N.Y.
Tax Law Section 998
Petition to the surrogate’s court and appeal
(a)
General. A taxpayer shall have the right to protest a notice of deficiency or a notice of disallowance of a claim for refund issued by the commissioner of taxation and finance with respect to tax under this article as provided in this section. A proceeding under this section shall be a special proceeding under article four of the civil practice law and rules and shall be commenced by filing a notice of petition and verified petition with the surrogate’s court and service of such notice of petition and verified petition on the commissioner of taxation and finance or the commissioner’s attorney. In any county which has designated a transfer and estate clerk of the court, the filing of the notice of petition and verified petition with the surrogate’s court shall be effected by filing such notice of petition and verified petition with such clerk. The notice of petition, together with the petition and any affidavits specified in the notice, shall be so filed and served at least forty-five days before the time at which the petition is noticed to be heard. An answer and supporting affidavits, if any, shall be served at least ten days before such time. A reply, together with supporting affidavits, if any, shall be served at least five days before such time. No petition shall be denied without opportunity for a hearing of any issues of fact raised therein.(b)
Conciliation conferences. The provisions of subdivision three-a of § 170 (Department of taxation and finance)section one hundred seventy of this chapter regarding conciliation conferences in the bureau of conciliation and mediation services shall be applicable with respect to a notice of deficiency or disallowance of a refund of tax under this article provided, however, the references to “the division of tax appeals” shall be deemed to be references to “the surrogate’s court” for purposes of the tax under this article and references to filing a petition shall be deemed to be references to the commencement of a special proceeding under this section.(c)
Jurisdiction and venue. The surrogate’s court of every county having jurisdiction of the estate of a decedent under the provisions of sections two hundred five and two hundred six of the surrogate’s court procedure act shall have jurisdiction of proceedings under this section. Venue of such proceedings shall be as provided in such sections.(d)
Petition for review of a deficiency. Within ninety days, or one hundred fifty days if the notice is addressed to a person outside of the United States, after the mailing of the notice of deficiency of estate tax, the taxpayer may commence a special proceeding pursuant to this section in the surrogate’s court for review of the deficiency. Such petition may also assert a claim for refund of tax under this article, subject to the limitations of subsection (g) of § 687 (Limitations on credit or refund)section six hundred eighty-seven of this chapter, as made applicable to the tax imposed under this article by section nine hundred ninety.(e)
Petition for refund.(1)
A taxpayer may commence a special proceeding with the surrogate’s court under this section for the amounts asserted in a claim for refund if-- (A) the taxpayer has filed a timely claim for refund with the commissioner of taxation and finance, (B) the taxpayer has not previously commenced a special proceeding under subsection (d) regarding the tax imposed by this article with respect to the death of the same decedent unless the petition under this subsection relates to a separate claim for refund properly filed under subsection (f) of section six hundred eighty-seven, as made applicable to the tax imposed by this article by section nine hundred ninety, and (C) either (i) six months have expired since the claim was filed, or(ii)
the commissioner has mailed to the taxpayer, by registered or certified mail, a notice of disallowance of such claim in whole or in part.(2)
No special proceeding under this subsection 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 taxation and finance. If a taxpayer files a written waiver of the requirement that such taxpayer be mailed a notice of disallowance, the two year period prescribed by this paragraph for filing a petition for refund shall begin on the date such waiver is filed.(f)
Assertion of deficiency after filing petition.(1)
Petition for review of deficiency. If a taxpayer commences a special proceeding for review of a deficiency, the commissioner may assert and the surrogate’s court shall have power to determine a greater deficiency than asserted in the notice of deficiency and the commissioner may assert and the surrogate’s court shall have power to determine any addition to tax or penalty.(2)
Petition for refund. If the taxpayer commences a special proceeding for refund, the commissioner may assert and the surrogate’s court may determine: (A) a deficiency as to any amount of deficiency asserted within the period in which an assessment would be timely, or (B) deny so much of the amount for which refund is sought in the petition, as is offset by other issues pertaining to the taxpayer.(3)
Opportunity to respond. A taxpayer shall be given a reasonable opportunity to respond to any matters asserted by the commissioner under this subsection.(4)
Restriction on further notices of deficiency. If the taxpayer commences a special proceeding under this section, no notice of deficiency of estate tax may thereafter be issued to the taxpayer regarding the tax imposed by this article with respect to the death of the same decedent, except in case of fraud or with respect to a change or correction required to be reported under section nine hundred seventy-nine.(g)
Burden of proof. In any case before the surrogate’s court under this section, 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:(1)
whether the petitioner has been guilty of fraud with intent to evade tax;(2)
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;(3)
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 special proceeding commenced under this section, unless such increase in deficiency is the result of a change or correction required to be reported under section nine hundred seventy-nine, and of which change or correction the commissioner of taxation and finance had no notice at the time the commissioner mailed the notice of deficiency; and(4)
whether any person is liable for a penalty under subsection (k) or (r) of § 685 (Additions to tax and civil penalties)section six hundred eighty-five of this chapter, as made applicable to the tax imposed by this article by section nine hundred ninety.(h)
Review under this section exclusive. The review of a deficiency or denial of a refund provided by this section shall be the exclusive remedy available for the judicial review of the liability of the taxpayer for the taxes imposed by this article.(i)
Appeal; assessment pending appeal; appeal bond.(1)
The taxpayer or the commissioner of taxation and finance may appeal from a decree entered in a special proceeding pursuant to this section as provided in section two thousand seven hundred one of the surrogate’s court procedure act.(2)
Irrespective of any restrictions on the assessment and collection of deficiencies, the commissioner may assess a deficiency determined by the surrogate’s court after the expiration of the period during which a notice of appeal may be filed, notwithstanding that a notice of appeal has been filed by the taxpayer with respect to such deficiency, unless the taxpayer, at or before the time his notice of appeal is filed, has paid the deficiency, has deposited with the commissioner the amount of the deficiency, or has filed with the commissioner a bond or other security acceptable to the commissioner (which may be a jeopardy bond under subsection (h) of section six hundred ninety-four, as made applicable to the tax imposed by this article by section nine hundred ninety) in the amount of the portion of the deficiency (including interest and other amounts) in respect of which the appeal is made and all costs and charges which may accrue against the taxpayer in the prosecution of the proceeding, including costs of all appeals, 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 commissioner is paid after the filing of the review bond or other security, such bond or other security shall, at the request of the taxpayer, be proportionately reduced.(3)
If the amount of a deficiency determined by the commissioner is disallowed in whole or in part by the court, the amount so disallowed shall be credited or refunded to the taxpayer, without the making of a claim therefor, or, if payment has not been made, shall be abated.(j)
Date of finality of decree. A decree of the surrogate’s court shall become final upon the expiration of the time for filing a notice of appeal if no such notice is filed within such time, or if a notice of appeal has been duly filed, upon expiration of the time for all judicial review, or upon the entry of a decree of the surrogate’s court in accordance with the mandate of the court on appeal.
Source:
Section 998 — Petition to the surrogate's court and appeal, https://www.nysenate.gov/legislation/laws/TAX/998 (updated Sep. 22, 2014; accessed Oct. 26, 2024).
