Ryan Tax Gateway, New York Sampling Bibliography

New York Sampling Bibliography

Division of Tax Appeals

The full texts of New York Division of Tax Appeals decisions are available on WESTLAW in the NYTX-ADMIN database.

Review Articles

Brown, Parker E., II, State Taxation, 33 SYRACUSE LAW REVIEW 457-476 (1982).
Kutcher, Howard, The Use of Statistical Sampling in a Sales Tax Audit, 62 THE CPA JOURNAL 64 (March 1993). (Discusses Marine Midland Bank (1992) decision by New York Division of Tax Appeals).
Locke, James A., and Martha L. Salzman, 1993-1994 Survey of New York Law, 45 Syracuse Law Review 629-691 (1994).
McKinney's Consolidated Laws of New York Annotated, Tax Law sec.1138.
Murphy, Joseph H., and E. Parker Brown, II, Taxpayers Reap Estimated Sales Tax Savings as Estimated Audits Are Voided, 54 NEW YORK STATE BAR JOURNAL 434-438 (November 1982).

McKinney's Tax Law

McKinney's Tax Law sec.1138(a). (Authorizes the Commissioner of Taxation to use any information available, including estimation based on external indices or other information. When the tax is estimated, the taxpayer must be informed of the amount of tax estimated and allowed to challenge that estimate through the hearing process).

Cases disallowing auditor's reliance on sampling when taxpayer had adequate records

Allied New York Services, Inc. v. Tully, 83 A.D.2d 727, 442 N.Y.S. 2d 624 (New York Supreme Court Appellate Division, 1981) (Court denied auditor's reliance on a one- month test period when taxpayer's records were available for the 81-month examination period).
Chartair, Inc. v. State Tax Commission, 65 A.D.2d 44, 411 N.Y.S. 2d 41, (New York Supreme Court Appellate Division, 1978) (Court denied auditor's reliance on a three-month test period when taxpayer's records were available for entire 43-month examination period).
Christa Cella, Inc. v. State Tax Commission, 102 A.D.2d 352, 477 N.Y.S. 2d 858 (New York Supreme Court Appellate Division, 1984) (Court denied assessment based on projections when auditor could not show the taxpayer's records were insufficient for complete testing).
James G. Kennedy & Company, Inc. v. Chu as Commissioner of Taxation and Finance, 125 A.D.2d 773, 509 N.Y.S. 2d 199 New York Supreme Court Appellate Division, 1986) (Court denied auditor's assessment based on a test period when the taxpayer had adequate records and did not consent to a waiver of its right to a full examination rather than the use of a test period).
Marine Midland Bank, N.A., New York DTA No. 807533, 1992 WL 175837(New York Division of Tax Appeals, 1992) (Administrative law judge denied auditor's reliance on computer assisted statistical sampling for periods where the taxpayer had adequate records for complete examination. This decision includes extensive discussion of New York case law and expert testimony on the Division of Taxation's statistical methodology).
Mohawk Airlines, Inc, v. Tully, 75 A.D.2d 249, 429 N.Y.S. 2d 759 (New York Supreme Court Appellate Division, 1980) (Court denied auditor's use of test period method when taxpayer had adequate records available).
Names in the News, Inc. v. State Tax Commission, 75 A.D. 145 (New York Supreme Court Appellate Division, 1980) (Court denied auditor's use of test period method when taxpayer had adequate records available).
Reader's Digest Association, Inc., v. Friedlander, 100 A.D.2d 871, 474 N.Y.S. 2d 131(New York Supreme Court Appellate Division, 1984) (Court denied auditor's reliance on a one-month test period when the taxpayer's complete records were available. However, the taxpayer must exhaust its administrative remedies prior to a declamatory judgment action).
Yonkers Plumbing and Heating Supply Corp. v. Tully, 62 A.D.2d 18 (New York Supreme Court Appellate Division, 1978) (Court denied auditor's reliance on one month test period to project over 58 month -period when taxpayer had adequate records for full examination).

