Being at the center of the financial universe, New York City often sees an influx of foreign executives coming to work in the city for temporary purposes. Large foreign operations regularly send personnel to work in the United States to learn about U.S. business, train personnel, develop market segments, and so forth. Many of these executives expect to return to their home country at the conclusion of their U.S. assignments.

Historically, those taxpayers took the position - under a special regulation applicable to taxpayers in New York on "temporary assignment" - that they were nonresidents of New York state and city, regardless of the amount of time they spent in New York during the year. Up until recently, that treatment was respected by auditors, and even blessed in rulings published by the Department of Taxation and Finance. But the rules - or at least the tax department's interpretation of them - have changed. Now the tax department takes a more stringent view of the temporary assignment rules and has coupled that shift in policy with an increased focus on the issue in residency audits. That has obviously affected expatriates and immigrants coming to work in New York for foreign employers or U.S. branches of international companies. Of course, it has also had an effect on tax practitioners, who are seeing this issue raised in more and more audits of their clients.

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