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If a return required by the law is not filed, or if a return when filed is incorrect or insufficient, the Commissioner of Finance will determine the amount of tax due from such information as may be obtainable and, if necessary, may estimate the tax on the basis of external indices. Notice of such determination will be given to the person liable for the payment of the tax. Such determination will finally and irrevocably fix the tax unless the person against whom it is assessed, within thirty days after the giving of notice of such determination, shall apply in writing to the Commissioner of Finance for a hearing or unless the Commissioner of Finance of his own motion shall redetermine the tax. After such hearing the Commissioner will give notice of his determination to the person against whom the tax is assessed. The determination of the Commissioner of Finance shall be reviewable for error, illegality or unconstitutionality or any other reason whatsoever by a proceeding under Article 78 of the Civil Practice Law and Rules if application therefor is made to the Supreme Court within thirty days after the giving of the notice of such final determination. A proceeding under Article 78 of the Civil Practice Law and Rules shall not be instituted unless (a) the amount of any tax sought to be reviewed, with interest and penalties thereon, if any, shall be first deposited and there is filed an undertaking with the Commissioner of Finance issued by a surety company authorized to transact business in this State and approved by the Superintendent of Insurance of this State as to solvency and responsibility in such amount as a Justice of the Supreme Court shall approve to the effect that if such proceeding be dismissed or the tax confirmed the petitioner will pay all costs and charges which may accrue in the prosecution of the proceeding or (b) at the option of the petitioner such undertaking must be filed with the Commissioner of Finance in a sum sufficient to cover the taxes, penalties and interest stated in such determination plus the costs and charges which may accrue against it in the prosecution of the proceeding, in which event the petitioner shall not be required to pay such taxes, interest or penalties as a condition precedent to the application.
(a) The Commissioner of Finance shall refund or credit, without interest, any tax, penalty or interest erroneously, illegally or unconstitutionally collected or paid, provided:
(1) A written application for refund or credit was made to the Commissioner of Finance within one year from the payment of the tax, penalty or interest, and
(2) The application is made by the retail licensee or other person who actually paid the tax.
(b) No specific form has been prescribed for refund applications. An application for refund, however, shall be in writing and shall comply with the following requirements: (1) It must contain a verified statement setting forth the applicant's reasons for such requested refund.
(2) It must be signed by the applicant or his duly authorized agent. If signed by an agent, the application must be accompanied by a power of attorney acceptable to the Commissioner of Finance.
(3) It must demonstrate that the refund provisions of the law have been complied with.
(4) It must be accompanied by the cancelled check or a photostatic copy thereof, showing both the front and back of the check; or, if paid by cash or money order, by evidence of such payment.
(c) Where a retail licensee ceases to do business during the course of the tax year under circumstances which result in, or would entitle him to, a refund of a license fee by the New York State Liquor Authority, a refund, without interest, of an appropriate portion of the tax paid under the law will be granted, if, at the time the retail licensee ceases to do business as a retail licensee, at least one month of the tax year remains to run. Such refund shall be computed for the unexpired term of the tax year, for full months commencing with the first day of the month succeeding the one in which such retail licensee ceases to do business as a retail licensee, except that where such cessation of business occurs on the first day of the month that month shall be included in the computation; provided, however, where a refund of the tax or any portion thereof paid under the law is granted to the holder of a summer or winter license, such refund shall be computed for the unexpired months of the tax year for which summer or winter licenses may be issued under the New York State Alcoholic Beverage Control Law, for full months commencing with the first day of the month succeeding the one in which such summer or winter retail licensee ceases to do business as a retail licensee, except that where such cessation of business occurs on the first day of the month that month shall be included in the computation.
For example: A summer (liquor) retail licensee who obtained a license for the period from April 1, 1981 to October 31,1981 and paid the tax to the City as provided by the law and regulations, and who did not obtain a new license for the period from April 1, 1982 to October 31, 1982, and who meets the requirements of the refund provisions of the law and regulations, would be entitled to a refund on the basis of two-sevenths of the tax paid to the City, said fraction being the ratio that the unexpired term of the tax year (the two months of April and May 1982) bears to the seven months of the tax year (June 1, 1981 to October 31, 1981 and April 1, 1982 to May 31, 1982) for which summer licenses may be issued.
