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1. (a) Failure to file return.
(A) In case of failure to file a return under the named subchapters on or before the prescribed date (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return five percent of the amount of such tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction thereof during which such failure continues, not exceeding twenty-five percent in the aggregate.
(B) In the case of a failure to file a return of tax within sixty days of the date prescribed for filing of such return (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, the addition to tax under subparagraph (A) of this paragraph shall not be less than the lesser of one hundred dollars or one hundred percent of the amount required to be shown as tax on such return.
(C) For purposes of this paragraph, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return.
(b) Failure to pay tax shown on return. In case of failure to pay the amounts shown as tax on any return required to be filed under the named subchapters on or before the prescribed date (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return one-half of one percent of the amount of such tax if the failure is not for more than one month, with an additional one-half of one percent for each additional month or fraction thereof during which such failure continues, not exceeding twenty-five percent in the aggregate. For the purpose of computing the addition for any month the amount of tax shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed upon the return. If the amount of tax required to be shown on a return is less than the amount shown as tax on such return, this paragraph shall be applied by substituting such lower amount.
(c) Failure to pay tax required to be shown on return. In case of failure to pay any amount in respect of any tax required to be shown on a return required to be filed under the named subchapters which is not so shown (including an assessment made pursuant to subdivision one of section 11-673 of this subchapter) within ten days of the date of a notice and demand therefor, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount of tax stated in such notice and demand one-half of one percent of such tax if the failure is not for more than one month, with an additional one-half of one percent for each additional month or fraction thereof during which such failure continues, not exceeding twenty-five percent in the aggregate. For the purpose of computing the addition for any month, the amount of tax stated in the notice and demand shall be reduced by the amount of any part of the tax which is paid before the beginning of such month.
(d) Limitations on additions.
(A) With respect to any return, the amount of the addition under paragraph (a) of this subdivision shall be reduced by the amount of the addition under paragraph (b) of this subdivision for any month to which an addition applies under both paragraphs (a) and (b). In any case described in subparagraph (B) of paragraph (a) of this subdivision, the amount of the addition under such paragraph (a) shall not be reduced below the amount provided in such subparagraph.
(B) With respect to any return, the maximum amount of the addition permitted under paragraph (c) of this subdivision shall be reduced by the amount of the addition under paragraph (a) of this subdivision (determined without regard to subparagraph (B) of such paragraph (a)) which is attributable to the tax for which the notice and demand is made and which is not paid within ten days of such notice and demand.
2. Deficiency due to negligence.
(a) If any part of a deficiency is due to negligence or intentional disregard of this subchapter or any of the named subchapters or rules or regulations thereunder (but without intent to defraud), there shall be added to the tax an amount equal to five percent of the deficiency.
(b) There shall be added to the tax (in addition to the amount determined under paragraph (a) of this subdivision) an amount equal to fifty percent of the interest payable under subdivision one of section 11-675 with respect to the portion of the deficiency described in such paragraph (a) which is attributable to the negligence or intentional disregard referred to in such paragraph (a), for the period beginning on the last date prescribed by law for payment of such deficiency (determined without regard to any extension) and ending on the date of the assessment of the tax (or, if earlier, the date of the payment of the tax).
(c) If any payment is shown on a return made by a payor with respect to dividends, patronage dividends and interest under subsection (a) of section six thousand forty-two, subsection (a) of section six thousand forty-four or subsection (a) of section six thousand forty-nine of the internal revenue code of nineteen hundred fifty-four, respectively, and the payee fails to include any portion of such payment in gross income, as that term is defined in paragraph (a) of subdivision four of section 11-674, any portion of an underpayment attributable to such failure shall be treated, for purposes of this subdivision, as due to negligence in the absence of clear and convincing evidence to the contrary. If any addition to tax is imposed under this subdivision by reason of the preceding sentence, the amount of the addition to tax imposed by paragraph (a) of this subdivision shall be five percent of the portion of the underpayment which is attributable to the failure described in the preceding sentence.
3. Failure to file declaration or underpayment of estimated tax. If any taxpayer fails to file a declaration of estimated tax under subchapter two, three or three-A of this chapter, or fails to pay all or any part of an amount which is applied as an installment against such estimated tax, it shall be deemed to have made an underpayment of estimated tax. There shall be added to the tax for the taxable year an amount at the underpayment rate set by the commissioner of finance pursuant to section 11-687 of this subchapter, or, if no rate is set, at the rate of seven and one-half percent per annum upon the amount of the underpayment for the period of the underpayment but not beyond the fifteenth day of the fourth month following the close of the taxable year. Provided, however, that, for taxable years beginning on or after January first, two thousand seventeen and before January first, two thousand eighteen, no amount shall be added to the tax with respect to the portion of such tax related to the amount of any interest deductions directly or indirectly attributable to the amount included in exempt CFC income pursuant to subparagraph (ii) of paragraph (b) of subdivision five-a of section 11-652 of this chapter or the forty percent reduction of such exempt CFC income in lieu of interest attribution if the election described in paragraph (b) of subdivision five-a of such section is made. The amount of the underpayment shall be, with respect to any installment of estimated tax computed on the basis of either the preceding year's tax or the second preceding year's tax, the excess of the amount required to be paid over the amount, if any, paid on or before the last day prescribed for such payment or, with respect to any other installment of estimated tax, the excess of the amount of the installment which would be required to be paid if the estimated tax were equal to ninety percent of the tax shown on the return for the taxable year (or if no return was filed, ninety percent of the tax for such year) over the amount, if any, of the installment paid on or before the last day prescribed for such payment. In any case in which there would be no underpayment if "eighty percent" were substituted for "ninety percent" each place it appears in this subdivision, the addition to the tax shall be equal to seventy-five percent of the amount otherwise determined. No underpayment shall be deemed to exist with respect to a declaration or installment otherwise due on or after the termination of existence of the taxpayer.
4. Exception to addition for underpayment of estimated tax. The addition to tax under subdivision three with respect to any underpayment of any amount which is applied as an installment against estimated tax under subchapter two, three or three-A of this chapter shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of any such amount equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the least:
(a) The tax shown on the return of the taxpayer for the preceding taxable year, if a return showing a liability for tax was filed by the taxpayer for the preceding taxable year and such preceding year was a taxable year of twelve months, or
(b) An amount equal to the tax computed at the rates applicable to the taxable year, but otherwise on the basis of the facts shown on the return of the taxpayer for, and the law applicable to, the preceding taxable year, or
(c) (i) An amount equal to ninety per centum of the tax for the taxable year computed by placing on an annualized basis the taxable income:
(1) for the first three months or the first five months of the taxable year, in the case of the installment required to be paid in the sixth month.
