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STATE OF NEW YORK STATE TAX COMMISSION

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					STATEOF NEWYORK

STATETAX COMMISSION

            In the Matter of the Petition
                          of
                  Charles H. Gross
                 and Norma S. Gross                       AT'TIDAVIT OF MAILING

for Redetermination of a Deficiency or a Revision
of a Detennination or a Refund of Personal fncome
Tax under Article  22 of the Tax Law for the Years
7967, 1968 & 7969.


State of New York
County of Albany

     Jay Vredenburg, being duly sworn, deposes and says that he is an employee
of the Department of Taxation and Finance, over 18 years of age, and that on
the 29th day of January, 1982, he served the within notice of Decision by certified
mail upon Charles H. Gross and Norma S. Gross the petitioner  in the within
proceedinB, bY enclosing a true copy thereof in a securely sealed postpaid
wrapper addressed as follows:

     Charles H. Gross
     and Norma S. Gross
     2 Tulips
     Roslyn Estates, NY   11576


and by depositing same enclosed in a postpaid properly addressed wrapper in a
(post office or official depository) under the exclusive care and custody of
the United States Postal Service within the State of New York.

      That deponent further says that the   said addressee is     petitioner
herein and that the address set forth o        d wrapper is t   last known
of the petitioner.


Sworn to before me this
29th day of January, 7982.
STATEOF NEWYORK
STATETAX COMMISSION

            In   the    Matter of the Petition
                               of
                        Charles H. Gross
                       and Norma S. Gross               AFFIDAVIT OF MAILING

for Redetermination of a Deficiency or a Revision
of a Determination or a Refund of Personal Income
Tax under Article  22 of the Tax Law for the Years
1967,1968 & L969.


State of New York
County of Albany

       Jay Vredenburg, being duly sworn, deposes and says that he is an employee
of the DepartmenL of Taxation and Finance, over 18 years of age, and that on
the 29th day of January, 1982, he served the within notice of Decision by
certified   mail upon Ralph Finerman the representative of the petitioner in the
within proceedinB, by enclosing a true copy thereof in a securely sealed
postpaid wrapper addressed as follows:

     Ralph Finerman
     Simonoff, Peyser & Cit.rin
     1515 Broadway
     New York, NY 10017


and by depositing same enclosed in a postpaid properly addressed wrapper in a
(post office or official depository) under the exclusive care and custody of
the United States Postal Service within the State of New York.

     That deponent further says that the said addressee is the representative
of the petitioner  herein and that the address set forth on said wrapper is the
last known address



Sworn to before me this
29Lh day of January, 1982.



4t        O,, *-                 u'z'
                                             S T A T E O F N E WY O R K
                                           STATE TAX COMMISSION
                                          A L B A N Y , N E WY O R K 1 2 2 2 7




                                                   January 29, 7982



Charles H. Gross
and Norma S. Gross
2 Tulips
Roslyn Estates, NY               77576

Dear Mr. & Mrs. Gross:

P l e a s e t a k e n o t i c e o f t h e D e c i s i o n o f t h e S t a t e T a x C o m m i s s i o ne n c l o s e d
herewith.

You have now exhausted your right of review at the administrative                       level.
P u r s u a n t t o s e c t i o n ( s ) 6 9 0 o f t h e Tax Law, any proceeding in court to review an
adverse decision by the State Tax Commission can only be instituted                       under
Article        78 of the Civil Practice Laws and Ru1es, and must be comrnencedin the
Supreme Court of the State of New York, Albany County, within 4 months from the date
of this notice.

Inquiries       concerning the computaLi.on of Lax due or refund allowed in accordance
with this       decision may be addressed to:

                                    NYS Dept. Taxation and Finance
                                    Deputy Commissioner and Counsel
                                    Albany, New York 12227
                                    Phone /l (518) 457-624a

                                                                          Very truly        yours,



                                                                          STATE TAX COMMISSION


       PeLiLioner' s RepresenLaLive
       Ralph Finerman
       Simonoff, Peyser & Citrin
       1515 Broadway
       New York, NY 10017
       Taxing Bureau's Representative
STATEOF NEWYORK

STATETAX COMMISSION


             In the Matter   of the Petition

                             of

    CHARTESH. GR0SSand NORMAS. GROSS                                     DECISION

for Redetermination of a Deficiency or
for Refund of Personal fncome Tax under
Article 22 of the Tax law for the Years
1967, 1968 and t969.


