When a bank amends its federal return (not involving a net operating loss or capital loss carryback) and files a timely New York refund claim, does New York's 90-day interest cutoff for late-filed amended returns still apply even though the bank never separately sent a copy of the federal refund approval form to New York State?

Subject

Whether interest payable on a refund claim filed for the taxable year ended December 31, 1978 is limited by Tax Law § 1087(c).

Plain-English summary

In 1981, Banco Hispano Americano amended its 1978 federal income tax return to change how it computed an interest expense deduction, which reduced its taxable income and entitled it to a federal refund — not based on a net operating loss or capital loss carryback, just a straightforward recomputation. At the same time, the bank filed matching refund claims with New York State (Form CT-8) and New York City. The IRS approved the federal refund via Form 4188, issued November 9, 1981. A copy went to New York City in 1983, but the bank had no record of ever sending a copy to New York State. Years later, New York approved the refund but only paid interest up to 90 days after the date the federal Form 4188 was issued — cutting off years of additional interest the bank believed it was owed.

New York's cutoff rule, Tax Law § 1087(c), limits interest on a refund if the taxpayer was required to report a federal change (like the amended return) to New York and didn't do so within 90 days — interest then stops accruing 90 days after the required report should have been filed. The bank argued it had already satisfied its filing obligation: it filed its CT-8 refund claim with New York within 90 days of filing the federal amended return itself, which is a different, earlier trigger than the 90-day requirement tied to the federal approval. Critically, because the refund claim didn't involve a net operating loss or capital loss carryback, the CT-8 form in effect at the time only required submission of the federal Form 4188 in carryback cases — not here.

The Department agreed with the bank. Since Banco Hispano Americano is a banking corporation taxed under Article 32 (not Article 9-A), the applicable "report federal changes" provision was Tax Law § 1462(e), not § 211.3 — but § 1462(e) works the same way, requiring an amended New York report within 90 days of filing a federal amended return. The bank's timely CT-8 filing satisfied that requirement. Because there was no additional obligation to separately submit the federal Form 4188 (no carryback was involved), the bank's failure to send that form to New York State didn't trigger the § 1087(c) interest cutoff. Interest on the refund accrues from the original 1978 return's due date all the way to the date the refund was actually issued — no 90-day cutoff applies.

What this means for you

Corporations and banks filing New York refund claims tied to a federal amended return

The 90-day clock that matters for avoiding the § 1087(c) interest cutoff runs from when you file your federal amended return, not from when the IRS later approves it — file your New York amended report/refund claim (Form CT-8 for corporations, or the applicable Article 32 equivalent) within 90 days of the federal amended filing, and you should be covered regardless of when the IRS's approval eventually arrives.

Refund claims that don't involve a carryback

If your refund claim doesn't stem from a net operating loss or capital loss carryback, check whether the refund form in effect at the time actually requires submitting the federal approval document (like Form 4188) — this ruling found it didn't for non-carryback claims, which meant the missing copy to New York State was irrelevant to the interest calculation.

Accountants and tax professionals

Note the Article 32-specific citation chain: Tax Law § 1468 pulls Article 27's general provisions (including § 1087(c)) into Article 32 "as if" written into it, and § 1462(e) is the Article 32 analog to Article 9-A's § 211.3 federal-change reporting requirement. Don't assume § 211.3 applies directly to a banking corporation — trace through § 1468 and § 1462(e) instead.

Common questions

Q: Does the 90-day interest cutoff run from the federal amended return filing or from the IRS's approval of it?
A: From the federal amended return filing. Filing a timely New York amended report/refund claim (like Form CT-8) within 90 days of the federal amended filing satisfies the requirement, regardless of when the federal approval is later issued.

Q: Do I need to send New York a copy of the federal refund approval form (Form 4188)?
A: Only if the refund claim involves a net operating loss or capital loss carryback — the CT-8 form in effect here required Form 4188 submission only in carryback cases.

Q: Can another bank or corporation rely on this ruling?
A: No. This advisory opinion binds the Department only for the taxpayer and facts presented, and cannot be relied on by anyone else.