(2) for the first six months or the first eight months of the taxable year, in the case of the installment required to be paid in the ninth month, and
(3) for the first nine months or the first eleven months of the taxable year, in the case of the installment required to be paid in the twelfth month.
(ii) For purposes of subparagraph (i) the taxable income shall be placed on an annualized basis by:
(1) multiplying it by twelve (or, in the case of a taxable year of less than twelve months, the number of months in the taxable year) and
(2) dividing the resulting amount by the number of months in the taxable year (three, five, six, eight, nine or eleven, as the case may be) referred to in subparagraph (i), or
(d) (i) If the base period percentage for any six consecutive months of the taxable year equals or exceeds seventy percent, an amount equal to ninety percent of the tax determined in the following manner:
(A) take the taxable income for all months during the taxable year preceding the filing month,
(B) divide such amount by the base period percentage for all months during the taxable year preceding the filing month,
(C) determine the tax on the amount determined under clause (B), and
(D) multiply the tax determined under clause (C) by the base period percentage for the filing month and all months during the taxable year preceding the filing month.
(ii) For purposes of subparagraph (i):
(A) the base period percentage for any period of months shall be the average percent which the taxable income for the corresponding months in each of the three preceding taxable years bears to the taxable income for the three preceding taxable years. The commissioner of finance may by regulations provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances, and
(B) the term "filing month" means the month in which the installment is required to be paid.
5. (a) Except as provided in paragraph (b) hereof, paragraphs (a) and (b) of subdivision four of this section shall not apply in the case of any corporation (or any predecessor corporation) which had entire net income, or the portion thereof allocated within the city, of one million dollars or more for any taxable year during the three taxable years immediately preceding the taxable year involved.
(b) The amount treated as the estimated tax under paragraphs (a) and (b) of subdivision four of this section shall in no event be less than seventy-five percent of the tax shown on the return for the taxable year beginning in nineteen hundred eighty-three or, if no return was filed, seventy-five percent of the tax for such year.
6. Deficiency due to fraud.
(a) If any part of a deficiency is due to fraud, there shall be added to the tax an amount equal to two times the deficiency.
(b) [Repealed.]
(c) The addition to tax under this subdivision shall be in lieu of any other addition to tax imposed by subdivision one or two.
7. Additional penalty. Any person who with fraudulent intent shall fail to pay under the named subchapters any tax, or to make, render, sign or certify any return or declaration of estimated tax, or to supply any information within the time required by or under any of the named subchapters, shall be liable to penalty of not more than one thousand dollars, in addition to any other amounts required under this subchapter to be imposed, assessed and collected by the commissioner of finance. The commissioner of finance shall have the power, in his or her discretion, to waive, reduce or compromise any penalty under this subdivision.
8. Additions treated as tax. The additions to tax and penalties provided by this section shall be paid upon notice and demand and shall be assessed, collected and paid in the same manner as taxes, and any reference in this subchapter to tax imposed by any of the named subchapters shall be deemed also to refer to the additions to tax and penalties provided by this section. For purposes of section 11-672 of this subchapter, this subdivision shall not apply to:
(a) any addition to tax under subdivision one except as to that portion attributable to a deficiency;
(b) any addition to tax under subdivision three or fourteen; and
(c) any additional penalties under subdivisions seven and twelve.
9. Determination of deficiency. For purposes of subdivisions two and six the amount shown as the tax by the taxpayer upon its return shall be taken into account in determining the amount of the deficiency only if such return was filed on or before the last day prescribed for the filing of such return, determined with regard to any extension of time for such filing.
10. Person defined. For purposes of subdivisions seven and twelve, the term "person" includes an individual, corporation or partnership or an officer or employee of any corporation (including a dissolved corporation), or a member or employee of any partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.
11. Substantial understatement of liability. If there is a substantial understatement of tax for any taxable year, there shall be added to the tax an amount equal to ten percent of the amount of any underpayment attributable to such understatement. For purposes of this subdivision, there is a substantial understatement of tax for any taxable year if the amount of the understatement for the taxable year exceeds the greater of ten percent of the tax required to be shown on the return for the taxable year or five thousand dollars. For purposes of the preceding sentence, the term "understatement" means the excess of the amount of the tax required to be shown on the return for the taxable year, over the amount of the tax imposed which is shown on the return, reduced by any rebate (within the meaning of subdivision eight of section 11-672). The amount of such understatement shall be reduced by that portion of the understatement which is attributable to the tax treatment of any item by the taxpayer if there is or was substantial authority for such treatment, or any item with respect to which the relevant facts affecting the item's tax treatment are adequately disclosed in the return or in a statement attached to the return. The commissioner of finance may waive all or any part of the addition to tax provided by this subdivision on a showing by the taxpayer that there was reasonable cause for the understatement (or part thereof) and that the taxpayer acted in good faith.
12. Aiding or assisting in the giving of fraudulent returns, reports, statements or other documents.
(a) Any person who, with the intent that tax be evaded, shall, for a fee or other compensation or as an incident to the performance of other services for which such person receives compensation, aid or assist in, or procure, counsel, or advise the preparation or presentation under, or in connection with any matter arising under this chapter of any return, report, declaration, statement or other document which is fraudulent or false as to any material matter, or supply any false or fraudulent information, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, report, declaration, statement or other document shall pay a penalty not exceeding ten thousand dollars.
(b) For purposes of paragraph (a) of this subdivision, the term "procures" includes ordering (or otherwise causing) a subordinate to do an act, and knowing of, and not attempting to prevent, participation by a subordinate in an act. The term "subordinate" means any other person (whether or not a director, officer, employee, or agent of the taxpayer involved) over whose activities the person has direction, supervision, or control.
(c) For purposes of paragraph (a) of this subdivision, a person furnishing typing, reproducing, or other mechanical assistance with respect to a document shall not be treated as having aided or assisted in the preparation of such document by reason of such assistance.
(d) The penalty imposed by this subdivision shall be in addition to any other penalty provided by law.
13. Failure to file report of information relating to certain interest payments. In case of failure to file the report of information required under either subdivision two-a of section 11-605 of this chapter or subdivision two-a of section 11-655 of this chapter, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the tax a penalty of five hundred dollars.
