§ 5-07 Revocation of Tax Exemption/Tax Abatement for Failure to Substantiate Claimed Costs and Declaratory Rulings.
RCNY § 5-07
(a)[Reserved.] (b) [Reserved.] (c) [Reserved.] (d) [Reserved.] (e) Revocation or reduction of tax exemption and tax abatement for failure to substantiate claimed costs. All applications are subject to post-audit by HPD.
(1)In addition to the basis for revocation of tax benefits provided in chapter thirty-nine of this title, the Commissioner may reduce or revoke past or future tax exemption or tax abatement if he or she finds that the application for tax exemption or tax abatement, including all affidavits submitted in connection with the application, contains a false statement or false information as to a material matter or omits a material matter relating to claimed costs. It is the responsibility of the recipient of the benefits, whether the original applicant or any subsequent owner, including any condominium or cooperative, to document all claimed costs in a manner acceptable to HPD and in accordance with generally accepted auditing standards so that original checks or such other proof of payment as the Office shall require can be properly matched against the items on the Itemized Cost Breakdown Schedule and so that the auditors may examine original documentation for the cost of all supplies and the cost of all subcontracts. If a recipient of tax benefits hereunder fails to substantiate claimed costs to the satisfaction of HPD, the CRC shall be reduced or revoked as applicable. In the event that HPD determines on the basis of the total available evidence that the application contains a false statement or false information as to a material matter, or omits a material matter, relating to claimed costs, all benefits hereunder shall be revoked.
(2)Tax benefits will not be revoked for failure to substantiate the amount of claimed costs after the expiration of six years from the later of the date of the approval of the Certificate of Eligibility and Reasonable Cost as stated therein or the date upon which the tax benefits commence, except that (1) where an audit has been initiated within the six-year period, but a final determination has not been rendered, or (2) where the applicant has not made payment in full for the work comprising the project within two years after the applicant has collected the Certificate of Eligibility, then such benefits may be revoked subsequent to such six year period.
(3)All books, records and documents, which in accordance with generally accepted auditing standards, may be used to substantiate entries in the applicant's books and records relating to claimed costs, shall be kept at all times available for inspection by the Office and shall be retained for a period of at least six years from the later of the date of the approval of the Certificate of Eligibility and Reasonable Cost as stated therein or the date upon which the tax benefits commence except that (1) where an audit has been initiated and a final determination has not been rendered, such records shall be retained until such determination has been made and (2) where an applicant has entered into an installment arrangement with respect to payment for work comprising all or a part of the project, such records shall be retained until the later of (i) three years from the date on which the applicant collects the Certificate of Eligibility and Reasonable Cost, and (ii) one year following payment in full for the work comprising the project.
(4)If an institutional lender has become a successor in interest to the original owner of such building or structure, and, after diligent efforts to obtain original contracts, checks and other records normally reviewed by the Office to verify claimed costs, is unable to obtain part or all of such records, the Office shall permit the substitution, in whole or in part, of documentation certified by the institutional lender showing the amounts advanced by the institutional lender pursuant to the mortgage loan to finance such alterations or improvements along with such other documentation as the Office may require.
(5)The revocation of tax exemption and/or abatement for failure to substantiate claimed costs hereunder shall be conducted in accordance with the procedures established pursuant to chapter thirty-nine of this title. Notwithstanding the foregoing, if, after HPD delivers an Initial Notice in accordance with chapter thirty-nine of this title, the Taxpayer fails to submit documentation to substantiate claimed costs during the Comment Period as defined in such Initial Notice, HPD shall deliver a Determination Notice to the Taxpayer in accordance with such chapter.
(f)[Reserved.] (g) [Reserved.] (h) [Reserved.] (i) Declaratory rulings. A declaratory ruling with respect to an analysis of a specific or hypothetical site, project, fact pattern or document or an interpretation of the applicability of a specific provision of § 489 of the Real Property Tax Law or § 11-243 of the Administrative Code or these rules to an actual or hypothetical site, project, fact pattern or document or any other issue related to eligibility may be given in the discretion of the Office upon payment of a non-refundable fee in the amount of seven hundred fifty dollars ($750) payable at the time such declaratory ruling is requested in writing. In no event shall a declaratory ruling bind the Office as to the overall eligibility of a project for J-51 benefits. At the discretion of the Commissioner, this fee may be waived for projects supervised or funded by HPD or any other New York City or New York State agency or instrumentality.
(j)[Reserved.] (k) As provided in 28 RCNY 39-03, the revocation of benefits for noncompliance with the Act or this chapter shall not exempt any unit from continued compliance with the requirements of the Act or this chapter.