Cases that upheld the use of sampling

Arnmart Wholesale Beer Distributors, Inc. v. State Tax Commission, 140 A.D.2d 900, 528 N.Y.S. 2d 923 (New York Supreme Court Appellate Division, 1978) (Court upheld use of test period).
Del's Mini Deli Inc. v. Commissioner of Taxation and Finance, 205 A.D.2d 989, 613 N.Y.S. 2d 967 (New York Supreme Court Appellate Division, 1994) (Court held taxpayer's records were inadequate for complete examination, and auditor was justified in using an estimation method).
Franceso Lombard v. Commissioner of Taxation and Finance, 197 A.D.2d 799, 602 N.Y.S. 2d 972 (New York Supreme Court Appellate Division, 1993) (Court held taxpayer's records were inadequate for complete examination, and auditor was justified in using an estimation method).
Gifts by Gallego, 1993 WL 57208, affirmed, 1993 WL 542493 (New York Division of Tax Appeals, 1993) (Administrative law judge allows the auditor considerable discretion in sampling method when the taxpayer's records are inadequate).
James Waite, Officer of Harrison Radio Corp., 1993 WL 498235 (New York Division of Tax Appeals, 1993) (Administrative law judge upheld auditor's use of a test period for 1976-1979 rather than a detailed examination of all available records. The judge denied the auditor's assessment for the 1979-1980 examination period since the auditor simply projected the 1976-1979 error rate onto the 1979-1980 sales population). Case appealed on other grounds to New York Tax Appeals Tribunal (1995), 1995 WL 26185.
Licata v. Chu, 64 A.D.2d 873, 487 N.Y.S. 2d 552, 476 N.E. 2d 997, 193 NYLJ 17, No. 37 (New York Court of Appeals, 1985) (Court upheld auditor's use of test period when taxpayer's records were inadequate).
Lombard v. Commissioner of Taxation and Finance, 197 A.D.2d 799, 602 N.Y.S. 2d 972 (New York Supreme Court Appellate Division, 1993) (Court upheld use of one-day test period when taxpayer's records were inadequate).
Meskouris Brothers, Inc. v. Chu, 139 A.D.2d 813, 526 N.Y.S. 2d 679, (New York Supreme Court Appellate Division, 1988) (Court held that when taxpayer's records were abysmal, the auditor could use a two-day test period to project an assessment over 1300 days).
Murray's Wines & Liquors v. State Tax Commission, 78 A.D.2d 947, 433 N.Y.S. 2d 250 (New York Supreme Court Appellate Division, 1980) (Court held taxpayers records were inadequate and allowed auditor to sample a two month test period and estimate over a three year projection period).
Omar Shukry v. Tax Appeals Tribunal, 184 A.D.2d 874, 585 N.Y.S. 2d 531(New York Supreme Court Appellate Division, 1992) (Auditor was allowed to use an external rental market index to estimate deficiency when taxpayer's records were inadequate).
Queens Discount Appliances, (New York Division of Tax Appeals, 1992), 1992 WL 202303, affirmed, 1993 WL 547658 (New York Division of Tax Appeals, 1993) (Court held auditor could use estimation method based on inadequate records made available during initial audit. The taxpayer could not require auditor to do complete examination when additional records were made available after the assessment was issued).
Rosalind Cook, et al, as officers of Tango Boutique, Inc., v. Tax Appeals Tribunal, 222 A.D.2d 962, 635 N.Y.S.2d 355 (New York Supreme Court Appellate Division, 1995) (Court held taxpayer's records were inadequate for complete examination, and auditor was justified in using an estimation method).
Sloan's Supermarkets, Inc. v. Chu, 140 A.D.2d 794, 527 N.Y.S. 2d 889 (New York Supreme Court Appellate Division, 1988) (Court held auditor could use the representative test period audit method when the taxpayer consented to the use of estimation and waived its rights to a full examination of its adequate records).
Sidney Wallach, as an Officer of Wallach Sons of Eastchester v. Tax Appeals Tribunal, (New York Supreme Court Appellate Division - 3rd Department, 1994) (Court held that auditor could use the representative test period audit method when the taxpayer consented to the use of estimation and waived its rights to a full examination of its adequate records).
W. T. Grant v. Joseph, 2 N.Y.S. 2d 196, 159 N.Y.S. 2d 150, cert. denied 355 U.S. 869 (New York Court of Appeals, 1957) (Court allowed auditor to use estimation or external indices).

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