Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group members Chris Doyle, Peter Calleri, and Zoe Peppas. The weekly reports are intended to go out every Tuesday after the New York State Division of Tax Appeals (DTA) publishes new ALJ Determinations and Tribunal Decisions. In addition to the weekly reports, TiNY may provide analysis of and commentary on other developments in the world of New York tax law.

Subscribe Here to Never Miss a TiNY Blog

Blog Disclaimer

TiNY Report for July 11, 2023
NY state flag and the word TAXES made out of money

A Tribunal Decision and an ALJ Determination were posted last week. 

With respect to the Tribunal decision, in its write-up of the ALJ’s determination, TiNY provided the Tribunal with a road map to reverse what seemed to me to be (with due respect to the ALJ) an errant grant of summary determination. But, I guess my analysis was wrong (hey, it happens). 

Tribunal Decision:

Matter of Glynn, June 29, 2023; Div’s Rep., Colleen McMahon, Esq.; Pet’s Rep., Christopher LaBarbiera, CPA; Article 22.

Here’s what I wrote last November when summarizing the ALJ’s determination:

The Judge granted summary determination in favor of the Division after determining that Petitioner had spent more than 183 days in New York in 2017, and that the apartment Petitioner rented on an annual basis from June 28, 2016, to June 30, 2017, and then from July 1, 2017, to June 30, 2018, constituted a “permanent place of abode” in New York for 2017. Here is what appears to me to be the entirety of the facts upon which the Judge determined that the apartment was a permanent place of abode: “A copy of the lease reflects a lease term of one year that began on June 28, 2016, to June 30, 2017. Petitioner renewed his lease for one year, beginning July 1, 2017, through June 30, 2018. Under the lease, he was the sole occupant of the apartment. The apartment has water, sewer, and heat that is included in the amount of rent paid monthly. Petitioner was responsible for paying for electricity used to operate all appliances within the apartment, as well as costs for phone and cable. Petitioner was responsible for maintaining the apartment throughout the lease period.” And “petitioner conceded that his apartment was used by him in excess of 183 days during the year 2017. His apartment is located in close proximity to his work location on East 11th Street. Petitioner had a legal right to occupy the apartment as his residence and he exercised that right by securing an initial one-year lease and then opted to renew it for another one-year term.”

Summary determination is only supposed to be available when all the material factual issues are settled. In Matter of Obus v New York State Tax Appeals Trib., 206 AD3d 1511 (3d Dept 2022) (a case cited by the Judge), the Appellate Division, Third Department, ruled that whether an abode constituted a permanent place of abode depended, in part, on whether the taxpayer maintained a residential interest in the property:  “Significantly, there must be a showing that the taxpayer has a residential interest in the property, which is a fact-intensive inquiry.” And, “[t]o properly determine the taxpayers’ residential interest, it is imperative to consider a variety of factors, including the nature and duration of the use [citations omitted], which inherently involves a subjective analysis of the taxpayers’ use.”

Inasmuch as the determination has no analysis—none whatsoever—of how Petitioner used the New York apartment, it seems to me that the issue of whether it constituted a permanent place of abode is not resolved. Did he sleep there? Did he use the closets or did he live out of a suitcase for two years?  Was there a kitchen that Petitioner used? Did he entertain there? Bathe there? I understand that the petitioner has the burden of proof, but aren’t areas of uncertainty to be construed in favor of the party who did not move for summary determination (here, Petitioner)?

I am not saying that the apartment wasn’t a permanent place of abode for this taxpayer. I am simply saying that, in my opinion, the answer to the question is not at the level of certainty required to support a summary determination without a hearing.   

The Tribunal sustained the ALJ’s determination. And I really don’t get it. The Tribunal’s statement of the applicable standards is spot-on (with the citations to authority removed):

For statutory residency purposes, a permanent place of abode is “a dwelling place of a permanent nature maintained by the taxpayer, whether or not owned by such taxpayer ... .” Such a dwelling must have the physical characteristics ordinarily found in a dwelling suitable for year-round habitation. Additionally, the taxpayer must have a “residential interest” in the property. This means that “[t]he taxpayer must have utilized the dwelling as his or her residence; maintaining a dwelling that could be a permanent place of abode is not enough to establish status as a statutory resident.” The determination of a residential interest necessarily involves a subjective analysis of the taxpayer’s use of the dwelling, including the nature and duration of such use. Maintaining a place of abode involves “doing whatever is necessary to continue one’s living arrangements in a particular place.”

I couldn’t agree more! The proper analysis requires a subjective analysis of the taxpayer’s use of the dwelling. And what is missing from the Tribunal’s decision and the ALJ’s determination? Any facts regarding the how Petitioner used his NYC apartment!    

Again, if Petitioner’s use of the apartment indicates Petitioner had a residential interest in the apartment, then the correct result was obtained.  But, based on what the ALJ and Tribunal wrote, we simply don’t know anything about Petitioner’s use of the apartment. 

Again, I remind you, constant reader, that I can disagree with the Judges and Tribunal Commissioners and still respect them and their efforts.

ALJ Determination:

Matter of Salazar, Judge Law, June 29, 2023; Div’s Rep. Christopher O’Brien, Esq.; Pet’s Rep., pro se; Article 22.

Judge Law’s determinations generally exhibit an economy of language. But never have I seen such a short determination in a case in which there was a hearing on the merits. The determination did not get even to the bottom half of page four!

Petitioner sought dependent care credits for his mom. The Division denied his request. At the hearing, Petitioner “credibly testified that, because his mother was on a limited income, he paid the balance of her rent and general living expenses.” But, Judge Law also found “[t]he record [did] not contain any evidence that petitioner paid someone to care for his mother while he was employed or pursuing employment.”

Given the lack of evidence of the amount Petitioner paid for his mom’s care, the Judge found that Petitioner had not proven his entitlement to the dependent care credit.

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.