Greco v. New York State Tax Com'n

• Decision Date: 02 February 1984
• Citation: 99 A.D.2d 870,472 N.Y.S.2d 746
• Parties: In the Matter of John GRECO, Petitioner, v. NEW YORK STATE TAX COMMISSION, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 746

472 N.Y.S.2d 746

99 A.D.2d 870

In the Matter of John GRECO, Petitioner, v. NEW YORK STATE TAX COMMISSION, Respondent.

Supreme Court, Appellate Division Third Department.

Feb. 2, 1984.

A. George Koevary, New York City, for petitioner.

Robert Abrams, Atty. Gen. (Leslie B. Neustadt, Asst. Atty. Gen., of counsel), for respondent.

Before KANE, J.P., and MAIN, YESAWICH, WEISS and LEVINE, JJ.

MEMORANDUM DECISION.

Proceeding pursuant to CPLR article 78 (transferred to this court by order of the Supreme Court at Special Term, entered in Albany County) to review a determination of the State Tax Commission which sustained a determination that a notice of small claims hearing complied with State Tax Commission regulations and that assessments of unincorporated business taxes for the years 1973, 1974 and 1975 were not barred by the Statute of Limitations.

Petitioner filed joint New York State tax returns with his wife for the years 1973, 1974 and 1975. Although these returns stated that petitioner had business income whose source was described as insurance or insurance/accounting, the section for unincorporated business income tax was left blank. Subsequently, respondent, in 1978, assessed unincorporated business taxes for 1973 to 1975 on petitioner's insurance/accounting business income and issued notices of deficiency for those years. Petitioner requested a hearing and, after the parties were unable to settle the issue, petitioner filed a perfected petition to reverse the assessments. Respondent then issued a notice of small claims hearing.

The hearing was held June 16, 1981 and dealt with only two issues: (1) whether the notice of hearing was in compliance with respondent's rules and regulations and (2) whether the assessment by respondent was barred by the Statute of Limitations. The hearing officer found that the notice of hearing was in compliance with respondent's rules and that the assessments were not barred by the Statute of Limitations. Petitioner thereafter commenced this transferred CPLR article 78 proceeding contesting respondent's determination.

Petitioner initially argues that certain violations by respondent of its own regulations require annulment of the determination. Specifically, petitioner contends that: (1) respondent's notice of small claims hearing did not include all the information required by 20 NYCRR 601.8(c)(4)(ii), (iii) and (iv); (2) respondent submitted an ex parte communication to the hearing officer after the hearing without prior approval in violation of 20 NYCRR 601.8(g)(2) and 601.9(d)(5); and (3) respondent rendered a decision more than 90 days after the hearing in violation of 20 NYCRR 601.8(h).

Respondent did not render a decision until January 3, 1983, more than 90 days after the hearing, which concluded on June 16, 1981. Accordingly, 20 NYCRR 601.8(h) was violated. Although a 90-day limit for decisions is set forth in 20 NYCRR 601.8(h), no language in that regulation indicates that the time limit is mandatory. This being the case, it is our conclusion that the time limit is merely directory and, thus, the violation of the time limit does not necessitate an annulment of the determination (cf. Matter of Sullivan v. Siebert, 70 A.D.2d 975, 417 N.Y.S.2d 129).

Respondent's attorney communicated with the hearing officer in the form of a letter after the hearing. However, even assuming that this communication, without seeking prior approval from the hearing officer, was in violation of 20 NYCRR 601.8(g)(2) and/or 601.9(d)(5), annulment is not warranted in that no prejudice arose from that violation, since petitioner received a copy of the letter and responded thereto in a letter to the hearing officer.

Petitioner's final argument in this...