(d) In the case of an application for refund by a retail licensee who ceases to do business during the course of the tax year, under circumstances which result in, or would entitle him to, a refund of the license fee by the New York State Liquor Authority, the applicant shall submit a photostatic copy of the surrender receipt or refund check, executed and delivered to him by such liquor authority, with the application, or at any time thereafter but before the Commissioner of Finance makes any determination with respect to such application, together with such other information as the Commissioner may require. In the event that action on an applicant's right to a refund by the New York State Liquor Authority is pending before such authority but not concluded at the time the application for refund is filed with the Commissioner of Finance as herein provided, the applicant shall further state the status of his claim or right to refund before such authority, and thereupon, the Commissioner may hold in abeyance any action on such application until the said authority has finally acted thereon, provided, however, that in no event will a refund be granted where the applicant has failed to make written application therefor to the Commissioner within one year from the payment of the tax, penalty or interest. However, where a retail licensee is not entitled to a refund by the New York State Liquor Authority, merely because his license has expired or because he has ceased to do business less than one month before the expiration date of the license issued to him by the New York State Liquor Authority, the provisions of this subdivision (d) and of subdivision (c) shall not apply.
(e) Whenever a taxpayer files a claim for refund, such application shall constitute an application for revision of the tax, penalty or interest complained of. The Commissioner of Finance may audit the taxpayer's books and records or may grant the refund subject to future audit. The Commissioner of Finance may determine without resorting to an audit that, based upon the evidence presented, the claim is without merit and, therefore, deny it. The Commissioner of Finance will notify the taxpayer in writing of his determination. Such determination shall become final and irrevocable unless the person to whom it is addressed shall, within 30 days after the date thereof, apply to the Commissioner of Finance for a hearing.
(f) If the Commissioner of Finance approves the application for refund, he will make such refund or, in lieu thereof, allow credit therefor on payments due from the applicant.
(g) A taxpayer shall not be entitled to a refund or credit if he has had a hearing or an opportunity for a hearing in connection with a deficiency assessment as provided by law and by 19 RCNY § 25-07, or has failed to avail himself of the remedies provided thereby, if such refund or credit application is for taxes included in the same period covered by such deficiency assessment.
(a) Whenever any person shall fail to pay any tax or penalty or interest imposed by the law as therein provided, the Corporation Counsel shall, upon request of the Commissioner of Finance, bring or cause to be brought an action to enforce payment of the same against the person liable for the same on behalf of the City of New York in any court of the State of New York or of any other state or of the United States. If, however, the Commissioner of Finance in his discretion believes that a taxpayer subject to the law is about to cease business, leave the state, or remove or dissipate the assets out of which tax or penalties might be satisfied, and that any such tax or penalty will not be paid when due, he may declare such tax or penalty to be immediately due and payable and may issue a warrant immediately.
(b) As an additional or alternate remedy, the Commissioner of Finance may issue a warrant, directed to the City Sheriff commanding him to levy upon and sell the real and personal property of such person which may be found within the City, for payment of the amount thereof, with any penalties and interest, and the cost of executing the warrant, and to return such warrant to the Commissioner of Finance and to pay to him the money collected by virtue thereof within sixty days after the receipt of such warrant. The City Sheriff shall, within five days after the receipt of the warrant, file with the County Clerk a copy thereof, and thereupon such clerk shall enter in the judgment docket the name of the person mentioned in the warrant and the amount of the tax, penalties, and interest for which the warrant is issued and the date when such copy is filed. Thereupon the amount of such warrant so docketed shall become a lien upon the title to and interest in real and personal property of the person against whom the warrant is issued. The City Sheriff shall then proceed upon the warrant in the same manner and with like effect as that provided by law in respect to executions issued against property upon judgments of a court of record, and for services in executing the warrant he shall be entitled to the same fees which he may collect in the same manner. In the discretion of the Commissioner of Finance, a warrant of like terms, force and effect may be issued and directed to any officer or employee of the Department of Finance, and in the execution thereof such officer or employee shall have all the powers conferred by law upon sheriffs, but he shall be entitled to no fee or compensation in excess of the actual expenses paid in the performance of such duty. If a warrant is returned not satisfied in full, the Commissioner of Finance may from time to time issue new warrants and shall also have the same remedies to enforce the amount due thereunder as if the City has recovered judgment therefor and execution thereon has been returned unsatisfied.