14. Failure to include on return information relating to issuer's allocation percentage. Where a return is filed but does not contain (1) the information necessary to compute the taxpayer's issuer's allocation percentage, as defined in subparagraph one of paragraph (b) of subdivision three of section 11-604 of this chapter, where the same is called for on the return, or, (2) the taxpayer's issuer's allocation percentage, where the same is called for on the return but where all of the information necessary for the computation of such percentage is not called for on the return, then unless it is shown that such failure is due to reasonable cause and not due to willful neglect there shall be added to the tax a penalty of five hundred dollars.
15. False or fraudulent document penalty. Any taxpayer that submits a false or fraudulent document to the department shall be subject to a penalty of one hundred dollars per document submitted, or five hundred dollars per tax return submitted. Such penalty shall be in addition to any other penalty or addition provided by law.
(Am. 2018 N.Y. Laws Ch. 59, 4/12/2018, eff. 4/12/2018)
Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 1990/045.
1. General. The commissioner of finance, within the applicable period of limitations, may credit an overpayment of tax and interest on such overpayment against any liability in respect of any tax imposed by this title or on the taxpayer who made the overpayment, and the balance shall be refunded out of the proceeds of the tax. Such credit of an overpayment shall be applied before such overpayment, or any portion thereof, is paid to the state commissioner of taxation and finance pursuant to section one hundred seventy-one-m of the tax law.
2. Credits against estimated tax. The commissioner of finance may prescribe regulations providing for the crediting against the estimated tax under subchapter two, three or three-A of this chapter for any taxable year of the amount determined to be an overpayment of tax under any such subchapter for a preceding taxable year. If any overpayment of tax is so claimed as a credit against estimated tax for the succeeding taxable year, such amount shall be considered as a payment of the tax under subchapter two, three or three-A of this chapter for the succeeding taxable year (whether or not claimed as a credit in the declaration of estimated tax for such succeeding taxable year), and no claim for credit or refund of such overpayment shall be allowed for the taxable year for which the overpayment arises.
3. Rule where no tax liability. If there is no tax liability for a period in respect of which an amount is paid as tax, such amount shall be considered an overpayment.
4. Assessment and collection after limitation period. If any amount of tax is assessed or collected after the expiration of the period of limitations properly applicable thereto, such amount shall be considered an overpayment.
5. Assignment of overpayment. A credit for an overpayment of tax under any of the named subchapters may be assigned by the taxpayer to a corporation liable to pay taxes under any of the named subchapters, and the assignee of the whole or any part of such credit, on filing such assignment with the commissioner of finance, shall thereupon be entitled to credit upon the books of the commissioner of finance for the amount thereof on its current account for taxes, in the same manner and to the same effect as though the credit had originally been allowed in its favor.
6. Notwithstanding article fifty-two of the civil practice law and rules or any other provision of law to the contrary, the procedures for the enforcement of money judgments shall not apply to the department of finance, or to any officer or employee of such department, as a garnishee, with respect to any amount of money to be refunded or credited to a taxpayer under this chapter.
(Am. 2022 N.Y. Laws Ch. 555, 8/31/2022, eff. 8/31/2022)
1. General. Claim for credit or refund of an overpayment of tax under any of the named subchapters shall be filed by the taxpayer within three years from the time the return was filed or two years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed within two years from the time the tax was paid. If the claim is filed within the three year period, the amount of the credit or refund shall not exceed the portion of the tax paid within the three years immediately preceding the filing of the claim plus the period of any extension of time for filing the return. If the claim is not filed within the three year period, but is filed within the two year period, the amount of the credit or refund shall not exceed the portion of the tax paid during the two years immediately preceding the filing of the claim. Except as otherwise provided in this section, if no claim is filed, the amount of a credit or refund shall not exceed the amount which would be allowable if a claim had been filed on the date the credit or refund is allowed. For special restriction in a proceeding on a claim for refund of tax paid pursuant to an assessment made as a result of: (a) a net operating loss carryback, or (b) an increase or decrease in federal or New York state taxable income or other basis of tax or federal or New York state tax, or (c) a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were a deficiency for federal or New York state income tax purposes, see paragraph (g) of subdivision three of section 11-674 of this subchapter.
2. Extension of time by agreement. If any agreement under the provisions of paragraph (b) of subdivision three of section 11-674 of this subchapter (extending the period of assessment of tax) is made within the period prescribed in subdivision one for the filing of a claim for credit or refund, the period for filing a claim for credit or refund, or for making credit or refund if no claim is filed, shall not expire prior to six months after the expiration of the period within which an assessment may be made pursuant to the agreement or any extension thereof. The amount of such credit or refund shall not exceed the portion of the tax paid after the execution of the agreement and before the filing of the claim or the making of the credit or refund, as the case may be, plus the portion of the tax paid within the period which would be applicable under subdivision one if a claim had been filed on the date the agreement was executed.
3. Notice of change or correction of federal or New York state income or other basis of tax. If a taxpayer is required by subchapter two, three or three-A of this chapter to file a report or amended return in respect of (a) a decrease or increase in federal or New York state taxable income, alternative minimum taxable income or other basis of tax or federal or New York state tax, (b) a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were an overpayment for federal or New York state income tax purposes, claim for credit or refund of any resulting overpayment of tax shall be filed by the taxpayer within two years from the time such report or amended return was required to be filed with the commissioner of finance. If the report or amended return required by subchapter two, three or three-A of this chapter is not filed within the ninety day period therein specified, no interest shall be payable on any claim for credit or refund of the overpayment attributable to the federal or New York state change or correction. The amount of such credit or refund: (c) shall, (i) for taxable years beginning before January first, two thousand fifteen, be computed without change of the allocation of income or capital upon which the taxpayer's return (or any additional assessment) was based, and, (ii) for taxable years beginning on or after January first, two thousand fifteen, be computed without change of the allocation of income or capital upon which the taxpayer's return (or any additional assessment) was based to the extent that the claim for refund arises from a decrease or increase in federal taxable income or other basis of tax or federal tax, or from a federal change, correction, renegotiation, computation or recomputation of tax, which is treated in the same manner as if it were an overpayment for federal income tax purposes, and (d) shall not exceed the amount of the reduction in tax attributable to such decrease or increase in federal or New York state taxable income, alternative minimum taxable income or other basis of tax or federal or New York state tax or to such federal or New York state change or correction or renegotiation, or computation or recomputation of tax.
