Audits

• Sent to determine if your business is operating within the City of New York.
• Must be returned with proof of current, active or inactive status.
• Corporations no longer in business must submit a copy of their Certificate of Dissolution from the New York State Department of Taxation and Finance.
• Unincorporated Businesses must submit an affidavit stating they do not operate in NYC. The affidavit must be produced for each business owned. (There is no official City affidavit for this).
• If the business is inactive, submit one of the following:
  • Corporations - submit Form NYC-245 Activities Report of Corporation;
  • Partnerships - submit Federal Form 1065;
  • Unincorporated businesses other than partnerships - submit Federal Schedule C and the front page of Federal Form 1040.  Visit Internal Revenue Service for forms and additional information.

• An Information Document Request may be sent to you while your return is under review.
• The Information Document Request will also list the initial audit issues as well as phone numbers for the auditor, supervisor and manager assigned to your case.
• You must respond to by the deadline on the Information Document Request.
• It is important to send complete records for the period under review.
• An audit will continue with or without the additional information and a determination will be made based on available information.

• A Notice of Proposed Tax Adjustment may be sent when the audit results in an additional tax due. The Notice lists the tax due plus any interest and penalties.
• If you agree with the stated amount, the balance due must be paid within 30 days of the date on the Notice unless other payment arrangements are made.
• If you disagree, send a reply stating your position with supporting documentation within 30 days of the notice date or request an Exit Conference.
• If there is a payment error, proof of payment must be sent with your reply. If payment was made by bank check, send a copy of the front and back of the cancelled check. If payment was made by money order, obtain and send a copy of the cancelled money order from the place where it was purchased.

• A Workpaper Cover Letter that explains how to accept or disagree with the audit findings will be sent with the audit workpapers.
• If you accept the audit findings inform the auditor and a Consent to Audit Adjustments will be sent to you.
• If you disagree, send a reply stating your position with supporting documentation within 30 days of the letter date or request an Exit Conference.

• Consent to Audit Adjustment(s) is sent with the Notice of Proposed Tax Adjustments or when you accept the audit findings mailed to you with the Workpaper Cover. The Consent lists the tax due plus any interest and penalties. You will also receive a Payment Transmittal Form with instructions to return your payment to our Lockbox..
• Consent and Waiver is sent to you when the audit has been settled.  The Consent lists the tax due plus any interest and penalties. You will also receive a Payment Transmittal Form with instructions to return your payment to our Lockbox.

• Consent Determination is issued at the conclusion of the audit in confirmation of the Consent to Audit Adjustment(s) or Consent and Waiver. A Consent Determination lists the tax due plus interest and penalties.
• Notice of Determination is issued at the conclusion of the audit if you do not agree to the audit findings or if you did not respond to the Information Document Request(s) or Notice of Proposed Tax Adjustment. A Notice of Determination lists the tax due plus interest and penalties. In these cases the amount of tax will be based on all available information, including the Department of Finance’s past records and Federal Tax Returns.
• You or your representative has 90 days from the date stated on the Notice of Determination (or 150 days if the Notice is addressed outside the US) to decide which of the following options to choose:
  • Pay the tax shown;
  • File a Request For a Conciliation Conference; or
  • Petition for a Tax Appeals Tribunal Hearing.

A Notice and Demand for Payment to commence collection procedures will be issued to you if you fail to respond to a Notice of Determination within the required period.

A Notice and Demand for Payment to commence collection procedures will be issued to you if you fail to respond to a Notice of Determination within the required period.

The Department of Finance sends this notice at the end of an examination of your tax return if no adjustments were necessary.

The Department of Finance sends this notice after a refund request has been examined, and all or part of the refund is denied. The Notice explains the reasons for this decision.

• Deadlines to Appeal a Notice of Disallowance
  • If you receive a denial of a refund claim for General Corporation, Banking Corporation and or Unincorporated tax(es), you have two years from the date stated on the Notice of Disallowance to  file a Request for Conciliation Conference or a Petition for Hearing with the Tax Appeals Tribunal.
  • If you receive a denial of a refund claim for any other tax, you have 90 days from the date stated on the Notice of Disallowance to file a Request for Conciliation Conference or file a Petition for Hearing with the Tax Appeals Tribunal.
  • The disallowance or partial disallowance becomes final if you do not appeal by the deadline.
     

If you disagree with an audit finding, you have the option of filing an Appeal.