The law provides that whenever there is made a sale, transfer or assignment in bulk of any part or the whole stock of merchandising or of fixtures, or merchandise and of fixtures pertaining to the conducting of the business of the seller, transferor or assignor, otherwise than in the ordinary course of trade and in the regular prosecution of said business, the purchaser, transferee or assignee shall at least ten days before taking possession of such merchandise, fixtures or merchandise and fixtures, or paying therefor, notify the Commissioner of Finance by registered mail of the proposed sale and of the price, terms and conditions thereof whether or not the seller, transferor or assignor, has represented to, or informed the purchaser, transferee or assignee that it owes any tax pursuant to said law and whether or not the purchaser, transferee or assignee has knowledge that such taxes are owing, and whether any such taxes are in fact owing. Whenever the purchaser, transferee or assignee shall fail to give notice to the Commissioner of Finance as required by the preceding paragraph, or whenever the Commissioner of Finance shall inform the purchaser, transferee or assignee that a possible claim for such tax or taxes exists, any sums of money, property or choses in action, or other consideration, which the purchaser, transferee or assignee is required to transfer over to the seller, transferor or assignor shall be subject to a first priority right and lien for any such taxes therefore or thereafter determined to be due from the seller, transferor or assignor to the City, and the purchaser, transferee or assignee is forbidden to transfer to the seller, transferor or assignor any such sums of money, property or choses in action to the extent of the amount of the City's claim. For failure to comply with the provisions of this subdivision, the purchaser, transferee or assignee, in addition to being subject to the liabilities and remedies imposed under the provisions of Article 6 of the Uniform Commercial Code, shall be personally liable for the payment to the City of any such taxes theretofore or thereafter determined to be due to the City from the seller, transferor or assignor, and such liability may be assessed and enforced in the same manner as the liability for tax under said law.
Every retail licensee must keep records of the date he commenced doing business as a retail licensee, the date of the issuance of a license to him by the State Liquor Authority under the New York State Alcoholic Beverage Control Law, the amount of license fees paid and/or payable for each license, and the period for which such license was issued. Every such retail licensee is also required to keep records of the date, if any, when he discontinued doing business, and of any refund received from the State Liquor Authority, together with the amount thereof and the date received. The Commissioner of Finance may require every retail licensee to keep such other records of his business and in such form as the Commissioner of Finance may from time to time require. Such records shall be offered for inspection and examination at any time upon demand by the Commissioner of Finance or his duly authorized agent or employee, and shall be preserved for a period of three years, except that the Commissioner of Finance may consent to their destruction within that period or may require that they may be kept longer.
Except in accordance with judicial order or as otherwise provided by law, it is unlawful for the Commissioner of Finance or any officer or employee of the Department of Finance to divulge or make known in any manner any information relating to the business of a taxpayer contained in any return required under the law. The officers charged with the custody of such returns are not required to produce any of them or evidence of anything contained in them in any action or proceeding in any court, except on behalf of the Commissioner of Finance in an action or proceeding under the provisions of the law, or on behalf of any party to any action or proceeding under the provisions of the law when the returns or facts shown thereby are directly involved in such action or proceeding, in either of which events the court may require the production of and may admit in evidence so much of the returns or of the facts shown thereby as are pertinent to the action or proceeding and no more. A taxpayer may obtain a certified copy of any return filed in connection with his tax upon application in writing to the Commissioner. Where a representative of a taxpayer applies for a certified copy of such return, he must file a power of attorney with the application. The Corporation Counsel or other legal representatives of the City or the District Attorney of any county within the City may be permitted to inspect the return of any taxpayer who shall bring action to set aside or review the tax based thereon, or against whom an action or proceeding under this title may be instituted. Nothing herein shall be construed to prohibit the publication of statistics so classified as to prevent the identification of particular returns or items thereof.