This subdivision shall not affect the time within which or the amount for which a claim for credit or refund may be filed apart from this subdivision.
4. Overpayment attributable to net operating loss carry back or capital loss carry back. A claim for credit or refund of so much of an overpayment under subchapter two or three-A of this chapter as is attributable to the application to the taxpayer of a net operating loss carry back or a capital loss carry back shall be filed within three years from the time the return was due (including extensions thereof) for the taxable year of the loss, or within the period prescribed in subdivision two in respect of such taxable year, or within the period prescribed in subdivision three, where applicable, in respect to the taxable year to which the net operating loss or capital loss is carried back, whichever expires the latest. Where such claim for credit or refund is filed after the expiration of the period prescribed in subdivision one or in subdivision two where applicable, in respect to the taxable year to which the net operating loss or capital loss is carried back, the amount of such credit or refund shall be computed without change of the allocation of income or capital upon which the taxpayer's return (or any additional assessment) was based.
5. Failure to file claim within prescribed period. No credit or refund shall be allowed or made, except as provided in subdivision six of this section or subdivision four of section 11-681 of this subchapter, after the expiration of the applicable period of limitation specified in this subchapter, unless a claim for credit or refund is filed by the taxpayer within such period. Any later credit shall be void and any later refund erroneous. No period of limitations specified in any other law shall apply to the recovery by a taxpayer of moneys paid in respect of taxes under the named subchapters.
6. Effect of a petition to tax appeals tribunal. If a notice of deficiency for a taxable year has been mailed to the taxpayer under section 11-672 of this subchapter and if the taxpayer files a timely petition with the tax appeals tribunal under section 11-680 of this subchapter, the tax appeals tribunal may determine that the taxpayer has made an overpayment for such year (whether or not it also determines a deficiency for such year). No separate claim for credit or refund for such year shall be filed, and no credit or refund for such year shall be allowed or made, except:
(a) as to overpayment determined by a decision of the tax appeals tribunal which has become final; and
(b) as to any amount collected in excess of an amount computed in accordance with the decision of the tax appeals tribunal which has become final; and
(c) as to any amount collected after the period of limitation upon the making of levy for collection has expired; and
(d) as to any amount claimed as a result of a change or correction described in subdivision three.
7. Limit on amount of credit or refund. The amount of overpayment determined under subdivision six shall, when the decision of the tax appeals tribunal has become final, be credited or refunded in accordance with subdivision one of section 11-677 of this subchapter and shall not exceed the amount of tax which the tax appeals tribunal determines as part of its decision was paid:
(a) after the mailing of the notice of deficiency, or
(b) within the period which would be applicable under subdivision one, two or three, if on the date of the mailing of the notice of deficiency a claim had been filed (whether or not filed) stating the ground upon which the tax appeals tribunal finds that there is an overpayment. For special restriction on credit or refund in a proceeding on a petition for redetermination of a deficiency where the notice of deficiency is issued as a result of (i) a net operating loss carryback, or (ii) an increase or decrease in federal or New York state taxable income or other basis of tax or federal or New York state tax, or (iii) a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were a deficiency for federal or New York state income tax purposes, see paragraph (g) of subdivision three of section 11-674 of this subchapter.
8. Early return. For purposes of this section, any return filed before the last day prescribed for the filing thereof shall be considered as filed on such last day, determined without regard to any extension of time granted the taxpayer.
9. Prepaid tax. For purposes of this section, any tax paid by the taxpayer before the last day prescribed for its payment (including any amount paid by the taxpayer as estimated tax for a taxable year) shall be deemed to have been paid by it on the fifteenth day of the third month following the close of the taxable year the income of which is the basis for tax under subchapter two, three or three-A of this chapter, or on the last day prescribed in part one of subchapter three or subchapter four for the filing of a final return for such taxable year, or portion thereof, determined in all cases without regard to any extension of time granted the taxpayer.
10. Cross-reference. For provision barring refund of overpayment credited against tax of a succeeding year, see subdivision two of section 11-677 of this subchapter.
11. Notice of change or correction of sales and compensating use tax liability.
(a) If a taxpayer is required by subchapter two or three-A of this chapter to file a report or amended return in respect of a change or correction of its sales and compensating use tax liability, claim for credit or refund of any resulting overpayment of tax shall be filed by the taxpayer within two years from the time such report or amended return was required to be filed with the commissioner of finance. The amount of such credit or refund shall be computed without change of the allocation of income or capital upon which the taxpayer's return (or any additional assessment) was based, and shall not exceed the amount of the reduction in tax attributable to such change or correction of sales and compensating use tax liability.
(b) This subdivision shall not affect the time within which or the amount for which a claim for credit or refund may be filed apart from this subdivision.
1. General. Notwithstanding the provisions of section three-a of the general municipal law, interest shall be allowed and paid as follows at the overpayment rate set by the commissioner of finance pursuant to section 11-687 of this subchapter, or, if no rate is set, at the rate of six percent per annum upon any overpayment in respect to the tax imposed by any of the named subchapters:
(a) from the date of the overpayment to the due date of an amount against which a credit is taken;
(b) from the date of the overpayment to a date (to be determined by the commissioner of finance) preceding the date of a refund check by not more than thirty days, whether or not such refund check is accepted by the taxpayer after tender of such check to the taxpayer. The acceptance of such check shall be without prejudice to any right of the taxpayer to claim any additional overpayment and interest thereon.
(c) Late and amended returns and claims for credit or refund. Notwithstanding paragraph (a) or (b) of this subdivision, in the case of an overpayment claimed on a return of tax which is filed after the last date prescribed for filing such return (determined with regard to extensions), or claimed on an amended return of tax or claimed on a claim for credit or refund, no interest shall be allowed or paid for any day before the date on which such return or claim is filed.
(d) Interest on certain refunds. To the extent provided for in regulations promulgated by the commissioner of finance, if an item of income, gain, loss, deduction or credit is changed from the taxable year or period in which it is reported to the taxable year or period in which it belongs and the change results in an underpayment in a taxable year or period and an overpayment in some other taxable year or period, the provisions of paragraph (c) of this subdivision with respect to an overpayment shall not be applicable to the extent that the limitation in such paragraph on the right to interest would result in a taxpayer not being allowed interest for a length of time with respect to an overpayment while being required to pay interest on an equivalent amount of the related underpayment. However, this paragraph shall be not construed as limiting or mitigating the effect of any statute of limitations or any other provision of law relating to the authority of such commissioner to issue a notice of deficiency or to allow a credit or refund of an overpayment.
