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Department of Taxation and Finance

New York State Taxpayer Bill of Rights

Part 1: Taxpayers’ Rights

Tax Law Section 3000: Short Title

This article may be cited as the taxpayers' bill of rights.


Tax Law Section 3002: Application

For the purposes of this article:

  1. Except as otherwise provided, the provisions of this article shall apply to any tax which is administered by the commissioner of taxation and finance (hereinafter the commissioner) and which is imposed by or authorized to be imposed pursuant to this chapter, article two-E of the general city law or section 27-0923 of the environmental conservation law. Any reference to tax or taxes in such sections shall include special assessments, fees and other impositions which are administered by the commissioner.
  2. The  term "taxpayer" includes an individual, partnership, limited liability company, association, society, company, corporation, estate, trust, trustee, receiver, liquidator, fiduciary or other entity, whether appointed by a court or otherwise, liable for any tax imposed under or pursuant to the authority of the laws described in  subdivision (a) of this section or under a duty to perform an act for itself or for another under or pursuant to the authority of such laws.
  3. Except to the extent explicitly provided by any such sections, the failure  of the commissioner or an officer or employee of the department to comply with a provision of such sections shall neither excuse any taxpayer from  payment of any taxes shown to be owed by the taxpayer or excuse any taxpayer from compliance with any other duty imposed under or pursuant to the authority of the laws described in subdivision (a)  of this section, nor  cure  any procedural defect in an administrative or judicial proceeding or case involving such taxpayer with respect to such taxes shown to be owed or compliance with any such duty.
  4. The provisions of this article shall also apply to all private contractors, subcontractors, and employees thereof, under contract with the department for collection of outstanding tax liability.
         

Tax Law Section 3003: Content of tax due, deficiency, and other notices

Any first letter of proposed deficiency or determination (commonly called a thirty day  letter)  issued by the commissioner, and any notice and demand, notice of deficiency or notice of determination which is issued by the commissioner,  which  is  manually initiated and which is the first such letter or notice issued to the taxpayer  with  respect to the subject matter of such notice, shall describe the basis for (such as the statutory or regulatory law, or  judicial or tax appeals tribunal decision), and identify the amounts (if any) of the tax due. An inadequate description under this section shall not invalidate such letter or notice.


Tax Law Section 3004: Disclosure of rights of taxpayers

  1. The commissioner shall, as soon as practicable, but not later than one hundred eighty days after the effective date of this article, prepare a statement which sets forth in simple and nontechnical terms:
    1. the rights of a taxpayer and the obligations of the division of taxation of the department of taxation and finance during an audit;
    2. the procedures by which a taxpayer may appeal or seek review of any adverse decision of the department, including administrative and judicial appeals;
    3. the procedure for filing and processing refund claims and filing of taxpayer complaints;
    4. the procedures which the department may use in enforcing taxes.
  2. The commissioner shall transmit drafts of the statement required under subdivision (a) of this section, or proposed revision of any such statement, to the chairpersons of the senate finance committee and the assembly ways and means committee and to the director of the division of the budget on the same day.
  3. The statements prepared in accordance with this section shall be distributed by the commissioner to all taxpayers the commissioner contacts (other than by providing tax forms) with respect to the determination or collection of any tax, the cancellation, revocation or suspension of a license, permit or registration or the denial of an application for a license, permit or registration. The commissioner shall take such actions as the commissioner deems necessary to assure that such distribution does not result in multiple statements being sent to any one taxpayer.


Tax Law Section 3004-A: Disclosure of overpayment to taxpayer

  1. The department shall disclose to a taxpayer all instances of overpayment of tax by such taxpayer discovered by the department during the course of an audit, assessment, collection or enforcement proceeding.
  2. The time within which a taxpayer may apply for a refund or claim a credit for an overpayment of tax disclosed pursuant to this section shall be one hundred twenty days from the date that notice of disclosure is given to such taxpayer by the department.  Failure to apply for a refund or credit within the one hundred twenty days shall result in the loss of the right to apply for a refund or credit. Provided, that this subdivision shall not reduce the time within which a taxpayer may claim a credit or refund of an overpayment of tax pursuant to any other provision of this chapter or any other applicable law.
  3. Nothing in this section shall be construed as requiring or permitting the giving of notice or the payment of a refund or granting of a credit with respect to a period which, at the time such overpayment is discovered by the department, is not open for assessment or refund by virtue of any period of limitations provided for in any tax.