        Petitioners,      Charles H. Gross and Norma S. Gross, 32 The Intervale,                  Roslyn

Estates,      New York 11576, have filed         a pet.ition    for    redetermination    of a

deficiency       or for   refund of personal income taxes under Article              22 of the Tax

Law for the years 1967,1968 and 1969 (File No. 10635).

        A formal hearing was held before William               J. Dean, Ilearing 0fficer,        at the

offices      of the State Tax Commission, Two World Trade Center, New York, New

York'     on March 23, 7977 aL 1:30 P.X.           Petitioners        appeared by Ralph Finerman,

CPA. The Income Tax Bureau appeared by Peter Crotty,                      Esg. (Irwin    A. Levy,

Esq. , of counsel).

                                               ISSUE

        I^lhether, on the basis     of a net operating         loss carryback    from the year

1.970 petitioners
    '                     are entitled     to a full   refund of New York State personal

income tax for       the years 1967 , 1968 and L969.

                                         FINDINGS OF FACT

        1.    In 1970, petitioner,        Charles H. Gross, experienced a partnership               loss

in excess of $550,000.00.

        2.    On August 31, 1971, petitioners          submitted claims for       refund of

personal income tax for these years in these amounts:
                                                -2-


                                       1967 - $16,304.29

                                       1968 - $32,6L6.36

                                       1969 - $ 5,126.80

       3.    By Voucher for     Income Tax Refund No. 00101158, the Incone Tax Bureau

granted a refund of $12,309.99 for            1967 and $23,050.72 for 1968.         No refund was

granted     for   1969.    The "Explanation   of Refundt' on the voucher read in pertinent

part   as follows:        "Youtr claims for   refund based on a net operating          loss

carryback     from the year 1970 to the years         1967 and 1968 has been authorized              in

the adjusted amount computed below.            The 1969 claim may not be allowed as the

net operating       loss deduction is limited      to the Federal taxable       income, which

has been computed as a negative figure.tr

       4.    By letter     dated January 25, 1972, Louis Etlinger,         Chief,   Review Unit,

Income Tax Bureau, wrote as follows           to pet.itioners'      representatives:

             "The net operating loss deduction carryback for New York
       State income tax purposes is the same amount as that allowed for
       Federal purposes.
             rrThe net operating loss deduction allowed as a carryback
       may not reduce the Federal taxable income below zeto.
       Therefore, our computation indicates that the Federal taxable
       income for the year L967 was $123,099.86 and for the year 1968,
       $164r648.00. There vras a negative Federal taxable income for
       the year 1968 (sic), therefore, no net operating loss deduction
       can be allowed for the year 1969 and the amount of carryback to
       1967 and 1968 is limited to the Federal taxable income."
       5.   Clairns for refund of Federal taxes were approved by the Internal

Revenue Service for         the years 1967 and 1968.       No such claim was filed        for   the

year 1969 since the Federal income tax liability              for    that year vras zero.

                                               0F
                                     C0NCLUSIONS tAI4/

       A.    That the amount of net operating         loss and the portion      thereof

allowable     as a deduction in each of the carryback years is determined in

accordance with       the provisions    of the Internal     Revenue Code.      The portion      of

the net operating         loss allowable   as a carryback deduction is limited            (under
                                                -3-


section      I72(b)(2)   of the Internal    Revenue Code) to the amount of the modified

taxable      income conputed Lhereunder,      and this    modified   taxable   income for   such a

year may not be less Lhan zero.            The portions    of the net operating     loss allowed

as deductions in the carryback years were deductions used in recomputing

petitioner's      Federal adjusted gross income for said years.            Therefore, the

amounLs allowed as carryback deductions for Federal income tax purposes would

also be the amounts permitted          for New York State     income tax purposes within      the

meaning and intent        of Article   22 of the Tax law.      The Tax Law makes no

provision     which would allow a net operating          loss deduction or carryback or

carryover      deduction,   which would exceed the allowance for Federal income tax

purposes.       (See JamesH. Sheils et al        v. State Tax Comqission, 52 N.Y.2d 954,

Rev'g 72 A,D.2d 896; Uatter of David Berg, State Tax Conmission Decision

April    17, 1981).