If any amount of tax is not paid on or before the last date prescribed for payment (without regard to any extension of time granted for payment), interest on such amount at the rate prescribed by the law and regulations of the Commissioner of Finance shall be paid for the period from such last date to the date of payment. In computing the amount of interest to be paid with respect to taxes which remain or become due on or after July 16, 1985, such interest shall be compounded daily. No interest shall be paid if the amount thereof is less than one dollar.
(a) Civil penalties. Any person failing to file a return or to pay over any tax due prior to February 24, 1983, within the time required by law shall be subject to a penalty of five per cent of the amount due. If the Commissioner of Finance is satisfied that the delay was excusable he may remit all or any part of such penalty. With respect to returns or payments which become due on or after February 24, 1983, the following penalties apply:
(1) Failure to file return.
(i) In case of failure to file a return 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 (see: paragraph (5) of this subdivision (a)) and not due to willful neglect, there is to be added to the amount required to be shown as tax on such return five percent (5%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate.
(ii) With respect to returns required to be filed on or after July 16, 1985, in the case of a failure to file a return of tax within 60 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 (i) of this paragraph shall not be less than the lesser of one hundred dollars ($100.) or one hundred percent (100%) of the amount required to be shown as tax on such return.
(iii) For purposes of subparagraphs (i) and (ii) of this paragraph (1), 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 on the return.
(2) Failure to pay tax shown on return. In case of failure to pay the amount shown as tax on a return to be filed 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 (see: paragraph (5) of this subdivision (a)) and not due to willful neglect, there shall be added to the amount shown as tax on such return one-half of one percent (1/2%) of the amount of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) 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 on 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.
(3) 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 which is not so shown (including a determination made pursuant to 19 RCNY § 25-07), within ten (10) days of the date of notice and demand, unless it is shown that such failure is due to reasonable cause (see: paragraph (5) of this subdivision (a)) 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 (1/2%) of such tax for each month or fraction thereof during which such failure continues, not exceeding twenty-five percent (25%) 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.
(4) Limitations on additions.
(i) With respect to any return the amount of the addition to tax is limited to the following
(A) At no time will the addition for one (1) month be more than five percent (5%).
(B) If paragraphs (1) and (2) of this subdivision (a) are both applicable, the addition under paragraph (1) is reduced by the addition under paragraph (2). Thus, the addition to tax will be four and one-half percent (4 1/2%) under paragraph (1) and one-half of one percent (1/2%) under paragraph (2) for each month up to and including the first five (5) months. After the first five (5) months, the addition of one-half of one percent (l/2%) per month pursuant to paragraph (2) will apply for the next forty-five (45) months for a maximum aggregate of forty-seven and one-half percent (47 1/2%) addition to tax. However, in any case described in subparagraph (ii) of paragraph (1) of this subdivision (relating to returns filed after 60 days of the due date) the amount of the addition to tax under such paragraph (1) shall not be reduced below the amount provided in such subparagraph (i.e. the lesser of $100 or 100% of the tax due).
(C) If paragraphs (1) and (3) of this subdivision are both applicable, the maximum amount of the addition to tax may not exceed twenty-five percent (25%) in the aggregate. The maximum amount of the addition to tax pursuant to paragraph (3) of this subdivision shall be reduced by the amount of the addition to tax pursuant to paragraph (1) of this subdivision (determined without regard to subparagraph (ii) of such paragraph (1)) which is attributable to the tax for which the notice and demand is made and which is not paid within ten (10) days of such notice and demand.
