with this result, but she filed an exception arguing that the discontinuance should not have been issued because it didn’t address whether the liabilities had become fixed and final. Which makes us wonder: was Petitioner’s pro se counsel charging by the hour? Because the suspension had been canceled, the tribunal found this argument to be moot.  Next, the Petitioner argued that the process resulting in the discontinuance didn’t conform to the DTA’s Rules of Practice and Procedure. The tribunal agreed, but also recognized that the Petitioner was not prejudiced by this. But since the suspension had been cancelled, the tribunal had no jurisdiction over the matter. Case (finally?) closed.

Matter of Singh Restaurant; Division’s Rep.: Judge DiFiore; Petitioner’s Rep.: Justin White; Articles 28 and 29.  

The tribunal affirmed the ALJ’s determination, which we wrote about here, that the Petitioner was a purchaser of business assets outside of the ordinary course of business and, therefore, liable for the seller’s sales taxes under the bulk sales rules. The Petitioner’s argument that it only purchased “some tables and chairs and an assignment of [the seller’s] lease” was irrelevant since a bulk sale is a purchase of any of the seller’s business assets outside of the ordinary course of business. In dicta, the tribunal wrote that “the Administrative Law Judge correctly determined that the assignment of the seller’s lease alone would be sufficient to find that a bulk sale had occurred.”  We aren’t sure that a lease is an “asset,” but inasmuch as there were, undeniably, assets transferred (i.e. the tables and chairs), this language should not have had a bearing on the outcome of the case.


Matter of Bounce Around, Inc.; Judge: Russo; Division’s Rep.: Justine Clarke Caplan; Petitioner’s Rep.: Pro Se; Articles 28 and 29. 

The Petitioner was audited and the Division issued two statements of proposed audit changes.  The Petitioner consented to the assessment and signed a statement which included the following: “If I later wish to contest the findings in this agreement, I must first pay the full amount shown due, and file an application, within the time provided by law, for a credit or refund.” The Petitioner paid the amount due with two checks dated June 27, 2008, and August 25, 2008. The Petitioner then filed an application for credit or refund on November 16, 2015, which the Division denied as being outside the statute of limitations. And the judge agreed. The Petitioner had either 2 years from the payment date or 3 years from the date the return was filed to file an application, and its application was well outside of both. Petition denied.

Matter of Bronx City Service Auto Repair, Inc.; Judge: Behuniak; Division’s Rep.: Howard Beyer; Petitioner’s Rep.: Pro Se; Articles 28 and 29. 

The Petitioner filed a petition for revision of a determination or refund of sales and use tax, but it had several issues. These issues included: (1) the petition was signed by a Mr. Estella in his individual capacity and it did not indicate that he was acting as a representative of the Petitioner; (2) the petition didn’t include a notice/assessment number in section V; (3) the petition didn’t allege any facts or errors made by the Commissioner of Taxation and Finance and (4) it didn’t include a copy of the BCMS Conciliation Order. The Division sent the Petitioner a letter explaining that this information should be provided to the DTA, to which the Petitioner did not respond. The Supervising ALJ then issued a Notice of Intent to Dismiss (“NOID”) and gave the Petitioner 30 days to respond and provide this information. But the Petitioner still did not respond. Because the Petitioner never cured the deficiencies in its petition (or even responded) the judge dismissed it.

Welcome Judge Behuniak!  We look forward to parsing your determinations.

Matter of Dev Convenience Corporation; Judge: Behuniak; Division’s Rep.: Brian Evans; Petitioner’s Rep.: Naresh Patel; Articles 28 and 29. 

The Division proved its standard procedures and that they were followed when it mailed the Conciliation Order to the Petitioner’s last known address and to the address provided by the Petitioner’s representative on April 3, 2018. The Petitioner did not file its petition until November 21, 2018, well beyond the 90-day deadline. The judge dismissed the Petitioner’s petition as untimely filed.

Matter of Tirse; Judge: DiFiore; Division’s Rep.: Charles Fishbaum; Petitioner’s Rep.: Pro Se; Article 22. 

The Division proved both BCMS’s standard procedures for mailing Conciliation Orders and that these procedures were followed when it mailed the Order at issue to the Petitioner on June 8, 2018. Therefore, the petition filed on September 7, 2018 was one day too late (remember folks, it’s a 90-day time limit, not a three-month time limit).The Petitioner’s petition was dismissed as untimely.

Matter of Joseph; Judge: Galliher; Division’s Rep.: Brian Evans; Petitioner’s Rep.: Pro Se; Articles 28 and 29. 

