Deadline Alert: You have 90 days from the date on your Notice of Determination (NOD) to appeal. Miss it and you lose your right to fight.
When a New York State sales tax audit turns into a Notice of Determination, the penalty line is often what hurts most. The good news: the Bureau of Conciliation and Mediation Services (BCMS) is designed to give you a second chance — and, done right, it can wipe out penalties entirely.
Since 2021, our team has seen penalties removed in roughly 80% of New York cases we’ve handled. That isn’t luck. It’s a repeatable process that blends procedure, preparation, and a practical settlement plan. Below is the same playbook we use for business owners, CFOs, controllers, and CPAs who want to make BCMS work for them.
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- The 90-Day Deadline
You have 90 days from the date on the NY NOD to file a BCMS appeals Request for Conciliation Conference.
BCMS is essentially New York’s version of “Let’s try to settle this before we go to court.” It’s not a trial. There’s no judge in a robe. Instead, you get a conciliation conferee — someone who works for the state but is charged with finding a sensible middle ground.
That means they’re willing to listen. They can reduce penalties. They can adjust the audit method if it was flawed. And they can recommend a resolution that works for you and the state.
Miss it and the assessment becomes final. There are no do-overs. Interest keeps ticking until the tax is paid, so every week you wait is money out of pocket. The safest way to think about the timeline is this: day 1 is today. Work backward from your personal capacity and complexity of the assessment, and choose one of three paths to make sure you file on time.
- DIY (you file): complete the Request for Conciliation Conference, attach NY NOD copies, and keep proof of timely filing (online acknowledgment, fax confirmation, or certified mail). Calendar follow-ups and the conference date. Best for narrow issues with organized records.
- Guided (co-pilot): we provide templates and timelines, you draft your Request for Conciliation Conference and reasonable-cause narrative, and we review and coach your conference talking points. You gather documents. You can remain the primary contact with BCMS to handle your conciliation conference with a coach on your teams.
- Full representation (done-for-you): we handle the Request for Conciliation Conference, all BCMS communications, evidence curation, the conference presentation, and settlement paperwork, ideal for high-dollar or technical matters (sampling disputes, marketplace facilitator exposure, responsible-person claims). You focus on operations; we drive the result.
Whichever path you pick, commit to one rule: do not miss the 90-day deadline. File first, refine your arguments second. You can and should continue building your case after the Request for Conciliation Conference is safely in. With a timely filing and solid plan, it’s a great start to eliminating your NYS sales tax audit and penalties.
- How to File and Why a POA Matters
BCMS accepts Request for Conciliation Conferences in several ways. You can file online through your NY tax account, fax the Request for Conciliation Conference, or submit it by mail or hand delivery. The content is the same regardless of method: the Request for Conciliation Conference form (or the online equivalent), identification of each notice you are protesting, and a short statement of the issues. What changes with each method is proof of timely filing. Online filings generate immediate acknowledgments. Fax creates a confirmation sheet. Certified mail gives you a postmarked receipt. Use the channel you are certain you can document. Here is exactly how and where to file:
- Online: log in to your NYS Online Services business account and select Respond to Department Notice, then Request a Conciliation Conference (BCMS). Save the on-screen acknowledgment as proof of timely filing.
- Fax: 518-435-8554. Include the Request for Conciliation Conference (CMS-1-MN or online equivalent) and clear copies of every NY NOD you are protesting. Keep the fax confirmation page.
- Mail or hand delivery: Bureau of Conciliation and Mediation Services (BCMS), W A Harriman Campus, Albany, NY 12227. Use certified mail (keep the receipt) or hand-deliver and request a date-stamped copy for your records.
If you are a sales tax lawyer or a tax professional filing for a business, you need a signed power of attorney. Without a POA on file, the state will not speak with you about the case details, and you may miss critical scheduling or settlement opportunities. For business owners handling their own matter, no POA is required, but you can designate a representative at any time—so long as you do it early enough that the conferee has the authorization before your conference date.
Practical filing tips that prevent headaches: include legible copies of the NY NOD pages, keep all pages in a single PDF if you file electronically, list every assessment period you intend to contest, and keep a hard copy set of your Request for Conciliation Conference package in a BCMS folder. Label it with the filing date and the method used so anyone on your team can answer basic questions if BCMS calls.
- What Happens After You File (And How to Use This Window)
Within a short period after filing, you receive an acknowledgment assigning your case number. The audit division is notified, and it’s common to get a call from the auditor or a supervisor to discuss early resolution. You are not required to settle before the conference, but these calls can be useful reconnaissance. Ask what the state sees as the sticking points. Note which issues they emphasize. That tells you how to prioritize your preparation.
BCMS will then schedule your conciliation conference and give you adequate notice. Most are held by phone or video; in-person is also possible. You will receive the name of the conferee, the date and time, and instructions. Use the lead time to assemble your evidence. Organize invoices, exemption certificates, POS reports, bank records, and any third-party statements that support your position. Create a clean timeline showing what happened and when—software changes, management turnover, hurricane damage, ransomware, new CPA engagement, marketplace facilitator changes. Conciliators respond to organized facts.
Two points often overlooked during this period can change outcomes.
First, if interest is mounting and cash flow allows it, consider a voluntary payment toward tax only. It reduces interest accrual and signals good faith without conceding the case.
Second, if your records are still being reconstructed, ask the conferee to hold the record open after the conference so you can submit follow-up documentation. That is a normal request and, when granted, gives you a safe runway to shore up any gaps.
Reach out to our team and send us your NOD and workpapers if you need assistance evaluating your conciliation options
- Inside the Conference: Preparation, Arguments, and the Settlement Ask
Preparation, preparation, and more preparation. That is the difference between a quick denial and a fast win. Draft a short opening statement that explains who you are, what your business does, and why the assessment’s penalty line is not warranted. Your argument should cover three lanes: legal, equitable, and procedural.