        B.   That the petition     and claims for     refund of Charles H. Gross and

Norma S. Gross are denied and the Notice of Partial              Refund Disallowance dated

April    10, 1972 is sustained.


DATED: Albany,       New York                                    COMI'TISSION
JAN 91982
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                                    S T A T E O F N E WY O R K
                                 STATE TAX COMMISSION
                                A L B A N Y , N E WY O R K 1 2 2 2 7




                                      January 29, 1982



Charles H. Gross
and Norma S. Gross
2 Tu1ips
Roslyn Estates, NY      11576

Dear Mr. & Mrs. Gross:

Please take notice     of the Decision of the State Tax Commission enclosed
herewith.

You have now exhausted your right of review at the administrative                       level.
P u r s u a n t t o s e c t i o n ( s ) 6 9 0 o f t h e Tax Law, any proceeding in court to review an
adverse decision by the State Tax Commission can only be instituted                       under
Article        78 of the Civil Practice Laws and Rules, and must be comrnencedin the
Supreme Court of the State of New York, Albany County, within 4 months from the date
of this notice.

Inquiries   concerning the computation of         tax   due or   refund   allowed   in   accordance
with this   decision may be addressed to:

                          NYS Dept. Taxation and Finance
                          Deputy Commissioner and Counsel
                          Albany, New York 12227
                          Phone /l (518) 457-6240

                                                        Very truly     yours,



                                                         STATE TAX COMMISSION


cc:   Petitioner's Representative
      Ralph Finerman
      Simonoff, Peyser & Citrin
      1515 Broadway
      New York, NY 10017
      Taxing Bureau's Representative
STATEOF NEWYORK

STATETAX COMMISSION


            In the Matter of the Petition

                              of

     CHARLES GR0SSand N0RMAS. GROSS
           H.                                                     DECISION

for Redetermination of a Deficiency or
for Refund of Personal Income Tax under
Article 22 of the Tax Law for the Years
1967, 1968 and 1969.


       Petitioners,      Charles H. Gross and Norma S. Gross, 32 The Intervale,           Roslyn

Estates, New York 11576, have filed           a petition    for redetermination    of a

deficiency      or for refund of personal income taxes under Article         22 of the Tax

Law for the years 7967, 1958 and 1969 (File No. 10635).

       A formal hearing was held before WiIIiam J. Dean, I{earing 0fficer,                at the

offices     of the State Tax Commission, Two !.Jorld Trade Center, New York, New

York, oo March 23, 1977 at 1:30 P.M.             Petitioners   appearedby Ralph Finerman,

CPA. The Income Tax Bureau appeared by Peter Crotty,               Esq. (Irwin    A. Levy,

E"q. , of counsel).

                                             ISSI]E

       ldhether, on the basis of a net operating loss carryback fron the year

1.970, petitioners       are entitled    to a full    refund of New York State personal

income tax for the years 1967, 1968 and 7969.

                                        FINDINGS OF FACT

       1.     In 1970, petitioner,      Charles H. Gross, experienced a partnersbip loss

in excess o f $ 5 5 0 , 0 0 0 . 0 0 .

       2.    On August 31, 1971, petitioners          submitted claims for refuad of

personal income tax for these years in these amounts:
                                             -2-


                                  1967 - $16,304.29

                                  1968 - $32,616.36

                                  1969 - $ 5,126.80

     3.   By Voucher for Income Tax Refund No. 00101158, the Income Tax Bureau

granted a refund of $121309.99for 1967 and $23,050.72 for 1968.                No refund was

granted for    1969.   The 'rExplaoation of Refund" on the voucher read in pertinent

part as follows:       "Your claims for refund based on a net operating loss

carryback from the year 1970 to the years 1967 and 1968 has been authorized in

the adjusted   amount conputed belor,r.     The 1969 claim may noL be allowed as the

net operating loss deduction is limited        t.o the Federal Laxable income, which

has been computed as a negative figure."