(e) Amounts of less than one dollar. No interest shall be allowed or paid if the amount thereof is less than one dollar.
2. Advance payment of tax and estimated tax. The provisions of subdivisions eight and nine of section 11-678 of this subchapter applicable in determining the date of payment of tax for purposes of determining the period of limitations on credit or refund, shall be applicable in determining the date of payment for purposes of this section.
3. Tax refund within three months of claim for overpayment. If any overpayment of tax imposed by any of the named subchapters is credited or refunded within three months after the last date prescribed (or permitted by extension of time) for filing the return of such tax on which such overpayment was claimed or within three months after such return was filed, whichever is later, or within three months after an amended return was filed claiming such overpayment or within three months after a claim for credit or refund was filed on which such overpayment was claimed, no interest shall be allowed under this section on any such overpayment. For purposes of this subdivision, any amended return or claim for credit or refund filed before the last day prescribed (or permitted by extension of time) for the filing of the return of tax for such year or period shall be considered as filed on such last day.
4. Refund of tax caused by carryback. For purposes of this section, if any overpayment of tax imposed by subchapter two or three-A of this chapter results from a carry back of a net operating loss or a net capital loss, such overpayment shall be deemed not to have been made prior to the filing date for the taxable year in which such net operating loss or net capital loss arises. Such filing date shall be determined without regard to extensions of time to file. For purposes of subdivision three of this section any overpayment described herein shall be treated as an overpayment for the loss year and such subdivision shall be applied with respect to such overpayment by treating the return for the loss year as not filed before claim for such overpayment is filed. The term "loss year" means the taxable year in which such loss arises.
5. No interest until return in processible form.
(a) For purposes of subdivisions one and three of this section, a return shall not be treated as filed until it is filed in processible form.
(b) For purposes of paragraph (a) of this subdivision, a return is in a processible form if:
(A) such return is filed on a permitted form, and
(B) such return contains:
(i) the taxpayer's name; address, and identifying number and the required signatures, and
(ii) sufficient required information (whether on the return or on required attachments) to permit the mathematical verification of tax liability shown on the return.
6. Cross-reference. For provision with respect to interest after failure to file a report of federal or New York state change or correction or amended return under subchapter two, three or three-A, see subdivision three of section 11-678 of this subchapter.
1. General. The form of a petition to the tax appeals tribunal, and further proceedings before the tax appeals tribunal in any case initiated by the filing of a petition, shall be governed by such rules as the tax appeals tribunal shall prescribe. No petition shall be denied in whole or in part without opportunity for a hearing on reasonable prior notice. Such hearing and any appeal to the tribunal sitting en banc from the decision rendered in such hearing shall be conducted in the manner and subject to the requirements prescribed by the tax appeals tribunal pursuant to sections one hundred sixty-eight through one hundred seventy-two of the charter. A decision of the tax appeals tribunal shall be rendered, and notice thereof shall be given, in the manner provided by section one hundred seventy-one of the charter.
2. Petition for redetermination of a deficiency. Within ninety days, or one hundred fifty days if the notice is addressed to a taxpayer whose last known address is outside of the United States, after the mailing of the notice of deficiency authorized by section 11-672 of this subchapter, or if the commissioner of finance has established a conciliation procedure pursuant to section 11-124 of the code and the taxpayer has requested a conciliation conference in accordance therewith, after ninety days from the mailing of the conciliation decision or the date of the commissioner's confirmation of the discontinuance of the conciliation proceeding, the taxpayer may file a petition with the tax appeals tribunal for redetermination of the deficiency. Such petition may also assert a claim for refund for the same taxable year or years, subject to the limitations of subdivision seven of section 11-678 of this subchapter. For special restriction where the notice of deficiency relates to a proposed assessment made as a result of: (a) a net operating loss carry back or a capital loss carry back, (b) an increase or decrease in federal or New York state taxable income or other basis of tax or federal or New York state tax, or (c) a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were a deficiency for federal or New York state income tax purposes, see paragraph (g) of subdivision three of section 11-674 of this subchapter.
3. Petition for refund. A taxpayer may file a petition with the tax appeals tribunal for the amounts asserted in a claim for refund if:
(a) the taxpayer has filed a timely claim for refund with the commissioner of finance,
(b) the taxpayer has not previously filed with the tax appeals tribunal a timely petition under subdivision two for the same taxable year unless the petition under this subdivision relates to a separate claim for credit or refund properly filed under subdivision six of section 11-678 of this subchapter, and
(c) either: (1) six months have expired since the claim was filed, or (2) the commissioner of finance has mailed to the taxpayer, by registered or certified mail, a notice of disallowance of such claim in whole or in part. No petition under this subdivision shall be filed more than two years after the date of mailing of a notice of disallowance, unless prior to the expiration of such two year period it has been extended by written agreement between the taxpayer and the commissioner of finance. If a taxpayer files a written waiver of the requirement that the taxpayer be mailed a notice of disallowance, the two year period prescribed by this subdivision for filing a petition for refund shall begin on the date such waiver is filed.
(d) If the commissioner of finance has established a conciliation procedure pursuant to section 11-124 of the code, a taxpayer which is eligible to file a petition for refund with the tax appeals tribunal pursuant to this subdivision may request a conciliation conference prior to filing such petition, provided the request is made within the time prescribed for filing the petition. Notwithstanding anything in this subdivision to the contrary, if the taxpayer has requested a conciliation conference in accordance with the procedure established pursuant to section 11-124 of the code, a petition for refund may be filed no later than ninety days from the mailing of the conciliation decision or the date of the commissioner's confirmation of the discontinuance of the conciliation proceeding.
4. Assertion of deficiency after filing petition.
(a) Petition for redetermination of deficiency. If a taxpayer files with the tax appeals tribunal a petition for redetermination of a deficiency, the tax appeals tribunal shall have power to determine a greater deficiency than asserted in the notice of deficiency and to determine if there should be assessed any addition to tax or penalty provided in section 11-676 of this subchapter, if claim therefor is asserted at or before the hearing under rules of the tax appeals tribunal.