Tax Law Section 3005: Requirements of certain department letters, notices and documents

The division of taxation or the division of tax appeals, as the case may be, shall include a return address in every (a) letter to a taxpayer regarding the taxpayer’s liability for tax, (b) notice which gives a person the right to a hearing under any tax, (c) billing or collection document and (d) administrative law judge determination and tribunal decision, to which the taxpayer may write with questions regarding the letter, notice, document, determination or decision.  Such notices and documents described in subdivisions (b) and (c) of this section shall also include a telephone number which the taxpayer may call with questions regarding the notice or document. Such address or telephone number may be within the division of taxation or the division of tax appeals, or within another appropriate state or other agency, and may be included in the letter, notice, document, determination or decision, or on a separate, accompanying document. Nothing in this section shall be construed to prevent either such division from including an address or telephone number in other letters, notices or documents sent to taxpayers or other persons.


Tax Law Section 3006: Procedures involving taxpayer interviews

  1. Recording of interviews.
    1. Recording by taxpayer. Any officer or employee of the division  of taxation  in  connection  with any in-person interview with any taxpayer relating to the determination or collection of any tax, the cancellation, revocation or suspension of a license, permit or registration or the denial of an application for a  license, permit or registration shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the  taxpayer's own expense and with the taxpayer's own equipment.
    2. Recording by division of taxation officer or employee. An officer or employee of the division of taxation may record any interview described in paragraph one of this subdivision if such officer or employee:
      1. provides advance notice of such recording to the taxpayer, and
      2. upon request of the taxpayer, provides the taxpayer with a transcript or copy of such recording, but only if the taxpayer provides reimbursement for the actual cost of the transcription and reproduction of such transcript or copy.
  2. Safeguards.
    1. Explanation of processes. An officer or employee of the division of taxation shall before or at an initial interview provide to the taxpayer:
      1. in the case of an in-person interview with the taxpayer relating to the determination of any tax, an explanation of the audit process and the taxpayer's rights under such process, or
      2. in the case of an in-person interview with the taxpayer relating to the collection of any tax, an explanation of the collection process and the taxpayer's rights under such process,
      3. in the case of an in-person interview with the taxpayer relating to the cancellation, revocation or suspension of a license, permit or registration or the denial of an application for a license, permit or registration, an explanation of the administrative hearing and judicial review processes and the taxpayer's rights under such processes.
    2. Right of consultation.  If the taxpayer clearly states to an officer or employee of the division of taxation at any time during the interview (other than an interview initiated by a subpoena to examine and inspect witnesses or books, records or other papers) that the taxpayer wishes to consult with an attorney, certified public accountant, enrolled agent, or any other person permitted to represent the taxpayer, such officer or employee shall suspend such interview regardless of whether the  taxpayer may have answered one or more questions.
  3. Representatives holding power of attorney.  Any attorney, certified public accountant, an enrolled agent, or any other person permitted to represent the taxpayer who is not disbarred or suspended from practice and who has a written power of attorney executed by the taxpayer, may be authorized by such taxpayer to represent the taxpayer in any interview described in subdivision (a) of this section. An officer or employee of the division may not require a taxpayer to accompany the representative in the absence of a subpoena to examine and inspect the taxpayer or the taxpayer's books, records or other papers. Such an officer or employee, with the consent of the immediate supervisor of such officer or employee, may notify the taxpayer directly that such officer or employee believes such representative is responsible for unreasonable delay or hindrance of a division of taxation examination or investigation of the taxpayer.
  4. Section not to apply to certain investigations. This section shall not apply to criminal investigations or investigations relating to the integrity of any officer or employee of the division of taxation.
  5. For purposes of this section, any reference to tax shall also include any associated penalty, addition to tax or interest imposed under or pursuant to the authority of any tax.


