New York City Department of Finance

Resolution of Taxpayer Disagreements and Protests

The New York City Department of Finance is responsible for identifying New York City businesses that either fail to file a tax return or fail to pay the correct amount of taxes. When the Department determines that a taxpayer owes additional tax, the taxpayer is given the opportunity to dispute its decision both informally (disagreed case) and formally (protested case). We found that the Department had not established an adequate system of management controls for its processing of disagreed and protested cases. In particular, the Department had not established expected time frames for routine case processing activities and did not monitor the actual processing times of these activities. As a result, the Departmentís managers had no assurance these activities were being performed in as timely a manner as possible.

To determine whether there were long delays in the Departmentís resolution of taxpayer disagreements and protests, we reviewed a sample of disagreed cases and a sample of protested cases. We found that some of the cases were delayed for significant periods of time. To reduce the extent of such delays, we recommended the Department establish expected time frames for routine case processing activities, monitor actual processing times against these expected times, and take corrective action when delays were identified. We noted that such a monitoring system was used by the New York State Department of Taxation and Finance, and the system helped the Department significantly improve the timeliness of its disagreement resolution process.

For a complete copy of Report 2006-N-7 click here.