§ 61. Notice of deficiency.--(a) General.--If upon examination of a
taxpayer's return under this local law the administrator determines that
there is a deficiency of income tax, he may mail a notice of deficiency
to the taxpayer. If a taxpayer fails to file an income tax return
required under this local law, the administrator is authorized to
estimate the taxpayer's city taxable income and tax thereon, from any
information in its possession, and to mail a notice of deficiency to the
taxpayer. A notice of deficiency shall be mailed by certified or
registered mail to the taxpayer at his last known address in or out of
the city. If a husband and wife are jointly liable for tax, a notice of
deficiency may be a single joint notice, except that if the
administrator has been notified by either spouse that separate
residences have been established, then, in lieu of the single joint
notice, a duplicate original of the joint notice shall be mailed to each
spouse at his or her last known address in or out of the city. If the
taxpayer is deceased or under a legal disability, a notice of deficiency
may be mailed to his last known address in or out of the city, unless
the administrator has received notice of the existence of a fiduciary
relationship with respect to the taxpayer.

(b) Notice of deficiency as assessment.--After ninety days from the
mailing of a notice of deficiency, such notice shall be an assessment of
the amount of tax specified in such notice, together with the interest,
additions to tax and penalties stated in such notice, except only for
any such tax or other amounts as to which the taxpayer has within such
ninety day period filed with the administrator a petition under section
sixty-nine. If the notice of deficiency is addressed to a person outside
of the United States, such period shall be one hundred fifty days
instead of ninety days.

(c) Restrictions on assessment and levy.--No assessment of a
deficiency in tax and no levy or proceeding in court for its collection
shall be made, begun or prosecuted, except as otherwise provided in
section seventy-four, until a notice of deficiency has been mailed to
the taxpayer, nor until the expiration of the time for filing a petition
contesting such notice, nor, if a petition with respect to the taxable
year has been filed with the administrator, until the decision of the
tax commission has become final. For exception in the case of judicial
review of the decision of the administrator, see subdivision (c) of
section seventy.

(d) Exceptions for mathematical errors.--If a mathematical error
appears on a return (including an overstatement of the credit for income
tax withheld at the source or of the amount paid as estimated income
tax), the administrator shall notify the taxpayer that an amount of tax
in excess of that shown upon the return is due, and that such excess has
been assessed. Such notice shall not be considered as a notice of
deficiency for the purposes of this section, subdivision (f) of section
sixty-seven (limiting credits or refunds after petition to the
administrator), or subdivision (b) of section sixty-nine (authorizing
the filing of a petition with the administrator based on a notice of
deficiency) nor shall such assessment or collection be prohibited by the
provisions of subdivision (c).

(e) Exception where change in federal taxable income is not
reported.--(1) If the taxpayer fails to comply with section thirty-nine
in not reporting a change or correction increasing his federal taxable
income as reported on his federal income tax return or in not reporting
a change or correction which is treated in the same manner as if it were
a deficiency for federal income tax purposes or in not filing an amended
return or in not reporting the execution of a notice of waiver described
in such section, instead of the mode and time of assessment provided for
in subdivision (b) of this section, the administrator may assess a
deficiency based upon such changed or corrected federal taxable income
by mailing to the taxpayer a notice of additional tax due specifying the
amount of the deficiency, and such deficiency, together with the
interest, additions to tax and penalties stated in such notice, shall be
deemed assessed on the date such notice is mailed unless within thirty
days after the mailing of such notice a report of the federal change or
correction or an amended return, where such return was required by
section thirty-nine, is filed accompanied by a statement showing wherein
such federal determination and such notice of additional tax due are
erroneous.

(2) Such notice shall not be considered as a notice of deficiency for
the purposes of this section, subdivision (f) of section sixty-seven
(limiting credits or refunds after petition to the administrator), or
subdivision (b) of section sixty-nine (authorizing the filing of a
petition with the administrator based on a notice of deficiency), nor
shall such assessment or the collection thereof be prohibited by the
provisions of subdivision (c).

(3) If a husband and wife are jointly liable for tax, a notice of
additional tax due may be a single joint notice, except that if the
administrator has been notified by either spouse that separate
residences have been established, then, in lieu of the joint notice, a
duplicate original of the joint notice shall be mailed to each spouse at
his or her last known address in or out of the city. If the taxpayer is
deceased or under a legal disability, a notice of additional tax due may
be mailed to his last known address in or out of the city, unless the
administrator has received notice of the existence of a fiduciary
relationship with respect to the taxpayer.

(f) Waiver of restrictions.--The taxpayer shall at any time (whether
or not a notice of deficiency has been issued) have the right to waive
the restriction on assessment and collection of the whole or any part of
the deficiency by a signed notice in writing filed with the
administrator.

(g) Deficiency defined.--For purposes of this local law, a deficiency
means the amount of the tax imposed by this local law, less (1) the
amount shown as the tax upon the taxpayer's return (whether the return
was made or the tax computed by him or by the administrator), and less,
(2) the amounts previously assessed (or collected without assessment) as
a deficiency and plus (3) the amount of any rebates. For the purpose of
this definition, the tax imposed by this local law and the tax shown on
the return shall both be determined without regard to payments on
account of estimated tax or the credit for withholding tax; and a rebate
means so much of an abatement, credit, refund or other repayment
(whether or not erroneous) made on the ground that the amounts entering
into the definition of a deficiency showed a balance in favor of the
taxpayer.