Tax Law Section 3008: Abatement of certain interest, penalties and additions to tax

  1. Interest attributable to unreasonable errors and delays by the department.
    1. In the case of any assessment or final determination of interest on:
      1. any deficiency or any tax finally determined to be due attributable in whole or in part to any unreasonable error or delay by an officer or employee of the department (acting in his or her official capacity) in performing a ministerial or managerial act, or
      2. any payment of any tax to the extent that any unreasonable error or delay in such payment is attributable to such officer or employee being erroneous or dilatory in performing a ministerial or managerial act, the commissioner may abate the assessment or final determination of all or any part of such interest for any period
    2. For purposes of paragraph one of this subdivision, an unreasonable error or delay shall be taken into account only if no significant aspect of such unreasonable error or delay can be attributed to the taxpayer involved, and after the department has contacted the taxpayer in writing with respect to such deficiency, tax finally determined to be due or payment.  The commissioner shall determine what constitutes timely performance of various ministerial or managerial acts performed under or pursuant to the authority of this chapter, the general city law and section 27-0923 of the environmental conservation law. Any regulations adopted with respect to other provisions of this subdivision shall conform, to the extent practicable, with corresponding federal regulations under the comparable provisions of the laws of the United States.  Administrative and judicial review of abatements under this subdivision shall be limited to review of whether failure to abate would be widely perceived as grossly unfair.
  2. Abatement of any penalty or addition to tax or excess interest attributable to erroneous written advice by the department of taxation and finance.
    1. The commissioner shall abate any portion of any penalty or addition to tax or excess interest attributable to erroneous advice furnished to the taxpayer in writing by an officer or employee of the department of taxation and finance, acting in such officer's or employee's official capacity.
    2. Paragraph one of this subdivision shall apply only if:
      1. the written advice was reasonably relied upon by the taxpayer and was in response to specific written request of the taxpayer, and
      2. the portion of the penalty or addition to tax or excess interest did not result from a failure by the taxpayer to provide adequate or accurate information
    3. This subdivision shall not be construed to require the department to provide written advice to taxpayers or other persons or entities.
  3. Assessments attributable to certain mathematical errors by the department.  In  the case of  an  assessment of any tax imposed by or pursuant to the authority of article twenty-two, thirty, thirty-A or thirty-B of this chapter or article two-E of the general city law attributable in whole or in part to a mathematical error described  in subparagraph (A) of paragraph two of subsection (g) of section sixty-two hundred thirteen of the federal internal revenue code, if the return was prepared by an officer or employee of the department acting in his or her official  capacity to provide assistance to taxpayers in the preparation of income tax returns, the commissioner is authorized to abate the assessment of all or any part of any interest on such deficiency for any period ending on or before the tenth day following the date of notice and demand by the commissioner for payment of the deficiency.
  4. Interest attributable to misappropriation of taxpayer payments.
    1. The commissioner shall be authorized to abate, for the period specified in paragraph two of this subdivision, any assessment or final determination of interest attributable to the misappropriation of a taxpayer's payment if:
      1. The taxpayer timely tenders payment to the department for a liability incurred under any tax, and the taxpayer's account with the department is not properly credited with such payment due to misappropriation thereof;
      2. The taxpayer does not cause, or in any way contribute to, the misappropriation of such payment; and
      3. The taxpayer tenders a replacement payment to the department in the original amount of such tax due no later than one year from the date of mailing of notice from the department of failure to pay
    2. The commissioner shall be authorized to abate any assessment or final determination of interest pursuant to this subdivision for some or all of the period from the date of the underpayment to (A) the date which is one year from the date of mailing of the department's notice of failure to pay, (B) the date which is one year from the date the taxpayer discovers that the payment was not properly credited to the taxpayer's account or (C) thirty days from the date the taxpayer recovers use of the misappropriated funds, whichever is earliest.
    3. For purposes of this subdivision, the term "misappropriation" means circumstances in which a person wrongfully intercepts a taxpayer's payment tendered to the department prior to the department crediting the taxpayer's account, and obtains use of the taxpayer's funds.


