New York Law Review

Tag: Doran v. State Tax Commission

  • Matter of Doran v. State Tax Commission, 45 N.Y.2d 893 (1978): Validity of Tax Deficiency Notice with Minor Address Error

    Matter of Doran v. State Tax Commission, 45 N.Y.2d 893 (1978)

    A notice of tax deficiency is valid, despite a minor error in the taxpayer’s address, if the Commissioner of Taxation and Finance offers evidentiary proof of both mailing and actual receipt of the notice by the taxpayer in sufficient time to file a petition for redetermination.

    Summary

    This case addresses whether a notice of tax deficiency is valid when it contains a minor error in the taxpayer’s address but is actually received by the taxpayer in time to file a petition for redetermination. The Court of Appeals held that the notice is valid because the purpose of Tax Law § 681(a) is satisfied when the taxpayer receives actual notice within the statutory period. The court emphasized that the state statute was designed to mirror its federal counterpart and that federal courts have found actual notice to be sufficient.

    Facts

    The State Tax Commission mailed a notice of deficiency to the petitioner, Doran. The notice contained a minor error in Doran’s address. Despite the error, Doran actually received the notice. Doran received the notice in sufficient time to file a petition for redetermination of the deficiencies.

    Procedural History

    Doran challenged the validity of the notice of deficiency based on the address error. The lower court ruled in favor of Doran, finding the notice invalid. The State Tax Commission appealed to the Appellate Division, which affirmed. The State Tax Commission then appealed to the New York Court of Appeals.

    Issue(s)

    Whether a notice of tax deficiency is valid when it is mailed to the taxpayer at his last known address, but contains a minor error, and the taxpayer actually receives the notice in sufficient time to file a petition for redetermination of the deficiencies.

    Holding

    Yes, because Tax Law § 681(a) requires the notice to be mailed to the taxpayer at his last known address, and the purpose of this requirement is satisfied when the taxpayer receives actual notice within the statutory period, as demonstrated by the Commissioner’s evidentiary proof of mailing and receipt.

    Court’s Reasoning

    The Court of Appeals reversed the Appellate Division’s order and dismissed the petition. The court reasoned that Tax Law § 681(a) requires a notice of deficiency to be mailed to the taxpayer at his last known address. The court found that, in this case, the respondent determined that there was actual receipt in sufficient time to file a petition for redetermination of the deficiencies, despite the minor error. The court stated, “This determination may not be disturbed where reasonable inferences from the facts sustain it.”

    The court further reasoned that Tax Law § 681 was enacted to conform with the comparable Federal provision (26 USC § 6212 [a], [b]). Federal cases hold that actual notice within the statutory period establishes compliance with the notice requirement. The court cited Pugsley v Commissioner of Internal Revenue, 749 F2d 691 and Goolsby v Tomlinson, 246 F Supp 674. Therefore, the court concluded, “where, as here, the respondent Commissioner of Taxation and Finance offers evidentiary proof of both mailing and actual receipt, the notices of tax deficiency are valid despite an error in a taxpayer’s mailing address.” The court essentially adopted the federal interpretation of a similar statute, holding that actual notice cures a minor defect in the address.