(b) Petition for refund. If the taxpayer files with the tax appeals tribunal a petition for credit or refund for a taxable year, the tax appeals tribunal may:
(1) determine a deficiency for such year as to any amount of deficiency asserted at or before the hearing under rules of the tax appeals tribunal and within the period in which an assessment would be timely under section 11-674 of this subchapter, or
(2) deny so much of the amount for which credit or refund is sought in the petition, as is offset by other issues pertaining to the same taxable year which are asserted at or before the hearing under rules of the tax appeals tribunal.
(c) Opportunity to respond. A taxpayer shall be given a reasonable opportunity to respond to any matters asserted by the commissioner of finance under this subdivision.
(d) Restriction on further notices of deficiency. If the taxpayer files a petition with the tax appeals tribunal under this section, no notice of deficiency under section 11-672 of this subchapter may thereafter be issued by the commissioner of finance for the same taxable year, except in case of fraud or with respect to an increase or decrease in federal or New York state taxable income, alternative minimum taxable income or other basis of tax or federal or New York state tax or a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were a deficiency for federal or New York state income tax purposes, required to be reported under subchapter two, three or three-A of this chapter or with respect to a state change or correction of sales and compensating use tax liability required to be reported under subchapter two or three-A of this chapter.
5. Burden of proof. In any case before the tax appeals tribunal under this subchapter, the burden of proof shall be upon the petitioner except for the following issues, as to which the burden of proof shall be upon the commissioner of finance:
(a) whether the petitioner has been guilty of fraud with intent to evade tax;
(b) whether the petitioner is liable as the transferee of property of a taxpayer, but not to show that the taxpayer was liable for the tax;
(c) whether the petitioner is liable for any increase in a deficiency where such increase is asserted initially after a notice of deficiency was mailed and a petition under this section filed, unless such increase in deficiency is the result of an increase or decrease in federal or New York state taxable income, alternative minimum taxable income or other basis of tax or federal or New York state tax or a federal or New York state change or correction or renegotiation, or computation or recomputation of tax, which is treated in the same manner as if it were a deficiency for federal or New York state income tax purposes, required to be reported under subchapter two, three or three-A of this chapter, and of which increase, decrease, change or correction or renegotiation, or computation or recomputation, the commissioner of finance had no notice at the time he or she mailed the notice of deficiency or unless such increase in deficiency is the result of a change or correction of sales and compensating use tax liability required to be reported under subchapter two or three-A of this chapter, and of which change or correction the commissioner of finance had no notice at the time he or she mailed the notice of deficiency; and
(d) whether any person is liable for a penalty under subdivision twelve of section 11-676.
6. Evidence of related federal or state determination. Evidence of a federal or state determination relating to issues raised in a case before the tax appeals tribunal under this section shall be admissible, under rules established by the tax appeals tribunal.
7. Jurisdiction over other years. The tax appeals tribunal shall consider such facts with relation to the taxes for other years as may be necessary correctly to determine the tax for the taxable year, but in so doing shall have no jurisdiction to determine whether or not the tax for any other year has been overpaid or underpaid.
1. General. A decision of the tax appeals tribunal sitting en banc shall be subject to judicial review at the instance of any taxpayer affected thereby in the manner provided by law for the review of a final decision or action of administrative agencies of the city. An application by a taxpayer for such review must be made within four months after notice of the decision is sent by certified mail, return receipt requested, to the taxpayer and the commissioner of finance.
2. Judicial review exclusive remedy. The review of a decision of the tax appeals tribunal provided by this section shall be the exclusive remedy available to any taxpayer for the judicial determination of the liability of the taxpayer for the taxes imposed by the named subchapters.
3. Assessment pending review; review bond. Irrespective of any restrictions on the assessment and collection of deficiencies, the commissioner of finance may assess a deficiency determined by the tax appeals tribunal in a decision rendered pursuant to section one hundred seventy-one of the charter after the expiration of the period specified in subdivision one, notwithstanding that an application for judicial review in respect of such deficiency has been duly made by the taxpayer unless the taxpayer, at or before the time the taxpayer's application for review is made, has paid the deficiency, has deposited with the commissioner of finance the amount of the deficiency, or has filed with the commissioner of finance a bond (which may be a jeopardy bond under subdivision eight of section 11-685 of this subchapter) in the amount of the portion of the deficiency (including interest and other amounts) in respect of which the application for review is made and all costs and charges which may accrue against the taxpayer in the prosecution of the proceeding, including costs of all appeals, and with surety approved by a justice of the supreme court of the state, conditioned upon the payment of the deficiency (including interest and other amounts) as finally determined and such costs and charges. If, as a result of a waiver of the restrictions on the assessment and collection of a deficiency, any part of the amount determined by the tax appeals tribunal is paid after the filing of the review bond, such bond shall, at the request of the taxpayer, be proportionately reduced.
4. Credit, refund or abatement after review. If the amount of a deficiency determined by the tax appeals tribunal is disallowed in whole or in part by the court of review, the amount so disallowed shall be credited or refunded to the taxpayer, without the making of claim therefor, or, if payment has not been made, shall be abated.
5. Date of finality of tax appeals tribunal decision. A decision of the tax appeals tribunal shall become final upon the expiration of the period specified in subdivision one for making an application for review, if no such application has been duly made within such time, or if such application has been duly made, upon expiration of the time for all further judicial review, or upon the rendering by the tax appeals tribunal of a decision in accordance with the mandate of the court on review. Notwithstanding the foregoing, for the purpose of making an application for review, the decision of the tax appeals tribunal shall be deemed final on the date the notice of decision is sent by certified mail to the taxpayer and the commissioner of finance.
1. Timely mailing.
(a) If any return, declaration of estimated tax, claim, statement, notice, petition, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of this subchapter or of the named subchapters is, after such period or such date, delivered by United States mail to the commissioner of finance, tax appeals tribunal, bureau, office, officer or person with which or with whom such document is required to be filed, or to which or to whom such payment is required to be made, the date of the United States postmark stamped on the envelope shall be deemed to be the date of delivery. This subdivision shall apply only if the postmark date falls within the prescribed period or on or before the prescribed date for the filing of such document, or for making the payment, including any extension granted for such filing or payment, and only if such document or payment was deposited in the mail, postage prepaid, properly addressed to the commissioner of finance, tax appeals tribunal, bureau, office, officer or person with which or with whom the document is required to be filed or to which or to whom such payment is required to be made. If any document is sent by United States registered mail, such registration shall be prima facie evidence that such document was delivered to the commissioner of finance, tax appeals tribunal, bureau, office, officer or person to which or to whom addressed. To the extent that the commissioner of finance or, where relevant, the tax appeals tribunal shall prescribe by regulation, certified mail may be used in lieu of registered mail under this subdivision. Except as provided in paragraph (b) of this subdivision, this subdivision shall apply in the case of postmarks not made by the United States postal service only if and to the extent provided by regulations of the commissioner of finance or, where relevant, the tax appeals tribunal.