Tax Law Section 3010: Agreements for payments of tax liability in installments

  1. Authorization of agreements.
    The commissioner is authorized to enter into written agreements with any taxpayer under which such taxpayer is allowed to satisfy liability for payment of any tax (including any interest, penalty or addition to tax) in installment payments if the commissioner determines that such agreement will facilitate collection of such liability.
  2. Extent to which agreements remain in effect.
    1. Except as otherwise provided in this subdivision, any agreement entered into by the commissioner under subdivision (a) of this section shall remain in effect for the term of the agreement.
    2. The commissioner may terminate any agreement entered into by the commissioner under subdivision (a) of this section if:
      1. information which the taxpayer provided to the commissioner prior to the date such agreement was entered into was inaccurate or incomplete, or
      2. the commissioner believes that collection of any liability to which an agreement under this section relates is in jeopardy.
    3. If the commissioner finds that the financial condition of a taxpayer with whom the commissioner has entered into an agreement under subdivision (a) of this section has significantly changed, the commissioner may alter, modify, or terminate such agreement.
    4. The commissioner may alter, modify, or terminate an agreement entered into by the commissioner under subdivision (a) of this section in the case of the failure of the taxpayer:
      1. to pay any installment at the time such installment is due under such agreement,
      2. to pay any other tax liability at the time such liability is due, or
      3. to provide a financial condition update as requested by the commissioner.
    5. The commissioner may not take any action under paragraph two, three or four of this subdivision unless:
      1. a notice of such action is provided to the taxpayer not later than thirty days prior to such action, and
      2. such notice includes an explanation why the commissioner intends to take such action.

        The preceding sentence shall not apply in any case in which the commissioner believes that collection of any tax to which an agreement under this section relates is in jeopardy.
  3. Nothing in this section should be construed to prevent a taxpayer from prepaying in whole or in part any outstanding liability under any agreement the taxpayer enters into with the commissioner.


Tax Law Section 3012: Basis for evaluation of department employees

  1. The department shall not use records of tax enforcement results:
    1. As the primary criterion to evaluate officers or employees directly involved in collection activities and their immediate supervisors, or
    2. to impose or suggest production quotas or goals with respect to officers or employees described in this subdivision.
  2. Provided, however, forecasts of enforcement results may be made and communicated for planning purposes; tax enforcement results may be accumulated, tabulated, published and used for management and control of tax administration  resources so long as tax enforcement results tabulations are not used as the primary criterion to evaluate an officer or employee described in subdivision (a) of this section or to impose or suggest production quotas or goals; in the discharge of a manager's responsibilities, but subject to the provisions of paragraph one of subdivision (a) of this section, a manager may raise questions with an officer or employee about the number of cases the officer or employee has processed, the amount of time the officer or employee has been spending on the individual cases, or the kind of results the officer or employee has been obtaining.


* Tax Law Section 3013: Method of payment of personal income tax refunds; notice

  1. Notwithstanding the adoption by the commissioner of any prepaid debit card or direct deposit program for payment of personal income tax refunds, all taxpayers are entitled:
    1. to receive personal income tax refunds by paper check; and
    2. to opt out of any prepaid debit card or direct deposit program for payment of tax refunds.
  2. The department shall provide taxpayers with a clear written statement setting forth the taxpayer's right:
    1. to receive tax refund payments by paper check; and
    2. to opt out of any prepaid debit card or direct deposit program.
  3. In the event that the commissioner elects to implement a program providing for payment of personal income tax refunds by prepaid debit card or direct deposit to a designated account of the taxpayer, the department shall amend the forms used to file personal income tax returns to reflect, in the area designated for selection of options for processing of refunds, that the taxpayer has the option of receiving his or her tax refund by personal check and shall provide a box which the taxpayer may check to select that option.
  4. In any written notice regarding a prepaid debit card program for the payment of tax refunds, the department shall describe to taxpayers all of the features of the debit card program (e.g., withdrawal at any ATM or point-of-sale use), including any fee or fees which may be charged to the taxpayer in accessing his or her tax refund.
     
    * note: repealed November 15, 2021


PART 2: LIENS AND LEVIES

Tax Law Section 3016: notice to person liable to pay tax

Before the commissioner collects any tax by levy, the commissioner shall give prominent written notice to the person liable to pay the same that, in like manner as a judgment creditor, the department has certain rights to enforce the warrant by levying upon real and personal property of the taxpayer. Such statement shall be made in clear and concise language readily comprehensible to the average reader and shall be set off from any other text or notice.
     

