Section 11-521. Notice of deficiency

(a) General. If upon examination of a
  taxpayer's  return  under  this  chapter  the  commissioner  of  finance
  determines  that  there  is a deficiency of income tax, the commissioner
  may mail a notice of deficiency to the taxpayer. If a taxpayer fails  to
  file  a  return required under this chapter, the commissioner of finance
  is authorized to estimate the taxpayer's  city  unincorporated  business
  taxable   income   and   tax   thereon,  from  any  information  in  the
  commissioner's possession, and to mail a notice  of  deficiency  to  the
  taxpayer.  A  notice  of  deficiency  shall  be  mailed  by certified or
  registered mail to the taxpayer at his or her last known address  in  or
  out  of  the  city.  If  the  taxpayer  is  deceased  or  under  a legal
  disability, a notice of deficiency may be mailed  to  his  or  her  last
  known  address in or out of the city, unless the commissioner of finance
  has received notice of the existence of a  fiduciary  relationship  with
  respect to the taxpayer.
    (b)  Notice  of  deficiency  as assessment. After ninety days from the
  mailing of a notice of deficiency 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, such notice shall  be
  an  assessment of the amount of tax specified therein, together with the
  interest, additions to tax and penalties stated in such  notice,  except
  only  for  any  such  tax  or other amounts as to which the taxpayer has
  within such ninety day period filed with  the  tax  appeals  tribunal  a
  petition  under  section  11-529  of  this  chapter.  If  the  notice of
  deficiency or conciliation decision is addressed to a person outside  of
  the  United  States, such period shall be one hundred fifty days instead
  of ninety days.
    (c) Restrictions on assessment and levy. No assessment of a deficiency
  in tax and no levy or proceeding in court for its  collection  shall  be
  made,  begun  or  prosecuted,  except  as  otherwise provided in section
  11-534 of this chapter, until a notice of deficiency has been mailed  to
  the taxpayer, nor until the expiration of the time for filing a petition
  with the tax appeals tribunal contesting such notice, nor, if a petition
  with  respect  to  the  taxable  year  has  been  both  served  upon the
  commissioner of finance and filed with the tax appeals  tribunal,  until
  the decision of the tax appeals tribunal has become final. For exception
  in  the  case  of  judicial  review  of  the decision of the tax appeals
  tribunal, see subdivision (c) of section 11-530 of this chapter.
    (d) Exceptions  for  mathematical  errors.  If  a  mathematical  error
  appears  on  a  return (including an overstatement of the amount paid as
  estimated tax), the commissioner of finance shall  notify  the  taxpayer
  that  an  amount  of tax in excess of that shown upon the return is due,
  and that such excess has been assessed.
    Such notice shall not be considered as a notice of deficiency for  the
  purposes  of  this  section,  subdivision  (f) of section 11-527 of this
  chapter (limiting credits or refunds after petition to the  tax  appeals
  tribunal),  or  subdivision  (b)  of  section  11-529  of  this  chapter
  (authorizing the filing of a petition  with  the  tax  appeals  tribunal
  based on a notice of deficiency) nor shall such assessment or collection
  be prohibited by the provisions of subdivision (c) of this section.
    (e) Exception where change in federal or New York state taxable income
  is not reported.
    (1)  If  the  taxpayer  fails  to  comply  with section 11-519 of this
  chapter in not reporting a change or correction increasing or decreasing
  the taxpayer's federal or New York state taxable income as  reported  on

