Linette Sifre

LINETTE SIFRE ORDER
DTA NO. 819955
for Revision of a Determination or for Refund of Sales
and Use Taxes under Articles 28 and 29 of the Tax
Law for the Period December 1, 1999 through
November 30, 2002.
________________________________________________

Petitioner, Linette Sifre, 17 Clarion Drive, Whitesboro, New York 13492, filed a petition for revision of a determination or for refund of sales and use taxes under Articles 28 and 29 of the Tax Law for the period December 1, 1999 through November 30, 2002.

On August 26, 2004 the Division of Tax Appeals issued to petitioner a Notice of Intent to Dismiss Petition pursuant to 20 NYCRR 3000.9(a)(4), on the grounds that petitioner failed to file a corrected petition within the time prescribed therefor in 20 NYCRR 3000.3(d)(1) and (2). On October 6, 2004, following the granting of a 30-day extension of time to submit its written comments on the proposed dismissal, the Division of Taxation ("Division") by Christopher C. O'Brien, Esq. (John E. Matthews, Esq., of counsel) submitted the document missing from the petition and also submitted documents in support of the dismissal of the petition on alternate grounds. On December 8, 2004, petitioner's representative, Joseph H. Hobika, Jr., Esq., submitted documents in opposition to the proposed dismissal. On January 10, 2005, petitioner was given until February 9, 2005 to address the issue raised by the Division. However, petitioner did not respond. Accordingly, February 9, 2005 commenced the 90-day period for the issuance of this order. After due consideration of the documents and arguments submitted, Gary R. Palmer, Administrative Law Judge, renders the following order.

Whether the Division of Tax Appeals has jurisdiction to consider the merits of the issues raised by petitioner in the petition filed by her.

1. On May 19, 2003 the Division issued a Notice of Determination to petitioner as an officer or responsible person of Phat Cigars, Inc. ("the corporation") imposing sales and use taxes for the period December 1, 1999 through November 30, 2002 as follows:

Tax Year Ended	Tax Assessed	Interest	Penalty	Balance Due
11/30/00	$56,000.00	$19,824.72	$22,400.00	$98,224.72
11/30/01	$108,000.00	$21,699.93	$39,960.00	$169,659.93
11/30/02	$108,000.00	$7,035.79	$27,000.00	$142,035.79
Totals	$272,000.00	$48,560.44	$89,360.00	$409,920.44

2. On December 31, 2003 petitioner filed a request for a conciliation conference with the Bureau of Conciliation and Mediation Services ("BCMS").

3. On January 23, 2004 BCMS issued to petitioner a conciliation order dismissing request reading as follows:

4. On April 22, 2004 the Division of Tax Appeals received the petition filed by petitioner in this matter. The United States Postal Service ("USPS") Express Mail envelope bearing the petition was postmarked April 21, 2004.

5. On August 26, 2004 the Petition Intake, Review and Exception Unit of the Division of Tax Appeals issued a Notice of Intent to Dismiss Petition to petitioner. A copy of the Notice was sent to the Division. The notice states:

6. In response to the Notice of Intent to Dismiss Petition, the Division submitted copies of the missing Notice of Determination and Conciliation Order Dismissing Request as well as affidavits from three Division employees, namely John E. Matthews, Esq., an attorney in the Office of Counsel of the Division; Bruce Peltier, the Mail and Supply Supervisor of the Division's Registry Unit; and Geraldine Mahon, the Principal Clerk of the Division's Case and Resource Tracking System ("CARTS") Control Unit. In his affidavit Mr. Matthews asserts that the Notice of Determination was properly issued to petitioner's last known address, 17 Clarion Drive, Whitesboro, New York 13492, and that because petitioner's request for a conciliation conference was mailed more than 90 days from the date the Notice of Determination was issued, the Division of Tax Appeals lacks jurisdiction to review the notice. Mr. Matthews's affidavit is supported by a copy of petitioner's 2002 New York State Resident Income Tax Return indicating her use of the Whitesboro, New York address, and stating her 2002 New York adjusted gross income to be $23,949.00. Ms. Mahon's affidavit sets forth the Division's general procedures for preparing notices of determination and other statutory notices. The affidavit of Mr. Peltier attests to the regular procedures followed by the Registry Unit for delivery of outgoing certified mail to branches of the USPS.