Tax Law Section 3017: Notice to taxpayer of exempt property

In or with any notice to a taxpayer provided under subdivision (d) of section fifty-two hundred twenty-two of the civil practice law and rules, or under subdivision (c) of section fifty-two hundred thirty-two of the civil practice law and rules, at the time and in the manner such notice is provided,  there shall also be  provided  to  such taxpayer a list in summary form of substantially all property which is exempt from being applied to the satisfaction of tax warrants, including property listed in sections fifty-two hundred five and fifty-two hundred six of the civil practice law and rules. At any time, subsequent to the publication of a notice of sale and prior to the sale of real property pursuant to section fifty-two hundred thirty-six of the civil practice law and rules, a sheriff or an officer or employee of the department acting in the capacity of a sheriff shall mail by first class mail, or shall personally deliver, to each taxpayer who is a natural person a copy of the notice required by this section. Where a single notice is provided to a taxpayer pursuant to this section, it shall be deemed to be sufficient notice for purposes of complying with subdivision (d) of section fifty-two hundred twenty-two and subdivision (c) of section fifty-two hundred thirty-two of the civil practice law and rules if it contains the same basic text or information contained in the notice required by such subdivisions.   This section shall not apply to an income execution under section fifty-two hundred thirty-one of the civil practice law and rules.


Tax Law Section 3018: Uneconomical levies

No levy may be made on any property if the amount of the expenses which the commissioner estimates (at the time of levy) would be incurred by the commissioner with respect to the levy and sale of such property exceeds the fair market value of such property at the time of levy.


Tax Law Section 3020: Sales of seized property

  1. Any sale of property subject to a tax lien must be sold at the fair market value of the property at the time of the sale.
  2. The owner of any property seized by levy may request that the commissioner sell such property within sixty days after the request (or within a longer period if specified by the owner). The commissioner shall comply with the request unless the commissioner determines (and notifies the owner within such period) that such compliance would not be in the best interests of this state.


Tax Law Section 3022: Authority to release levy and return property

  1. Release of levy and notice of release.
    1. The commissioner shall release the levy upon all, or part of, the property or rights to property levied upon and shall promptly notify the person upon whom such levy was made (if any) that such levy has been released if:
      1. the liability for which such levy was made is satisfied or becomes unenforceable by reason of lapse of time,
      2. release of such levy will facilitate the collection of such liability,
      3. the taxpayer has entered into an agreement under section three thousand ten of this article to satisfy such liability by means of installment payments and such agreement provides for the release of levy,
      4. the fair market value of the property exceeds such liability and release of a levy on a part of such property could be made without hindering the timely collection of such liability, or
      5. the commissioner has determined that such levy is creating an economic hardship due to the financial condition of an individual taxpayer.
    2. Expedited determination of certain business property.  In the case of any tangible personal property essential in carrying on the trade or business of the taxpayer, the commissioner shall provide for an expedited determination under paragraph one of this subdivision if levy upon such tangible personal property would prevent the taxpayer from carrying on such trade or business.
    3. The release of levy on any property under paragraph one or two of this subdivision shall not prevent any subsequent levy on such property.
  2. Return of property. If the commissioner determines that property has been wrongfully levied upon, it shall be lawful for the commissioner to return:
    1. the specified property levied upon,
    2. the amount of money equal to the amount of money levied upon, or
    3. an amount of money equal to the fair market value of such property.
  3. Interest. Interest shall be allowed and paid at the rate established under section six hundred eighty-eight of this chapter on the amount of money or the fair market value of the property seized.
  4. Return of property in certain cases. If the commissioner determines that with respect to any property which has been levied upon:
    1. the levy on such property was premature or otherwise not in accordance with administrative procedures of the commissioner,
    2. the taxpayer has entered into an agreement under section three thousand ten of this article to satisfy the tax liability for which the levy was imposed by means of installment payments, unless such agreement provides otherwise,
    3. the return of such property will facilitate the collection of the tax liability, or
    4. with the consent of the taxpayer or the commissioner, the return of such property would be in the best interests of the taxpayer (as determined by the commissioner) and the state of New York, the provisions of subdivision (b) of this section shall apply in the same manner as if such property had been wrongly levied upon, except that no interest shall be allowed under subdivision (c) of this section.


