65 A.D.2d 228 | N.Y. App. Div. | 1978
OPINION OF THE COURT
There is substantial agreement as to the following pertinent facts. In 1969 petitioner became affiliated with two others, Lane and Bartolucci, and formed LBM Lithographers, Inc. (LBM). Petitioner owned 50% of the stock and a corporation owned by the other two owned the other 50%. Petitioner was
Petitioner raises three issues in this proceeding, urging annulment. He maintains that the respondent has failed to show that the notice of deficiency was mailed to him; that he was not a "person” required to collect and pay over withholding taxes due for a corporation, and that he did not "willfully” fail to collect and pay over the taxes due.
The statute provides that a notice of deficiency shall be mailed by certified or registered mail to the taxpayer (Tax Law, § 681, subd [a]). This issue, however, was not raised before the hearing officer. The only reference to the mailing of the notice of deficiency was petitioner’s answer "I honestly don’t recall” to a question inquiring whether he had received a letter dated April 3, 1975 (notice of deficiency). As a general rule objections not raised at the hearing or board level may not be raised for the first time in the application for judicial review (see Matter of Consolidated Edison Co. of N. Y. v State Bd. of Equalization & Assessment, 60 AD2d 356, 359). Petitioner’s reliance on Matter of MacLean v Procaccino (53 AD2d 965) is misplaced since in that case there was no administrative hearing and the petitioner was raising the issue at the first opportunity. Consequently, the issue raised here for the first time will not be considered in this proceeding.
As to the second issue, the pertinent statute provides that "[a]ny person required to collect, truthfully account for, and pay over the tax imposed” who willfully failed to collect or pay over such tax shall be liable to a penalty equal to the amount of the tax evaded (Tax Law, § 685, subd [g]). Subdivision (n) of the same section defines the term "person” to include, inter alia, an officer or employee of a corporation who "is under a duty to perform the act in respect of which the violation occurs.” Such an issue is a factual one and, while we find no New York case on point, the question has been examined by the Federal courts in considering similar language in subdivision (b) of section 6671 of the Internal Reve
In his final contention, petitioner argues that he did not willfully fail to collect and pay over the taxes due and, therefore, he should not be subjected to the penalty imposed by subdivision (g) of section 685 of the Tax Law. In defining "willful” as used in this statute, the Court of Appeals recently adopted the Federal criterion used in interpreting a similar Internal Revenue Code provision (US Code, tit 26, § 6672) stating that the test is whether the act, default, or conduct is consciously and voluntarily done with knowledge that as a result, trust funds will be used for other purposes (Matter of Levin v Gallman, 42 NY2d 32, 34). The court further stated that no showing of intent to deprive the government of its money is necessary, only something more than accidental nonpayment is required (supra, p 34). In light of these principles petitioner cannot avoid liability by failing to concern himself with whether the taxes were being paid. There is substantial evidence in the record to support respondent’s determination and we should not disturb it (Matter of Liberman v Gallman, 41 NY2d 774).
Kane, Staley, Jr., Main and Mikoll, JJ., concur.
Determination confirmed, and petition dismissed, without costs.