7. The Mahon affidavit describes the general process for issuing and mailing statutory notices, which in 2003 began with the computer generation of the notices and a listing of the names and addresses and other pertinent information regarding the taxpayers to whom such notices were to be sent by certified mail on a particular day. This listing is referred to as the certified mail record ("CMR"). A discrete certified control number was assigned to each of the 188 statutory notices listed on the 18-page CMR submitted by the Division with the Mahon and Peltier affidavits. Certified control number 7104 1002 9739 0175 6415 appears on page 15 of the CMR next to reference number L022345426 and petitioner's name and address. Her address, as it appears on the CMR, is 17 Clarion Dr, Whitesboro, NY 13492-2703. Petitioner's name with this same address and reference number also appears on the first page of the Notice of Determination.

8. The names and addresses of the other 187 taxpayers listed on the CMR were redacted to preserve confidentiality. The standard practice of the CARTS Control Unit is to forward the CMR with the associated batch of statutory notices to the Division's Mail Processing Center, where a member of Mr. Peltier's staff operates a machine that inserts each statutory notice into a windowed envelope whereby the taxpayer's name and address are visible. Each envelope is then sealed, weighed and imprinted with postage and fees. Next a mail processing clerk conducts a random comparison of some of the envelopes against the corresponding information on the CMR. Then another member of the Mail Processing Center staff delivers the sealed and stamped envelopes, with the CMR, to one of the branch offices of the USPS in the Albany, New York area.

9. An examination of the CMR in the matter here under review reveals that a postal service employee at the Colonie Center branch of the USPS affixed a dated postmark to each of the 18 pages of the CMR. The date of the postmark is May 19, 2003. The USPS employee also placed his or her initials on each page of the CMR and wrote in and circled the number 188 on page 18 of the CMR just below and to the right of the printed words "total pieces received at post office." This step in the process was accomplished because the Division's Mail Processing Center specifically requested that a USPS employee either circle the number of pieces of mail received or indicate the total number of pieces received by writing that number on the CMR.

10. The CMR was returned to a Mail Processing Center employee by a USPS employee, who, in turn, delivered it to the CARTS Control Unit to be maintained as a permanent record in the regular course of that unit's business.

11. The Division asserts that because petitioner's request for a conciliation conference was filed more than 90 days after the date the Notice of Determination was issued, the request was untimely filed and the Division of Tax Appeals lacks jurisdiction to review the notice and the merits of petitioner's request.

12. Petitioner, through her representative, asks that the Notice of Intent to Dismiss Petition be withdrawn because she was not employed by the corporation after March of 2000, and that during the period of her employment her duties were ministerial in nature, and she was never an officer or employee who was under a duty to act for the corporation in complying with any requirement of Article 28 of the Tax Law.

A. Tax Law § 1138(a)(1) authorizes the Division of Taxation to issue a Notice of Determination to a person liable for the collection or payment of tax where "a return required by [Article 28 of the Tax Law] is not filed, or if a return when filed is incorrect or insufficient." Tax Law § 1133(a) provides that "every person required to collect any tax imposed by this article shall be personally liable for the tax imposed . . . ." A taxpayer may file a petition with the Division of Tax Appeals seeking revision of the determination, or alternatively, a request for a conciliation conference with BCMS, within 90 days of the mailing of the notice of determination (see, Tax Law § 1138[a][1]; § 170[3-a][a]).

B. Where, as here, the Division claims a taxpayer's protest against a Notice of Determination was not timely filed, the initial inquiry must focus on the issuance (i.e., mailing) of the notice. Where a notice is found to have been properly mailed, "a presumption arises that the notice was delivered or offered for delivery to the taxpayer in the normal course of the mail" (see, Matter of Katz, Tax Appeals Tribunal, November 14, 1991). However, the "presumption of delivery" does not arise unless or until sufficient evidence of mailing has been produced and the burden of demonstrating proper mailing rests with the Division (id.). The Division may meet this burden by evidence of its standard mailing procedure, corroborated by direct testimony or documentary evidence of mailing (see, Matter of Accardo, Tax Appeals Tribunal, August 12, 1993).