(b) (i) Any reference in paragraph (a) of this subdivision to the United States mail shall be treated as including a reference to any delivery service designated by the secretary of the treasury of the United States pursuant to section seventy-five hundred two of the internal revenue code and any reference in paragraph (a) of this subdivision to a United States postmark shall be treated as including a reference to any date recorded or marked in the manner described in section seventy-five hundred two of the internal revenue code by a designated delivery service. If the commissioner of finance finds that any delivery service designated by such secretary is inadequate for the needs of the city, the commissioner may withdraw such designation for purposes of this title. The commissioner may also designate additional delivery services meeting the criteria of section seventy-five hundred two of the internal revenue code for purposes of this title, or may withdraw any such designation if the commissioner of finance finds that a delivery service so designated is inadequate for the needs of the city. Any reference in paragraph (a) of this subdivision to the United States mail shall be treated as including a reference to any delivery service designated by the commissioner of finance and any reference in paragraph (a) of this subdivision to a United States postmark shall be treated as including a reference to any date recorded or marked in the manner described in section seventy-five hundred two of the internal revenue code by a delivery service designated by the commissioner of finance. Notwithstanding the foregoing, any withdrawal of designation or additional designation by the commissioner of finance shall not be effective for purposes of service upon the tax appeals tribunal, unless and until such withdrawal of designation or additional designation is ratified by the president of the tax appeals tribunal.
(ii) Any equivalent of registered or certified mail designated by the United States secretary of the treasury, or as may be designated by the commissioner of finance pursuant to the same criteria used by such secretary for such designations pursuant to section seventy-five hundred two of the internal revenue code, shall be included within the meaning of registered or certified mail as used in paragraph (a) of this subdivision. If the commissioner of finance finds that any equivalent of registered or certified mail designated by such secretary or the commissioner of finance is inadequate for the needs of the city, the commissioner of finance may withdraw such designation for purposes of this title. Notwithstanding the foregoing, any withdrawal of designation or additional designation by the commissioner of finance shall not be effective for purposes of service upon the tax appeals tribunal, unless and until such withdrawal of designation or additional designation is ratified by the president of the tax appeals tribunal.
2. Last known address. For purposes of this subchapter, a taxpayer's last known address shall be the address given in the last return filed by it, unless subsequently to the filing of such return the taxpayer shall have notified the commissioner of finance of a change of address.
3. Last day a Saturday, Sunday or legal holiday. When the last day prescribed under authority of this subchapter or the named subchapters (including any extension of time) for performing any act falls on a Saturday, Sunday, or legal holiday in the state, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday or legal holiday.
4. Certificate; unfiled return. For purposes of this subchapter and sections one hundred sixty-eight through one hundred seventy-two of the charter, the certificate of the commissioner of finance to the effect that a tax has not been paid, that a return or declaration of estimated tax has not been filed, or that information has not been supplied, as required by or under the provisions of this chapter, shall be prima facie evidence that such tax has not been paid, that such return or declaration has not been filed, or that such information has not been supplied.
1. Collection procedures. The taxes imposed by the named subchapters shall be collected by the commissioner of finance, and he or she may establish the mode or time for the collection of any amount due him or her thereunder if not otherwise specified. The commissioner of finance shall, upon request, give a receipt for any sum collected thereunder. The commissioner of finance may authorize banks or trust companies which are depositaries or financial agents of the city to receive and give a receipt for any tax imposed under the named subchapters in such manner, at such times, and under such conditions as the commissioner of finance may prescribe; and the commissioner of finance shall prescribe the manner, times and conditions under which the receipt of such tax by such banks and trust companies is to be treated as payment of such tax to the commissioner of finance.
2. Notice and demand for tax. The commissioner of finance shall as soon as practicable give notice to each taxpayer liable for any amount of tax, addition to tax, penalty or interest, which has been assessed but remains unpaid, stating the amount and demanding payment thereof. Such notice shall be left at the principal office of the taxpayer in the city or shall be sent by mail to such taxpayer's last known address. Except where the commissioner of finance determines that collection would be jeopardized by delay, if any tax is assessed prior to the last date (including any date fixed by extension) prescribed for payment of such tax, payment of such tax shall not be demanded until after such date.
3. Issuance of warrant after notice and demand. If any corporation or other person liable under the named subchapters for the payment of any tax, addition to tax, penalty or interest neglects or refuses to pay the same within ten days after notice and demand therefor is given to such corporation or other person under subdivision two, the commissioner of finance may within six years after the date of such assessment issue a warrant directed to the sheriff of any county of the state, or to any officer or employee of the department of finance, commanding him or her to levy upon and sell the real and personal property of such corporation or other person for the payment of the amount assessed, with the cost of executing the warrant, and to return such warrant to the commissioner of finance, and pay to the commissioner the money collected by virtue thereof within sixty days after the receipt of the warrant. If the commissioner of finance finds that the collection of the tax or other amount is in jeopardy, notice and demand for immediate payment of such tax may be made by the commissioner of finance and upon failure or refusal to pay such tax or other amount the commissioner of finance may issue a warrant without regard to the ten-day period provided in this subdivision.
4. Copy of warrant to be filed and lien to be created. Any sheriff or officer or employee who receives a warrant under subdivision three shall within five days thereafter file a copy with the clerk of the appropriate county. The clerk shall thereupon enter in the judgment docket, in the column for judgment debtors, the name of the taxpayer mentioned in the warrant, and in appropriate columns the tax or other amounts for which the warrant is issued and the date when such copy is filed; and such amount shall thereupon be a binding lien upon the real, personal and other property of the taxpayer.
5. Judgment. When a warrant has been filed with the county clerk the commissioner of finance shall, on behalf of the city, be deemed to have obtained judgment against the taxpayer for the tax or other amounts.