Legal means statutes and rules. For example, penalties require a level of fault. If the underpayment arose from questions on the law, like the taxability of bundled transactions, whether certain services are taxable, or other disagreements on legal interpretations, it’s a legal argument that can save the day. Point to your internal controls, clean filing history, and credible documentation as evidence of reasonable cause.
Equitable arguments center on fairness and more emotional concepts. In other words, the real-world consequences. Show why waiving penalties makes the balance collectible without disrupting payroll, rent, or vendor relationships.
Procedural means how the audit was done. For instance, if the incorrectly used block sampling, due process issues, missed their deadlines, or overstepped the law, you can win on procedure. If the state used a peak-season block sample, ignored seasonality, or overlooked revised records you later provided, lay that out clearly.
Most conferences last an hour or less. Treat the time like a focused business meeting, not a trial. Bring a reasonable solution with you. A common, successful structure is this: pay the tax you agree with, accept statutory interest, and request full penalty removal in exchange for quick payment or a short installment plan. Another path is a partial penalty concession tied to specific documentation you commit to provide within a set number of days. The conferee’s mandate is to resolve cases sensibly. If the offer on the table gets the assessment paid while keeping the business stable, you are speaking their language.
Finally, you can leave the record open. If additional records are needed—missing resale certificates, corrected POS reports, revised sales summaries—ask for a deadline to submit them. Deliver exactly what you promise, in the format the conferee prefers, and confirm receipt. Follow-through is often what closes the loop on a full penalty waiver.
- Outcomes and What To Do Next
There are three common outcomes. First, you and the state reach agreement and sign a consent. Pay the agreed amount and the case is done. Second, you do not agree on every point, but the conferee believes further adjustment is not warranted; you receive a conciliation order. Third, you settle part of the case and leave a discrete issue for the Division of Tax Appeals if necessary.
If you receive a consent that reflects your negotiated result, review the periods and amounts carefully before signing. Ensure the payment terms are realistic. If you need an installment plan, coordinate it immediately with the collections unit so there is no gap between the agreement and the first payment. If the consent is not acceptable, do not sign it; instead, wait for the conciliation order and preserve your right to elevate the matter to a tax judge. You have another 90 days to Request for Conciliation Conference the Division of Tax Appeals. That second forum allows for discovery, witness testimony, and a fresh look at penalties—many taxpayers prevail on penalties even when some tax remains due.
In all scenarios, keep your future compliance front and center. Conferees and judges are far more receptive when you can show that the cause of the original problem is fixed: POS tax rates corrected, exemption-certificate procedures tightened, marketplace facilitator settings verified, or a new CPA engagement in place. Prospective compliance is both persuasive and practical.
- Case Study: Upstate HVAC Company
A regional HVAC contractor came to us after receiving a NY NOD that proposed six figures of tax, plus negligence and late-payment penalties. The audit relied on a peak-season block sample and flagged several jobs that were actually capital improvements but were treated as taxable. We filed the BCMS Request for Conciliation Conference immediately to lock in the deadline, then built the record.
At conference, we led with a two-part narrative. First, we showed a three-year sales and job-mix trend that proved the sampled quarter was not representative. Second, we walked through project folders for several large jobs, including contracts, before-and-after photos, and payment draws, demonstrating capital improvement status under New York rules. For penalties, we presented an internal control memo, CPA correspondence confirming configuration fixes in the accounting system, and a plan to pay any recalculated tax within six months.
Result: the conferee agreed to a lower projection, producing a $20,000 tax reduction, and removed the entire penalty line, eliminating an additional $30,000. The contractor stayed bankable and on schedule for a key municipal project bid.
- Eliminate New York Sales Tax Penalties Through Conciliation
BCMS is where penalty strategy becomes real. The broader New York sales-tax penalties landscape includes negligence, failure-to-file or pay, fraud, responsible-person assessments, and trust-fund collection penalties. What unifies them is the requirement that the state show fault and the taxpayer show reasonable cause. The pillar guide explains each penalty, the triggers that make auditors reach for them, and the reasonable-cause defenses that actually work. Your BCMS case is the proving ground for those defenses. If you understand which penalty applies, why it was asserted, and which facts in your business story counter that penalty, you walk into conciliation with leverage. That is how you translate doctrine into dollars saved.
- Conclusion and Key Takeaways
BCMS is not a formality. It is the fastest, most cost-effective way to erase penalties from a NY NOD. The path is simple, but it requires discipline. File within 90 days, choose the right level of help, prepare relentlessly, present legal and equitable reasons to remove penalties, and offer a practical plan to pay the tax and interest. Do those things and you tilt the odds hard in your favor.
Key takeaways
- Do not miss the 90-day protest deadline. File first; keep building your case after.
- Pick the right model: DIY for narrow issues, guided for shared workload and expertise, or full representation when the stakes are high.
- File in the way you can best document, and use a POA if you are a lawyer or tax professional representing a business.
- Prepare for the conference like a business presentation: short opening, organized exhibits, and a reasonable settlement ask.
- Most conferences last an hour or less; you can request the record be left open to submit follow-up documents.
- Aim to pay tax and interest, and request a full penalty waiver tied to swift payment or a short plan.
- If needed, preserve your rights and take the penalty issue to the Division of Tax Appeals for a fresh review.
- Since 2021, we’ve seen penalties removed in roughly 80% of New York cases we’ve handled. With the right preparation, yours can be one of them.
If a NY NOD is on your desk today, move quickly. Decide whether you want to run DIY, go guided, or hand it off. Then file the Conciliation Conference request, organize your story, and let us help you turn BCMS into a win.