  the  taxpayer's  federal  or New York state return or in not reporting a
  change or correction which is treated in the same manner as if it were a
  deficiency for federal or New York state income tax purposes or  in  not
  filing  an  amended return or in not reporting the execution of a notice
  of waiver described in such section, instead of the  mode  and  time  of
  assessment  provided  for  in  subdivision  (b)  of  this  section,  the
  commissioner of finance may assess a deficiency based upon such  changed
  or  corrected federal or New York state taxable income by mailing to the
  taxpayer a notice of additional tax due specifying  the  amount  of  the
  deficiency,  and  such deficiency, together with the interest, additions
  to tax and penalties stated in such notice, shall be deemed assessed  on
  the  date  such  notice  is  mailed  unless within thirty days after the
  mailing of such notice a report of the federal or New York state  change
  or  correction  or  an amended return, where such return was required by
  section 11-519 of this chapter, is  filed  accompanied  by  a  statement
  showing  wherein  such  federal or New York state determination and such
  notice of additional tax due are erroneous.
    (2) Such notice shall not be considered as a notice of deficiency  for
  the  purposes of this section, subdivision (f) of section 11-527 of this
  chapter (limiting credits or refunds after petition to the  tax  appeals
  tribunal),  or  subdivision  (b)  of  section  11-529  of  this  chapter
  (authorizing the filing of a petition  with  the  tax  appeals  tribunal
  based  on  a  notice  of  deficiency),  nor  shall  such  assessment  or
  collection thereof be prohibited by the provisions of subdivision (c) of
  this section.
    (3) If the taxpayer is deceased or under a legal disability, a  notice
  of  additional tax due may be mailed to his or her last known address in
  or out of the city, unless the  commissioner  of  finance  has  received
  notice  of the existence of a fiduciary relationship with respect to the
  taxpayer.
    (f) Waiver of restrictions. The taxpayer shall at any time (whether or
  not a notice of deficiency has been issued) have the right to waive  the
  restrictions  on  assessment  and collection of the whole or any part of
  the deficiency by a signed notice in writing filed with the commissioner
  of finance.
    (g) Deficiency defined. For purposes of  this  chapter,  a  deficiency
  means the amount of the tax imposed by this chapter, less (i) the amount
  shown as the tax upon the taxpayer's return (whether the return was made
  or  the tax computed by the taxpayer or by the commissioner of finance),
  and less, (ii) the amounts previously  assessed  (or  collected  without
  assessment)  as  a  deficiency and plus (iii) the amount of any rebates.
  For the purpose of this definition, the tax imposed by this chapter  and
  the  tax  shown on the return shall both be determined without regard to
  payments on account of estimated tax; and a rebate means so much  of  an
  abatement,  credit, refund or other repayment (whether or not erroneous)
  made on the ground that the amounts entering into the  definition  of  a
  deficiency showed a balance in favor of the taxpayer.
    (h) Exception where change or correction of sales and compensating use
  tax  liability  is  not reported. (1) If a taxpayer fails to comply with
  section 11-519.1 of this chapter in not reporting a change or correction
  of his or her sales and compensating use tax liability or in not  filing
  a  copy  of an amended return or report relating to his or her sales and
  compensating use  tax  liability,  instead  of  the  mode  and  time  of
  assessment  provided  for  in  subdivision  (b)  of  this  section,  the
  commissioner of finance may assess a deficiency based upon such  changed
  or  corrected  sales and compensating use tax liability, as same relates
  to credits claimed under this chapter  by  mailing  to  the  taxpayer  a
  notice  of  additional  tax due specifying the amount of the deficiency,

  and such deficiency, together with the interest, additions  to  tax  and
  penalties  stated  in  such notice, shall be deemed assessed on the date
  such notice is mailed unless within thirty days  after  the  mailing  of
  such  notice  a report of the state change or correction or a copy of an
  amended return or report,  where  such  copy  was  required  by  section
  11-519.1  of  this  chapter, is filed accompanied by a statement showing
  where such state determination and such notice of additional tax due are
  erroneous.
    (2) Such notice shall not be considered as a notice of deficiency  for
  the  purposes of this section, subdivision (f) of section 11-527 of this
  chapter (limiting credits or refunds after petition to the  tax  appeals
  tribunal),  or  subdivision  (b)  of  section  11-529  of  this  chapter
  (authorizing the filing of a petition  with  the  tax  appeals  tribunal
  based  on  a  notice  of  deficiency),  nor shall such assessment or the
  collection thereof be prohibited by the provisions of subdivision (c) of
  this section.
    (3) If the taxpayer is deceased or under a legal disability, a  notice
  of  additional tax due may be mailed to his or her last known address in
  or out of the city, and such notice shall be sufficient for purposes  of
  this  chapter. If the commissioner of finance has received notice that a
  person is acting for the taxpayer in a fiduciary  capacity,  a  copy  of
  such notice shall also be mailed to the fiduciary named in such notice.