(ii) The provisions of this paragraph may be illustrated by the following examples:
Example A(a): Assume the taxpayer filed his tax return for the tax year beginning June 1, 1983 (due June 25, 1983) on September 30, 1983, and the failure to file on or before the prescribed date is not due to reasonable cause. The tax shown on the return is $800 and a deficiency of $200 is subsequently assessed, making the tax required to be shown on the return, $1,000. The amount shown due on the return of $800 is paid on October 31, 1983. The failure to pay on or before the prescribed date is not due to reasonable cause. There will be imposed, in addition to interest, an additional amount under paragraph (2), of $20.00, which is 2.5 percent (2% for the 4 months from June 26 through October 25, and 0.5% for the fractional part of the month from October 26 through October 31) of the amount shown due on the return of $800. There will also be imposed an additional amount under paragraph (1) of $184, determined as follows:
20 percent (5% per month for the 3 months from June 26 through September 25 and 5% for the fractional part of the month from September 26 through September 30) of the amount due of $1,000 required to be shown on the return | $200 |
Reduced by the amount of the addition imposed under paragraph (2) for those months | $16 |
Addition to tax under paragraph (1) | $184 |
Example A(b): A notice and demand for the $200 deficiency is issued on January 8, 1984, but the taxpayer does not pay the deficiency until December 23, 1984. In addition to interest there will be imposed an additional amount under paragraph (3) of $10, determined as follows:
Addition computed without regard to limitation: 6 percent (5 1/2% for the 11 months from January 19, 1984, through December 18, 1984, and 0.5% for the fractional part of the month from December 19 through December 23)of the amount stated in the notice and demand ($200) | $12 |
Limitation on addition: 25 percent of the amount stated in the notice and demand ($200) | $50 |
Reduced by the part of the addition under paragraph (1) for failure to file attributable to the $200 deficiency (20% of $200) | $40 |
Maximum amount of the addition under paragraph (3) | $10 |
Example B: A taxpayer files his tax return for the tax year beginning June 1, 1983, on February 14, 1984, and such delinquency is not due to reasonable cause. The balance due, as shown on the return, of $500 is paid when the return is filed on February 14, 1984. In addition to interest and the addition for failure to pay under paragraph (2) of $20 (8 months at 0.5% per month, 4%), there will also be imposed an additional amount under paragraph (1) of $112.50, determined as follows:
Penalty at 5% for maximum of 5 months, 25% of $500 | $125.00 |
Less reduction for the amount of the addition under paragraph (2): | |
Amount imposed under paragraph (2) for failure to pay for the months in which there is also an addition for failure to file – 2 1/2 percent for the 5 months June 26 through November 29 of the net amount due ($500) | $12.50 |
Addition to tax under paragraph (1) | $112.50 |
(5) Reasonable cause as used in paragraphs (1), (2) and (3) must be affirmatively shown in a written statement. The taxpayer's previous compliance record may be taken into account. Grounds for reasonable cause, where clearly established, may include the following:
(i) death or serious illness of the responsible officer or employee of the taxpayer, or his unavoidable absence from his usual place of business;
(ii) destruction of the taxpayer's place of business or business records by fire or other casualty;
(iii) timely prepared reports misplaced by a responsible employee and discovered after the due date;
(iv) inability to obtain and assemble essential information required for the preparation of a complete return despite reasonable efforts;
(v) any other cause or delinquency which appears to a person of ordinary prudence and intelligence as a reasonable cause for delay in filing a return and which clearly indicates an absence of gross negligence or willful intent to disobey the taxing statutes. Past performance should be taken into account. Ignorance of the law, however, will not be considered reasonable cause.
(6) Underpayment due to negligence.
(i) If any part of an underpayment is due to negligence or intentional disregard of the law or rules or regulations thereunder (but without intent to defraud), there shall be added to the tax a penalty in an amount equal to five percent (5%) of the underpayment.