Citations and references

Statutes and regulations:

• Tax Law § 1087(c) (Article 27, interest limitation tied to required amended-return filing)
• Tax Law § 1462(e) (Article 32 requirement to report federal changes/file amended returns within 90 days)
• Tax Law § 1468 (Article 27 provisions apply to Article 32)
• Tax Law § 211.3 (Article 9-A analog requirement, not applicable to this banking corporation)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/corporation_ao_1989.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/corporation/a89_6c.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-89(6)C
Corporation Tax
May 16, 1989

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. C890126A

On January 26, 1989, a Petition for Advisory Opinion was received from Banco Hispano
Americano, 645 Fifth Avenue, New York, New York 10022.
The issue raised is whether interest payable on a refund claim filed for taxable year ended
December 31, 1978 is limited by section 1087(c) of the Tax Law.
During 1981, Petitioner amended its 1978 federal income tax return to change the method
used in computing the interest expense deduction. This change reduced taxable income and
Petitioner requested a refund of tax. The refund claim did not involve a net operating loss carryback
or a capital loss carryback. At the same time, refund claims were filed with New York State (Form
CT-8) and New York City. Federal Form 4188 approving the federal refund was issued on
November 9, 1981. A copy of this form was forwarded to New York City on June 2, 1983, but
Petitioner has no record of a copy being sent to New York State. New York State has subsequently
approved the refund but has only allowed interest on the refund to accrue up to a date 90 days after
the date the federal Form 4188 was issued.
Petitioner states that it satisfied the requirements of section 211.3 of the Tax Law by filing
Form CT-8 with New York State within 90 days of the filing of the federal amended return.
Petitioner contends that since the amended return did not involve a net operating loss carryback or
a capital loss carryback, the allowance of the federal claim as evidenced by the issuance of Form
4188 did not constitute a final determination as defined in section 211.3 or section 6-1.3 of the
Business Corporation Franchise Tax Regulations.
Therefore, Petitioner contends that it was not required to notify New York State within 90
days of the receipt of federal Form 4188. Thus, Petitioner feels that section 1087(c) of the Tax Law
should not act to limit the interest paid on the New York State refund claim.
Section 1087(c) of Article 27 of the Tax Law provides that
[i]f a taxpayer is required by subdivision three of section two hundred
eleven, or by section two hundred nineteen-bb or by section two
hundred nineteen-zz, to file a report or amended return in respect of
... a decrease ... in federal taxable income ... or federal tax ... which is
treated in the same manner as if it were an overpayment for federal
income tax purposes, claim for credit or refund of any resulting
overpayment of tax shall be filed by the taxpayer within two years
from the time such report or amended return was required to be filed
with the [Commissioner of Taxation and Finance]. If the report or
amended return required by subdivision three of section two hundred
eleven, or by section two hundred nineteen-bb or by section two
hundred nineteen-zz, is not filed within the ninety day period

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TSB-A-89(6)C
Corporation Tax
May 16, 1989

therein specified, interest on any resulting refund or credit shall cease
to accrue after such ninetieth day ....
Petitioner is a banking corporation and is subject to franchise tax under Article 32 of the Tax
Law. Therefore, section 211.3 of Article 9-A of the Tax Law is not applicable to Petitioner.
However, section 219-bb of Article 9-B and section 219-zz of Article 9-C, the predecessors to
Article 32, are analogous to section 1462(e) of Article 32.
Section 1462(e) of Article 32 provides that
[i]f the amount of taxable income ... for any year of any taxpayer as
returned to the United States treasury department is changed or
corrected by the commissioner of internal revenue or other officer of
the United States or other competent authority, such taxpayer shall
report such change or corrected taxable income ... within ninety days
after the final determination of such change or correction or as
required by the [Commissioner of Taxation and Finance], and shall
concede the accuracy of such determination or state wherein it is
erroneous. Any taxpayer filing an amended return with such
department shall also file within ninety days thereafter an amended
return with the [Commissioner of Taxation and Finance] ....
Section 1468 of Article 32 provides that the provisions of Article 27 apply to Article 32 in
the same manner and with the same force and effect as if the language of Article 27 has been
incorporated in full into Article 32 and had expressly referred to Article 32 except to the extent that
any such provision is either inconsistent with a provision of Article 32 or is not relevant to Article
32.
Therefore, section 1087(c) of Article 27 should be read as if section 1462(e) were included
in the references to section 211.3, section 219-bb and section 219-zz.
Herein, Petitioner states that it filed an amended return for federal income tax purposes and
at the same time filed a Claim for Credit or Refund of Corporation Tax Paid - Form CT-8 for New
York State franchise tax purposes. The filing of the CT-8 fulfilled the requirement of section 1462(e)
of Article 32 that when an amended return is filed for federal income tax purposes an amended report
must be filed within 90 days for New York State franchise tax purposes. In addition, Form CT-8
(1/81) required the submission of federal Form 4188 only when the claim was based on a net
operating loss carryback or a capital loss carryback.
Therefore, for purposes of section 1087(c) of the Tax Law, the limitation on interest accrual,
attributable to the failure to file an amended report as required by section 1462(e) of Article 32, does
not apply in this case.

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TSB-A-89(6)C
Corporation Tax
May 16, 1989

Accordingly, interest on the refund allowed for taxable year ended December 31, 1978 should
accrue from the due date of the original report to the date the refund was issued.

DATED: May 16, 1989

s/FRANK J. PUCCIA
Director
Technical Services

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.