for secretarial, postage and other miscellaneous office expenses.
At the conclusion of the meeting, the auditor requested additional information in order to verify the receipts amount claimed, as well as the legal expenses claimed. Mr. Moore was requested to supply the following items within two weeks: copies of all invoices billed to clients; all invoices received from law
firms for services provided to Mr. Moore and copies of the Bank of New York checking account statements.11. The record includes a handwritten worksheet, for 1993, given to the auditor at the October 29, 1997 meeting. This worksheet contains the computation of the claimed toss of $100,641.00 from Mr. Moore’s business. The calculation follows: first, office rent in the amount of $51,094.00 was subtracted from fees
received in the amount of $70,696.00; then, office expenses legal) in the amount of $34,756.00 and office expenses (general) in the amount of $85,487.00 were subtracted from the remainder of$19,602.00 to arrive at loss of $100,641.00.12. By letter dated November 18, 1997, the conciliation conferee informed petitioners that, based on all the evidence submitted at the conciliation conference, he had determined as follows:
The starting point for determining New York State income tax is federal
You
are also prohibited from filing an amended New York State personal
income tax return by the three year statute of
limitations under Section
687 of the New York Tax Law. Therefore,
your amended New York State
LT-203 return is not accepted.
The conferee also informed petitioners that since they had not submitted any evidence to refute the audit findings, he had to sustain the Notice of Deficiency.
13. By letter dated November 28, 1997, Mr. Moore challenged the conferee’s determination, writing the following:
1.
No New York tax is due for 1993 because we had no New York taxable
income. This was proven in papers I submitted to Amy
Sahr of the New
York State Department of Taxation ma face-to-face
conference on
October 29, 1997 and in back-up documents 1 submitted
at her request
to Dianne Di Pasquale on November 6, 1997. Both agreed
in a telephone
conference that no tax is due.
2.With
due deference, I submit your reading of Section 687 is incorrect.
Section 687(a) prohibits a claim for refund after
the 3- year statute
has run. It does not prohibit a showing of
the true facts when a
deficiency is being resisted. Furthermore, the
New York 3-year statute
has not run because the State has kept it open
by instituting this
procedure.Section687(b) and (f). If any tax had been
paid, a refund
would be due.
3. Please expunge the asserted deficiency and send me notice to that effect.
14. The conferee issued a Conciliation Order (CMS No. 159092) dated December
12, 1997 sustaining the statutory notice.
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