(ii) With respect to taxes required to be paid on or after July 16, 1985, there shall be added to the tax (in addition to the amount determined under subparagraph (i) of this paragraph) an amount equal to fifty percent of the interest payable under 19 RCNY § 25-13 with respect to the portion of the underpayment described in such subparagraph (i) which is attributable to the negligence or intentional disregard referred to in such subparagraph (i), for the period beginning on the last date prescribed by law for payment of such underpayment (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).
(7) Underpayment due to fraud.
(i) If any part of an underpayment is due to fraud, there shall be added to the tax a penalty in an amount equal to fifty percent (50%) of the underpayment.
(ii) With respect to taxes required to be paid on or after July 16, 1985, there shall be added to the tax (in addition to the penalty determined under subparagraph (i) of this paragraph) an amount equal to fifty percent of the interest payable under 19 RCNY § 25-13 with respect to the portion of the underpayment described in such subparagraph (i) which is attributable to fraud, for the period beginning on the last day prescribed by law for payment of such underpayment (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).
(iii) The penalty under this paragraph (paragraph 7) shall be in lieu of the maximum twenty-five percent (25%) penalty due to willful neglect for failure to file a return, (paragraph (1)), the additional one-half of one percent (1/2%) per month for failure to pay tax shown on a return (paragraph (2)), the additional one-half of one percent (1/2%) per month for failure to pay tax required to be shown on a return (paragraph (3)), and the five percent (5%) penalty due to negligence (paragraph (6)).
(8) Any person who fails to pay tax, or to make, render, sign or certify any return, or to supply any information within the required time, with fraudulent intent, shall be liable for a penalty of not more than one thousand dollars ($1,000), in addition to any other amounts required under the law to be imposed, assessed and collected by the Commissioner of Finance. The Commissioner of Finance has the power, in his discretion, to waive, reduce or compromise any penalty under this paragraph.
(9) The additions to tax and penalties provided by this subdivision shall be paid and enforced in the same manner as taxes.
(10) Whenever a penalty is assessed for failure to pay the tax when due, an application for the remission thereof may be made to the Commissioner of Finance. Such application must be made by the person against whom the penalty is assessed, and must set forth the grounds upon which the remission is requested.
(b) Criminal penalties.
(1) Failure to obey subpoena; false testimony.
(i) Any person who, being duly subpoenaed in connection with a matter arising under the law, to attend as a witness or to produce books, accounts, records, memoranda, documents or other papers,
(A) fails or refuses to attend without lawful excuse,
(B) refuses to be sworn,
(C) refuses to answer any material and proper question, or
(D) refuses, after reasonable notice, to produce books, papers and documents in his possession or under his control which constitute material and proper evidence shall be guilty of a misdemeanor.
(ii) Any person who shall testify falsely in any material matter pending before the Commissioner of Finance shall be guilty of and punishable for perjury.
(2) Willful failure to file a return or report or pay tax. Any person required to pay any tax or make any return or report, who willfully fails to pay such tax or make such return or report, at the time or times so required, shall be guilty of a misdemeanor.
(3) Fraudulent returns, reports, statements or other documents.
(i) Any person who willfully makes and subscribes any return, report, statement or other document which is required to be filed with or furnished to the Commissioner of Finance or to any person, pursuant to the provisions of the law, which he does not believe to be true and correct as to every material matter shall be guilty of a misdemeanor.
(ii) Any person who willfully delivers or discloses to the Commissioner of Finance or to any person, pursuant to the provisions of the law, any list, return, report, account, statement or other document known by him to be fraudulent or to be false as to any material matter shall be guilty of a misdemeanor.
(iii) For purposes of this paragraph, the omission by any person of any material matter with intent to deceive shall constitute the delivery or disclosure of a document known by him to be fraudulent or to be false as to any material matter.
(4) Failure to keep records. Any person who willfully fails to keep or retain any records required to be kept or retained by the law shall be guilty of a misdemeanor.
(5) Commissioner's Certificate. The certificate of the Commissioner of Finance to the effect that a tax has not been paid, that a return has not been filed, that information has not been supplied or that records have not been retained shall be prima facie evidence thereof.
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