PART 3: PROCEEDINGS BY TAXPAYERS

Tax Law Section 3030: Awarding of costs and certain fees

  1. In general. In any administrative or court proceeding which is brought by or against the commissioner in connection with the determination, collection, or refund of any tax, the prevailing party may be awarded a judgment or a settlement for:
    1. reasonable administrative costs incurred in connection with such administrative proceeding within the department, and
    2. reasonable litigation costs incurred in connection with such court proceeding.
  2. Limitations. 
    1. Exhaustion of administrative remedies. A judgment for reasonable litigation costs shall not be awarded under subdivision (a) of this section in any court proceeding unless the court determines that the prevailing party has exhausted the administrative remedies available to such party within the department. Any failure to agree to an extension of the time for the assessment of any tax shall not be taken into account for purposes of determining whether the prevailing party meets the requirements of the preceding sentence.
    2. Only costs allocable to the state. An award under subdivision (a) of this section shall be made only for reasonable litigation and administrative costs which are allocable to the state of New York and not to any other party.
    3. Costs denied where prevailing party protracts proceedings. No award for reasonable litigation and administrative costs may be made under subdivision (a) of this section with respect to any portion of the administrative or court proceeding during which the prevailing party has unreasonably protracted such proceeding.
    4. This section shall provide the exclusive means for a prevailing party to be awarded administrative and litigation costs incurred in connection with any administrative or court proceeding which is brought by or against the commissioner in connection with the determination, collection, or refund of any tax.
  3. Definitions.  For purposes of this section:
    1. Reasonable litigation costs.  The term “reasonable litigation costs” includes:
      1. reasonable court costs, and
      2. based upon prevailing market rates for the kind or quality of services furnished:
        1. the reasonable expenses of expert witnesses in connection with a court proceeding,
        2. the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and
        3. reasonable fees paid or incurred for the services of attorneys in connection with the court proceeding, except that such fees shall not be in excess of seventy-five dollars per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for such proceeding, justifies a higher rate.
    2. Reasonable administrative costs.  The term “reasonable administrative costs” means:
      1. any administrative fees or similar charges imposed by the department, and
      2. expenses, costs, and fees described in subparagraph (B) of paragraph one of this subdivision, except that any determination made by the court under clause (ii) or (iii) of such subparagraph shall be made by the division of tax appeals in cases where the determination under subparagraph (C) of paragraph five of this subdivision of the awarding of reasonable administrative costs is made by the division of tax appeals.  Such term shall only include costs incurred on or after the date of the notice of deficiency, notice of determination or other document giving rise to the taxpayer's right to a hearing.
    3. Attorney's fees. For purposes of paragraphs one and two of this subdivision, fees for the services of an individual (whether or not an attorney) who is authorized to practice before the division of tax appeals shall be treated as fees for the services of an attorney
    4. Burden of proof. For purposes of this section, “burden of proof” means the necessity or duty of proving, by a preponderance of the evidence, a fact or facts in dispute on an issue raised between the parties to a proceeding referred to in subdivision (a) of this section
    5. Prevailing party
      1. In general. The term “prevailing party” means any party in any proceeding to which subdivision (a) of this section applies (other than the commissioner or any creditor of the taxpayer involved):
        1. who (I) has substantially prevailed with respect to the amount in controversy, or (II) has substantially prevailed with respect to the most significant issue or set of issues presented, and
        2. who (I) within thirty days of final judgment in the action, submits to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this section, and the amount sought, including an itemized statement from an attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses were computed (except to the extent differing procedures are established by rule of court), and (II) is an individual whose net worth did not exceed two million dollars at the time the civil action was filed, or is an owner of an unincorporated business, or any partnership, corporation, association, unit of local government or organization, the net worth of which did not exceed seven million dollars at the time the civil action was filed, and which had not more than five hundred employees at the time the civil action was filed;  except that an organization described in section 501(c)(3) of the internal revenue code exempt from taxation under section 501(a) of such code, or a cooperative association as defined in the cooperative corporations law, may be a party regardless of the net worth of such organization or cooperative association.
      2. Exception if the commissioner establishes that the commissioner's position was substantially justified
        1. General rule. A party shall not be treated as the prevailing party in a proceeding to which subdivision (a) of this section applies if the commissioner establishes that the position of the commissioner in the proceeding was substantially justified.
        2. Burden of proof. The commissioner shall have the burden of proof of establishing that the commissioner's position in a proceeding referred to in subdivision (a) of this section was substantially justified, in which event, a party shall not be treated as a prevailing party.
        3. Presumption. For purposes of clause (i) of this subparagraph, the position of the commissioner shall be presumed not to be substantially justified if the department, inter alia, did not follow its applicable published guidance in the administrative proceeding.  Such presumption may be rebutted.
        4. Applicable published guidance. For purposes of clause (ii) of this subparagraph, the term “applicable published guidance” means (I) regulations, declaratory rulings, information releases, notices, announcements, and technical services bureau memoranda, and (II) any of the following which are issued to the taxpayer:  advisory opinions and opinions of counsel.
      3. Determination as to prevailing party. Any determination under this paragraph as to whether a party is a prevailing party shall be made by agreement of the parties or (i) in the case where the final determination with respect to tax is made at the administrative level, by the division of tax appeals, or (ii) in the case where such final determination is made by a court, the court.
    6. The term “administrative proceeding” means any procedure or other action before the division of taxation (such as the bureau of conciliation and mediation services) or division of tax appeals.
    7. The term “court proceeding” means any civil action brought in a court of the state of New York (including proceedings before the surrogate's courts under section nine hundred ninety-eight of this chapter).
    8. The term “position of the commissioner” means
      1. the position taken by the commissioner in a judicial proceeding to which subdivision (a) of this section applies, and
      2. the position taken in an administrative proceeding to which subdivision (a) of this section applies as of the date of the notice of deficiency, notice of determination or other document giving rise to the taxpayer's right to a hearing.
  4. Multiple actions. For purposes of this section, in the case of:
    1. multiple actions which could have been joined or consolidated, or
    2. a case or cases involving a return or returns of the same taxpayer (including joint returns of married individuals) which could have been joined in a single court proceeding in the same court, such actions or cases shall be treated as one court proceeding regardless of whether such joinder or consolidation actually occurs, unless the court in which such action is brought determines, in its discretion, that it would be inappropriate to treat such actions or cases as joined or consolidated.
  5. Right of appeal.
    1. Court proceedings.  An order granting or denying (in whole or in part) an award for reasonable litigation or administrative costs under subdivision (a) of this section in a court proceeding, may be incorporated as a part of the decision or judgment in the court proceeding and shall be subject to appeal in the same manner as the decision or judgment.
    2. Administrative proceedings.  A determination or decision granting or denying (in whole or in part) an award for reasonable administrative costs under subdivision (a) of this section by the division of tax appeals or the tax appeals tribunal shall be subject to exception or review in the same manner as the determination or decision.