The Petitioner filed a petition challenging an assessment bearing ID No. L-046392313, which was postmarked July 20, 2018. The petition stated that the amount of tax determined to be due was $190,623.83 plus penalty and interest. Attached to the petition was one page from Division Form 871 which indicated that the assessment bearing ID No. L-046392313 had been cancelled, but that the Petitioner had unpaid tax of $190,623.83. It also contained the Conciliation Order which dismissed the BCMS request as untimely. The Supervising ALJ issued a NOID because the petition appeared to be not timely filed. The NOID addressed (1) four estimated Notices of Determination, which were electronically issued, (2) one Notice of Determination which was issued by certified mail and (3) the Conciliation Order which dismissed the Petitioner’s challenge to another Notice of Determination. The NOID also stated that a consolidated statement of liabilities (which listed the estimated notices) is not a statutory notice that would confer jurisdiction to the DTA. 

With regard to the four estimated Notices of Determination, the judge found that the Division proved its standard procedures for establishing electronic accounts, obtaining authorization from the account holder for electronic communications, and sending notices electronically, and that these procedures were followed when it furnished the four estimated Notices of Determination to the Petitioner. Thus, because the Petitioner didn’t offer any proof that the notices were not received on November 2, 2016, January 3, 2017, and May 5, 2017, the petition was untimely with respect to these notices as it was filed well beyond the statutory 90-day limit. 

As for the Notice of Determination that was issued by certified mail, the judge found that the Division adequately proved its standard mailing procedures and that they were followed when it mailed the Notice of Determination to the Petitioner’s last known address on September 8, 2017.  Since the petition was filed almost one year later, with respect to this notice, it was untimely.

Finally, with regard to the Conciliation Order that dismissed the Petitioner’s challenge to another Notice of Determination, the judge found that the Division proved its standard procedures and that they were followed when it mailed the Conciliation Order to the Petitioner’s last known address on April 20, 2018.  But, again, the petition was untimely because it was filed 91 days after the Conciliation Order. Close, but no cigar – petition dismissed.

Matter of Oliva; Judge: Maloney; Division’s Rep.: Christopher O’Brien; Petitioner’s Rep.: Jonathan Mondragon; Article 22. 

The Petitioner proved that he had two dependents and was thus entitled to the Empire State child credit. But the judge found that the Petitioner did not satisfactorily prove the amount of income he earned as a labor assistant in 2013. The Petitioner was paid in cash and no Form 1099-Misc was provided by his employer. At the hearing, “Petitioner acknowledged that he was paid weekly in cash, but did not receive a pay stub or similar document showing his earnings. He could not remember the exact amount of his total earnings for 2013, but thought it was around $14,000.00 or $14,400.00.”  That was consistent with the income the Petitioner reported on his return. However, the judge found the Petitioner’s testimony vague, and, in the absence of any corroborating books and records, that the Petitioner had failed to sustain his burden of proving the amount of income earned for the year.  So the judge found that the Petitioner was not entitled to any income credit whatsoever or an Empire State child credit in excess of the minimum credit.

Matter of Tilton; Judge: Gardiner; Division’s Rep.: Anita Luckina; Petitioner’s Rep.: Craig Reilly; Articles 28 and 29. 

OK folks, this is one of ours, so we're going to “Joe Friday” it.

The Petitioner filed her BCMS request o August 14, 2017, which protested two Notices of Determination dated January 5, 2017.  BCMS issued an Order dismissing the request as untimely on September 1, 2017.  The Petitioner filed a timely petition challenging the Order. The Division filed a motion for summary determination on the grounds that the Petitioner started her challenge late. 

When sales taxes are at issue, proof of mailing of a notice creates a presumption of receipt of the notice. The judge acknowledged that, when a case involves sales taxes, the presumption of receipt could be disproved with sufficient evidence. The judge found that the Division adequately proved its standard procedures for mailing notices and that those procedures were followed when the Division mailed the notices to the Petitioner’s last known address. To show that the Petitioner never received the notices, the Petitioner offered into evidence a USPS tracking sheet that stated  “Label Created, not yet in system” for the certified control numbers of the notices that the Division proved had been sent. The judge found that the tracking sheet “merely indicates that no delivery information was available for those particular certified control numbers at the time of petitioner’s search.”  And that was not sufficient, in the judge’s view, to create a material question of fact requiring that the matter go forward to a full evidentiary hearing.  So the judge granted summary determination in favor of the Division.

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