C. The mailing evidence required is two-fold: First, there must be proof of a standard procedure used by the Division for the issuance of statutory notices by one with knowledge of the relevant procedures; and second, there must be proof that the standard procedure was followed in this particular instance (see, Matter of Katz, supra; Matter of Novar TV & Air Conditioner Sales & Serv., Tax Appeals Tribunal, May 23, 1991).

D. In this case, the Division has introduced adequate proof of its standard mailing procedures through the affidavits of Ms. Mahon and Mr. Peltier, Division employees involved in and possessing knowledge of the process of generating and issuing (mailing) notices of determination.

E. The CMR also provides sufficient documentary proof to establish that the notice of determination dated May 19, 2003 was mailed as addressed on May 19, 2003. This 18-page document lists 188 certified control numbers with the corresponding names and addresses redacted, except for that of petitioner. There are no deletions from this list. Each page of the CMR bears a USPS postmark dated May 19, 2003. Additionally, a postal service employee circled the number "188" next to the words "total pieces received at post office" on page 18 of the CMR, and initialed each page of the CMR to indicate receipt by the post office of all pieces of mail listed thereon.⁽¹⁾ This evidence is sufficient to establish that the Division mailed the subject Notice of Determination as claimed on May 19, 2003.

F. Having determined that the Division properly issued the subject Notice of Determination on May 19, 2003, it must now be determined whether petitioner's request for conciliation conference was timely filed. Where an envelope containing a request bears a USPS postmark, the date of the USPS postmark is deemed the date of filing (see, 20 NYCRR 4000.7[a][2][iii][a]). Here, the photocopy in evidence of the envelope containing petitioner's request bears a USPS postmark dated December 31, 2003. As previously noted, a request for conciliation conference with BCMS must be filed within 90 days of the mailing of the Notice of Determination (see, Tax Law § 1138[a][1]; § 170[3-a][a]). Ninety days from the May 19, 2003 mailing date of the subject Notice of Determination was August 17, 2003, a Sunday. Consequently, the 90-day period in which to file a request for a conciliation conference expired on Monday, August 18, 2003. Petitioner's request for conciliation conference was received in an envelope bearing a USPS postmark dated December 31, 2003. The request for a conciliation conference was therefore untimely.

G. In her petition, petitioner claimed that the assessment was in error in that she was employed by the corporation in a ministerial capacity for no more than the initial three months of the three-year audit period. Because petitioner failed to file a timely protest to the subject Notice of Determination, the Division of Tax Appeals has no jurisdiction over the matter and therefore may not consider the merits of petitioner's claims (see, Matter of Sak Smoke Shop, Tax Appeals Tribunal, January 6, 1989). In Matter of Sugranes (Tax Appeals Tribunal, October 3, 2002), the Tribunal expressed sympathy for the plight of that taxpayer, who filed an untimely request for a conciliation conference, noting that "any relief for the seemingly harsh result produced by application of the statute of limitations set forth in Tax Law § 1138(a) would require legislative action."

H. Although the Division of Tax Appeals lacks jurisdiction to entertain the petition at this time, petitioner is not without a remedy. Prior to January 1, 1997, sales tax asserted due in a notice of determination was finally and irrevocably fixed as a consequence of a taxpayer's failure to timely contest such notice. However, the Laws of 1996 (ch 267) amended Tax Law § 1138(a)(1) by deleting the language in the former statutory provision which finally and irrevocably fixed sales tax determined due. This amendment was effective July 2, 1996, but made applicable to taxable years commencing on and after January 1, 1997 as specified in section 3 of the Laws of 1996 (ch 267). As a result, petitioner, for the period at issue, which is subsequent to January 1, 1997, may pay the assessment and apply for a refund. If her refund is disallowed, petitioner may then file a timely petition or a request for a conciliation conference and have the merits of her claim reviewed.

I. The petition of Linette Sifre is dismissed and the Notice of Determination, dated May 19, 2003, is sustained.

1. ¹This fact was established through the affidavit of Mr. Peltier which specifically set forth the basis of his knowledge for this proposition (cf., Matter of Roland, Tax Appeals Tribunal, February 22, 1996).