Tax Law Section 3032: Civil damages for failure to release a lien

  1. In general.  A taxpayer may bring a civil action for damages against the state in the court of claims if any officer or employee of the department knowingly, or by reason of negligence, fails to release a lien on property of such taxpayer within forty days after the day on which (1) the commissioner finds that the liability for the amount assessed or determined, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable, or (2) there is furnished to the commissioner a surety bond issued by a surety company approved by the superintendent of financial services as to solvency or responsibility and authorized to transact business in this state, or other security acceptable to the commissioner, that is conditioned upon the payment of the amount assessed or determined, together with all interest in respect thereof, within the time prescribed by law (including any extension of such time) and is in accordance with such requirements relating to terms, conditions, and form of the bond or other acceptable security, as may be specified by regulation.
  2. Damages.  In any action brought under subdivision (a) of this section, upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of (1) actual, direct economic damages sustained by the plaintiff which, but for the actions of the defendant, would not have been sustained, plus (2) the costs of the action.
  3. Limitations.
    1. Exhaustion of administrative remedies. The amount of damages awarded under subdivision (b) of this section may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the department which have been established pursuant to the commissioner's authority to compromise civil liability provided in subdivision eighteenth-a of section one hundred seventy-one of this chapter.  In establishing administrative review procedures regarding claims for damages under this section, the commissioner is authorized to enter into contracts with private dispute resolution entities for the purpose of providing review of such claims and suggested compromises by independent third parties.
    2. Mitigation of damages.  The amount of damages awarded under paragraph one of subdivision (b) of this section shall be reduced by the amount of such damages which could have reasonably been mitigated by the plaintiff.
  4. Notice of failure to release lien. The commissioner shall by regulation prescribe reasonable procedures for a taxpayer to notify the commissioner of the failure to release a lien on the property of the taxpayer.