6. Execution. The sheriff or officer or employee shall thereupon proceed upon the judgment in all respects, with like effect, and in the same manner prescribed by law in respect to executions issued against property upon judgments of a court of record, and a sheriff shall be entitled to the same fees for his or her services in executing the warrant, to be collected in the same manner. An officer or employee of the department of finance may proceed in any county or counties of this state and shall have all the powers of execution conferred by law upon sheriffs, but shall be entitled to no fee or compensation in excess of actual expenses paid in connection with the execution of the warrant.
7. Foreign corporations. Where a notice and demand under subdivision two shall have been given to a foreign corporation or other person who is not then a resident, and it appears to the commissioner of finance that it is not practicable to find in the state property of such foreign corporation or nonresident person sufficient to pay the entire balance of tax or other amount owing by such foreign corporation or nonresidential person, the commissioner of finance may, in accordance with subdivision three, issue a warrant directed to an officer or employee of the department of finance, a copy of which warrant shall be mailed by certified or registered mail to such foreign corporation or nonresident person at its last known address, subject to the rules of mailing provided in subdivision one of section 11-672. Such warrant shall command the officer or employee to proceed in New York county, and he or she shall, within five days after receipt of the warrant, file the warrant and obtain a judgment in accordance with this section. Thereupon the commissioner of finance may authorize the institution of any action or proceeding to collect or enforce the judgment in any place and by any procedure that a civil judgment of the supreme court of the state of New York could be collected or enforced. The commissioner of finance may also, in his or her discretion, designate agents or retain counsel for the purpose of collecting, outside the state, any unpaid taxes, additions to tax, penalties or interest which have been assessed under this subchapter or under any of the named subchapters, against foreign corporations or other non-resident persons, may fix the compensation of such agents and counsel to be paid out of money appropriated or otherwise lawfully available for payment thereof, and may require of them bonds or other security for the faithful performance of their duties, in such form and in such amount as the commissioner of finance shall deem proper and sufficient.
8. Action by city for recovery of taxes. Action may be brought by the corporation counsel of the city at the instance of the commissioner of finance to recover the amount of any unpaid taxes, additions to tax, penalties or interest which have been assessed under this subchapter or under the named subchapters within six years prior to the date the action is commenced.
9. Release of lien or vacating warrant. The commissioner of finance, if he or she finds that the interests of the city will not thereby be jeopardized, and upon such conditions as the commissioner of finance may require, may release any property from the lien of any warrant or vacate such warrant for unpaid taxes, additions to tax, penalties and interest filed pursuant to subdivision four or seven of this section, and such release or vacating of the warrant may be recorded in the office of any recording officer in which such warrant has been filed. The clerk shall thereupon cancel and discharge as of the original date of docketing the vacated warrant.
10. Lien from due date of return.
(a) In addition to any other lien provided for in this section, each tax imposed by the named subchapters shall become a lien on the date on which the return is required to be filed (without regard to any extension of time for filing such return), except that such tax shall become a lien not later than the date the taxpayer ceases to be subject to the tax imposed by any of the named subchapters, or to do business in this state in a corporate or organized capacity. Each such tax shall be a lien and binding upon the real and personal property of the taxpayer, or of a transferee liable to pay the same, until the same is paid in full, except that no lien for any additional tax assessed pursuant to this subchapter shall be enforceable against property which prior to the issuance to the taxpayer of a notice of deficiency under section 11-672 of this subchapter had been transferred in good faith to a bona fide transferee for value. But the lien of each such tax shall be subject to the lien of any mortgage indebtedness existing against real property previous to the time when the tax became a lien and where such mortgage indebtedness has been incurred in good faith and was not given, directly or indirectly, to any officer or stockholder of the corporation owning such real property, whether as a purchase money mortgage or otherwise, and shall also be subject to the lien of local taxes and assessments, without regard to when the lien for such taxes and assessments may have accrued. If the return is filed and the tax shown on the report to be due is paid on or before the date on which the report is required to be filed, without regard to any extensions of time for filing such report, the lien shall not be enforceable against the interest of any purchaser or mortgagee in property which is thereafter, but prior to the issuance to the taxpayer of a notice of deficiency under section 11-672 of this subchapter transferred to a bona fide purchaser for value, or mortgaged where the mortgage indebtedness is incurred in good faith and the mortgage is not given, directly or indirectly, to any officer or stockholder of the corporation. In any action to foreclose any such mortgage, or to foreclose the lien of local taxes or assessments, to which the people of the state, or the city shall have been made a party defendant by reason of the existence of a lien for any such tax, or if no such tax was due or was a lien at the time of the commencement of such action and the filing of the notice of pendency thereof but such a tax becomes due or becomes a lien subsequent to the time of the commencement of such action and the filing of the notice of pendency thereof, such real property shall be sold and conveyed in such action free from any such tax lien, and any such tax lien may become a lien on any surplus moneys which may result from such sale, to be determined in the proceedings for the distribution of such surplus moneys. Where title to real property passes from an individual, or from a corporation owing no tax, to another corporation which is in default for such tax, the lien herein provided shall not be enforceable except as to any equity after the prior mortgage or purchase money mortgage encumbrance.
(b) The commissioner of finance may, upon application made to the commissioner and the payment of a fee of twenty-five dollars, release any real property from the lien under this subdivision, provided payment be made to the commissioner of finance of such a sum as the commissioner of finance shall deem adequate consideration for such release, or deposit be made of such security or such bond be filed as the commissioner of finance shall deem proper to secure payment of any such tax. The application for such release shall contain an accurate description of the property to be released together with such information as the commissioner of finance may require. Such release may be recorded in any office in which conveyances of real estate are entitled to be recorded.
(c) All taxes, additions to tax, penalties and interest which have become a lien under this subdivision shall cease to be a lien after the expiration of twenty years from the date they become due and payable, except that taxes, additions to tax, penalties and interest which have become a lien under this subdivision (1) as to real estate in the hands of persons who are owners thereof who would be purchasers in good faith but for such taxes, additions to tax, penalties or interest and (2) as to the lien on real estate of mortgages held by persons who would be holders thereof in good faith but for such taxes, additions to tax, penalties or interest, as against such purchasers or holders, shall cease to be a lien after the expiration of ten years from the date they become due and payable. The limitations herein provided for shall not apply to any transfer from a corporation to a person or corporation with intent to avoid payment of any taxes, or where with like intent the transfer is made to a grantee corporation, or any subsequent grantee corporation, controlled by such grantor or which has any community of interest with it, either through stock ownership or otherwise.
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