Audit Notices
Business taxpayers receive a number of Notices from Finance’s Audit Division:
Questionnaire
Letter Requesting Information
Notice of Proposed Tax Adjustment / Notice of Tax Due
Notice of Determination
Notice and Demand for Payment
Delinquency Notice (For Non-Filing and Taxes Due)
Notice of Refund Disallowance
Deadlines to Appeal a Notice of Disallowance
Note: All correspondence should be sent to the address shown on the Notice.
Questionnaire
Finance may send a questionnaire to determine if a business is operating within the City of New York.
Action Required
The owner or their representative must return the questionnaire 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
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Letter Requesting Information
The Audit Division may request additional information from a business while their return is under review.
Action Required
A business should respond to a request by the deadline on the Notice. It is important to send complete and current records. An audit will continue with or without the additional information and a determination will be made based on available information.
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Notice of Proposed Tax Adjustment / Notice of Tax Due
A Notice of Proposed Tax Adjustment is sent when the Audit Division has determined an additional tax is due. The Notice lists the amount plus any penalties and interest.
Action Required
If the business agrees with the stated amount, the balance due should be paid within 30 days of the date on the Notice.
A business who disagrees should send a reply with related documentation within 30 days of the Notice date.
If there was a payment error, proof of payment must be sent with your reply. If the payment was made by bank check, send a photocopy of the front and back of the cancelled check. Obtain and send a copy of the cancelled money order from the place where it was purchased.
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Notice of Determination
If we do not receive a response to the first Notice within the 30 day due date (see above), Finance will decide what taxes a business should pay. A Notice of Determination will then be sent. In these cases the amount of tax will be based on all available information, such as Finance’s past records and Federal Tax Returns, etc.
Action Required
A business 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:
Notice and Demand for Payment
If a business has not responded to letters sent by Finance, we will issue a Notice and Demand for Payment. Failure to act at this time will result in the beginning of collection procedures.
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Delinquency Notice (For Non-Filing and Taxes Due)
Businesses who fail to file a required tax return or pay by its due date receive this Notice.
Action Required
A business must respond within 30 days of the date on this Notice, by either;
- Filing the return and/or payment; or
- Completing the questionnaire to explain why the Notice is incorrect.
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Notice of Refund Disallowance
The Notice of Disallowance or Partial Disallowance is sent by Finance after a refund request has been examined, and all or part of it is denied. The Notice explains the reasons for this decision.
Deadlines to Appeal a Notice of Disallowance
General Corporation and Unincorporated businesses have two years from the date stated on the Notice of Disallowance. They must either file a Request for a Conciliation Conference or a petition for a Tax Appeals Tribunal Hearing.
All other businesses have 90 days from the date stated on the Notice to either seek a Conciliation Conference or file a petition with the Tribunal.
The disallowance or partial disallowance becomes final if the business does not choose either of the above options by the deadline. No further review will be available without good reason.
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