A New York State ALJ has set aside the maximum penalties imposed by the Department of Taxation and Finance on an alcoholic beverage wholesaler for failing to file information returns, and reduced the penalties to the statutory minimum. Matter of Carousel Beverage Corp., DTA No. 826388 (N.Y.S. Div. of Tax App., Oct. 20, 2016). The ALJ found that, based on a legitimate concern about transmitting valuable client information over the Internet, the vendor had tried to present all of the records and information for review in person, but the Department would only permit submission of the information electronically. Since the Department had not only failed to make a proper request for records, but had actually affirmatively refused to review records, the ALJ found that the maximum penalties of $50,000 lacked a rational basis and must be cancelled, and instead imposed the minimum penalties of $500 per return. This is the second decision within two months in which an ALJ has set aside as improper the imposition of maximum penalties for failure to file information tax returns due from alcoholic beverage wholesalers.