     4.   By letter    dated January 25,    7972, Louis Etlinger,      Chief, Review Unit,

Income Tax Bureau, \^/rote as follows      to petitioners'      representatives:

           "The net operating loss deduction carryback for New York
     Stat.e income tax purposes is the same amount as that allowed for
     Federal purposes.
           "The net operating loss deduction allowed as a carryback
     may not reduce Lhe Federal taxable income below zero.
     Therefore, our computation indicates that the Federal taxable
     income for the year 1967 was $123,099.86 and for the year 1968,
     $164,648.00. There r./as a negative tr'ederal taxable income for
     the year 1958 (sic), therefore, no net operating loss deduction
     can be allowed for the year 1969 and the amornt of carryback to
     1967 and 1968 is limit.ed to the Federal taxable income."
     5. Claims for refund of Federal taxes were approved by the Internal

Revenue Service for the years 1967 and 1968.          No such claim was filed        for the

year 1969 since the Federal income tax liability             for that year was zero.

                                CONCLUSIONS LAW
                                          OF

     A.   That the amount of net operating loss and the portion            thereof

allowable as a deduction in each of the carryback years is determined in

accordance with the provisions     of the Internal     Revenue Code.      The portion    of

the net operating loss allowable as a carryback deduction is limited               (under
                                                               -3-


section       172(b) (2) of the Internal                Revenue Code) to the amount of the modified

taxable income computed Lhereunder, and this                               modified taxable income for such a

year may not be less than zeto.                        The portions          of the net operating l-oss allowed

as deductions in the carryback years were deductions used in recomputing

petitioner's         Federal adjusted gross income for said years.                                  Therefore,        Lhe

amounts allowed as tarryback                    deductions for Federal income tax purposes would

also be the amounts permitted                     for New York Stat.e income tax purposes within                            the

meaning and intent             of ArticLe         22 of the Tax Law.               The Tax Law makes no

provision       which would allow a net operating loss deduction or carryback or

carryover deduction, whi"ch would exceed the allowance for Federal income tax

p u r p o s e s . ( s e e J a m e sH . s h e i l s e t a l       v. State Tax commission, 2 N.Y.2d 954,
                                                                                        5
R e v ' g 7 2 A . D . 2 d 8 9 6 ; M a t t e r o f D a v i d B e r g , S t a t e T a x C o m m i s s i o nD e c i s i o n

April     17, 1981).

        B.    That the petition              and claims for refund of Charles H. Gross and

Norma S. Gross are denied and the Notice of Partial                                   Refund Disallowance dated

April     10, 1972 ts sustained.


DATED: Albany, New York                                                               COMMISSION
,lAl!2r 1982
(r,-
                                                                                F


       STATEOF MId YORK

       STATETAX COM},IISSION

                   In the Matter of the Petition
                                 of
                        Henry M. Gross, Jr.
                     and Catherine E. Gross                     AFFIDAVIT OF MAITING

       for Redetermination of a Deficiency or a Revision
       of a Determination or a Refund of Personal Income
       Tax under Article 22 of the Tax law for the Year
       1975.


       State of New York
       County of Albany

             Jay Vredenburg, being duly sworn, deposes and says that he is an employee
       of the Department of Taxation and Finance, over 18 years of age, and that on
       the 20th day of August, 7982, he served the within notice of Decision by certified
       mail upon Henry M. Gross, Jr.,and Catherine E. Gross the petiti-oners in the
       within proceedinS, by enclosing a true copy thereof in a securely sealed
       postpaid wrapper addressed as follows:

            Henry M. Gross, Jr.
            and Catherine E. Gross
            c/o Charles H. Fish
            Arthur Andersen & Co.
            1345 Avenue of the Americas
            New York, NY 10019

       and by depositing same enclosed in a postpai.d properly addressed wrapper in a
       (post office or official  depository) under the exclusive care and custody of
       the United St.ates Postal Service within the State of New York.

             That deponent further says that the said addressee is the petitioner
       herein and that the address set forth o n s a i d          the last. known address
       of the peLitioner.


       Sworn to before me this
       20th day of August, 7982.
                     \._-^__   !l


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