Tax Law Section 3034: Civil damages for certain unauthorized collection actions

  1. General.  If, in connection with any collection of any tax with respect to a taxpayer, any officer or employee of the department recklessly or intentionally disregards any provision of any tax, or any regulation promulgated under any of such taxes, such taxpayer may bring a civil action in the court of claims for damages against the state.  Except as provided in section three thousand thirty-two of this article relating to civil damages for failure to release a lien, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.
  2. Damages.  In any action brought under subdivision (a) of this section, upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the lesser of one hundred thousand dollars or the sum of (1) the actual, direct economic damages sustained by the plaintiff as a proximate result of the reckless or intentional actions of the officer or employee, and (2) the costs of the action.
  3. Limitations. 
    1. Exhaustion of administrative remedies. The amount of damages awarded under subdivision (b) of this section may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the department which have been established pursuant to the commissioner's authority to compromise civil liability provided in subdivision eighteenth-a of section one hundred seventy-one of this chapter. In establishing administrative review procedures regarding claims for damages under this section, the commissioner is authorized to enter into contracts with private dispute resolution entities for the purpose of providing review of such claims and suggested compromises by independent third parties.
    2. Mitigation of damages.  The amount of damages awarded under paragraph one of subdivision (b) of this section shall be reduced by the amount of such damages which could have reasonably been mitigated by the plaintiff.


Tax Law Section 3036: Civil actions by persons other than taxpayers

  1. Actions permitted.
    1. Wrongful levy.  If a levy has been made on property or property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the state of New York in the court of claims. Such action may be brought without regard to whether such property has been surrendered to or sold by the commissioner
    2. Surplus proceeds. If property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which the levy arose) who claims an interest in or lien on such property junior to that of the state of New York and to be legally entitled to the surplus of the proceeds of such sale may bring a civil action against the state of New York in the court of claims.
  2. Adjudication. The court shall have jurisdiction to grant only such of the following forms of relief as may be appropriate in the circumstances:
    1. Injunction. If a levy or sale would irreparably injure rights in property which the court determines to be superior to rights of this state in property, the court may grant an injunction to prohibit the enforcement of such levy or to prohibit such sale.
    2. Recovery of property.  If the court determines that such property has been wrongfully levied upon, the court may:
      1. order the return of specific property if this state is in possession of such property;
      2. grant a judgment for the amount of money levied upon; or
      3. if such property was sold, grant a judgment for an amount equal to the actual direct and consequential damages proven.
    3. Surplus proceeds.  If the court determines that the interest or lien of any party to an action under this section was transferred to the proceeds of a sale of such property, the court may grant a judgment in an amount equal to all or any part of the amount of the surplus proceeds of such sale.
  3. Validity of assessment.  For purposes of an adjudication under this section, the assessment of tax upon which the interest or lien of the department is based shall be conclusively presumed to be valid.
  4. Limitation on rights of action. No action may be maintained against any sheriff acting on behalf of the commissioner or any officer or employee of the department (or former sheriff, officer or employee) or his personal representative with respect to any acts for which an action could be maintained under this section.
  5. Substitution of the state as party.  If an action, which could be brought against the state under this section, is improperly brought against any sheriff acting on behalf of the commissioner or any officer or employee of the department (or former sheriff, officer or employee) or his personal representative, the court shall order, upon such terms as are just, that the pleadings be amended to substitute the state as a party for such sheriff, officer or employee as of the time such action was commenced upon proper service of process on the state.

Tax Law Section 3038: Civil damages for unauthorized disclosure of returns and return information

  1. General. 
    1. Disclosure by employee of the state.    If any officer or employee of the state of New York knowingly, or by reason of negligence, discloses any return or report, any particulars set forth or disclosed in any return or report, or any other information with respect to a taxpayer in violation of any provision listed in section eighteen hundred twenty-five of this chapter, such taxpayer may bring a civil action for damages against the state in the court of claims.
    2. Disclosure by a person who is not an employee of the state.  If a person who is not an officer or employee of the state knowingly, or by reason of negligence, discloses any return or report, any particulars set forth or disclosed in any return or report, or any other information with respect to a taxpayer in violation of any provision listed in section eighteen hundred twenty-five of this chapter, such taxpayer may bring a civil action for damages against such person.
  2. No liability for good faith but erroneous interpretation.  No liability shall arise under this section with respect to any disclosure which results from a good faith, but erroneous, interpretation of any of the provisions listed in section eighteen hundred twenty-five of this chapter.
  3. Damages. In any action brought under subdivision (a) of this section, upon a finding of a liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of (1) the greater of (A) one thousand dollars for each act of unauthorized disclosure with respect to which such defendant is found liable, or (B) the sum of (i) the actual damages sustained by the plaintiff as a result of such unauthorized disclosure, plus (ii) in the case of a willful disclosure or a disclosure which is the result of gross negligence, punitive damages, plus (2) the costs of the action.
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