Tax Dispute Pre-Assessment Review

This process is designed primarily for self-correction by the New York State Department of Taxation and Finance (DTF). If a taxpayer receives a proposed assessment based on an audit or investigation and disagrees with the findings, they may request this informal review. The responsible tax office evaluates the entirety of the case, including any new evidence provided by the taxpayer, and may subsequently withdraw or amend the proposed charges. This emphasis on internal review makes the process less adversarial than formal litigation.

Only taxpayers who receive a written notice of proposed tax assessment or audit findings may file a request for review. The application must be submitted to the DTF within the strict deadline of 30 days of receiving the notice. Importantly, during the review process, enforcement actions—such as the imposition of liens or levies—are generally suspended until a formal decision is reached, offering the taxpayer a vital reprieve.

The pre-assessment review is a structured administrative procedure designed for efficient resolution.

The pre-assessment review process can conclude with several distinct outcomes, each determining the next course of action for the taxpayer.

• Accepted: The tax authority fully agrees with the taxpayer’s arguments and adjusts or cancels the proposed assessment, successfully resolving the dispute.
• Rejected: The review confirms the validity of the proposed charges, leading the case to move forward to the official issuance of the final assessment notice.
• Excluded: If the application is filed late, is incomplete, or fails to meet specific procedural requirements, the case may be dismissed without full substantive consideration.
• Reinvestigation Ordered: The department determines that insufficient information exists or that the initial audit was flawed, sending the case back for further examination before a definitive final outcome.

Following the official assessment notice, taxpayers may request a Conciliation Conference through the Bureau of Conciliation and Mediation Services (BCMS), or file a petition with the Division of Tax Appeals (DTA), both within 90 days of the assessment notice. The BCMS offers an informal mediation setting, while the DTA provides a more formal court-like hearing before an Administrative Law Judge. Successfully navigating these initial administrative avenues can often resolve the tax dispute without the need for expensive and lengthy court battles.

If administrative relief through the BCMS and DTA fails to satisfy the taxpayer, the final avenue is to seek judicial review. The taxpayer may initiate an Article 78 proceeding in the New York State Supreme Court to challenge the final administrative decision. This legal action must be filed within 90 days of the final administrative determination, adhering to a strict statute of limitations. Given the procedural complexity and requirement for legal pleading, engaging experienced tax counsel is highly advised for this final, critical stage.

By adhering to a few key strategies, taxpayers can significantly strengthen their position during the pre-assessment review process. A proactive and detailed approach is the hallmark of a successful application.

• Respond Promptly: Always submit the review request within the non-negotiable 30-day deadline, as late submissions are almost always excluded from consideration.
• Be Specific: Clearly and thoroughly detail the exact reasons why the proposed assessment is incorrect, citing specific tax code sections or factual errors in the audit.
• Provide Comprehensive Documentation: Supporting evidence is the most critical element; ensure all relevant financial records, contracts, and correspondence are meticulously organized and submitted with the application.
• Consider Legal Advice: Even at this early, administrative stage, consulting with experienced tax attorneys can help structure a stronger legal argument and ensure full compliance with filing requirements.