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Taxes in New York (TiNY) is a blog by the Hodgson Russ LLP State and Local Tax Practice Group. The weekly reports are intended to go out within 24 hours of the Division of Tax Appeals’ (DTA) publication of 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.  

TiNY Report for January 24, 2019 (covering DTA cases issued January 17)

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Below is our summary of an ALJ order the DTA posted to its website today.  Plus, we also report below on three ALJ Determinations and an ALJ order from January 10 that should have, but didn’t, hit our screens last Thursday.


Matter of Biggar; Judge: Connolly; Division’s Rep: Peter Ostwald; Taxpayer’s Rep: Kenneth Zemsky; Article 22.  This case must have posed some pretty interesting strategic issues for the litigants, since initially the burden of proof was on the Division, and later it shifted to Petitioner.

The issue was whether Petitioner was a New York State/City domiciliary in 2014. 

Petitioner was born and raised in New Zealand, where he lived until 1991.  In 1991, he took his accounting degree and pursued a series of accounting/finance/wealth advisory positions that took him from Vancouver (1991) to London (1991-1993) to New York City (1993-1998) to Sydney (1999-2002) back to London (2002-2010) and then back to New York City (2010-2012).  For 2010, he filed a part-year resident return (IT-203) claiming he moved back to New York City on June 14.  This is a key fact, according to the Judge, since statutory residents are always full-year residents.

At the end of 2012, Petitioner figured he didn’t have to worry about money any more (Channeling Forrest Gump: “[Lieutenant Dan] got me invested in some kind of fruit company [Apple]. And so then I got a call from him saying we don't have to worry about money no more and I said, ‘That's good. One less thing’”).  So he got off of the employment treadmill, but remained in New York through the end of 2013.  In early 2014, he learned his mother had cancer so he returned to New Zealand to be with her.  She died in March 2014, about the same time he bought an apartment in Auckland.  Since he spent less than 183 days in New York in 2014, he claimed he was a non-resident for that year.

The Judge started with the proposition (due to a lack of evidence) that Petitioner’s domicile, prior to 2010, was New Zealand.  Therefore, the Judge found that the Division was required to prove a change of domicile to New York.  The Judge found that the Division proved such a change in June 2010 with the following evidence: Petitioner’s 2010 Form IT-203 part-year return which was viewed by the Judge as tantamount to an admission by Petitioner that he changed his domicile to New York, an affidavit from the auditor, Petitioner’s swanky New York apartment, his investments and other work connections in New York, and Petitioner’s testimony which excluded some critical points (e.g. that his swanky NYC apartment was purchased for investment).  The Judge determined that the evidence was “clear and convincing”. 

So the burden then shifted to Petitioner to demonstrate, with clear and convincing evidence, the he changed his domicile to New Zealand in 2014.  And the Judge found Petitioner’s evidence insufficient to prove that domicile change.  In particular, the Judge found that Petitioner’s strong and continuous business ties in New York City, his pattern of returning to New York City after travelling outside of the state, and the days spent in New York City versus Auckland in 2015 (227 days versus 94 days) suggested there was no change in domicile in 2014. 

I couldn’t help but notice the multiple times the Judge referred to a lack of testimony on particular points as supporting a finding there was clear and convincing evidence of a change of domicile to New York City in 2010.  I am not at ease with the idea that the lack of testimony could be found to be clear and convincing evidence of anything. 

Matter of Race Properties, LLC; Judge: Maloney; Division’s Rep: Anita Luckina; Taxpayer’s Rep: Morgan Anderson and Robert Fix; Articles 28 and 29.  The Division proved it properly mailed the Notice of Determination to Petitioner and Petitioner’s representative.  Petitioner filed its DTA petition protesting the Notice about a year later, well beyond the 90-day deadline to file.  The Judge dismissed the petition as untimely-filed.

Matter of Clinton Gourmet Corp.; Judge: Galliher; Division’s Rep: Justine Clarke Caplan; Taxpayer’s Rep: Israrul Hasan; Articles 28 and 29.  The Division proved it properly mailed the Notice of Determination to Petitioner’s last known address.  Petitioner filed its DTA petition protesting the Notice after the expiration of the 90-day limitations period.  The Judge determined Petitioner failed to timely file and dismissed the petition. 


Matter of Daniel and Joseph; Judge: Connolly; Division’s Rep: Colleen McMahon; Taxpayer’s Rep: pro se; Article 22.  In addressing a Notice of Intent to Dismiss, the Judge found that the Division did not offer sufficient proof to establish that it properly mailed that conciliation order to Petitioners.  The Division could not show that the Mount Sinai address to which the conciliation order was mailed, was Petitioners’ last known address.  The Division relied on Petitioners’ request for the BCMS conference as proof Mount Sinai was their address.  The ALJ determined it was not clear how the request proved that was the last known address.  The request asked whether the address on the Notice at issue was correct and Petitioners had checked the “yes” box.  However, there was no proof in the record that Mount Sinai was the address used on the Notice, since there was no affidavit attesting to that and the Notice was not part of the record.  Additionally, that the Mount Sinai was the same address Petitioners used on their DTA petition was also not sufficient proof that it was the last known address of Petitioners for purposes of mailing the conciliation order because that petition was received after the conciliation order was issued.  The Notice of Intent to Dismiss Petitioners’ DTA petition was rescinded, and the Division was directed to file its answer. 

Matter of Kheen; Judge: Maloney; Division’s Rep: Hannelore Smith; Taxpayer’s Rep: pro se; Notice of Proposed Driver License Suspension Under Tax Law § 171-v.  On April 17, 2018, Petitioner filed a petition challenging a Notice of Proposed Driver License Suspension dated January 18, 2018, as well as five underlying assessments which appeared to be fixed and final since all but one had already matured to the Notice and Demand stage, and the remaining Notice of Deficiency had been issued more than 90 days prior to the filing of the petition.  The Division made a motion for dismissal or summary determination on the grounds that the DTA had no jurisdiction to entertain the validity of the Notices and Demand and Petitioner’s challenge to the Notice of Proposed License Suspension was time-barred since the filing date of the petition fell beyond the 60-day time limit.

The Judge initially found that the Division failed to prove it mailed the Notice of Proposed License Suspension to Petitioner’s last known address. The Judge also determined that the Division had not shown that Petitioner was subject to fixed and final tax liabilities in excess of $10,000 (the statutory threshold for a license suspension).  In this regard the Judge found that one of the Notices and Demand had been issued to a taxpayer with a different name than Petitioner’s, and the Division failed to show that any of the Notices at issue had been sent to Petitioner’s last known address.  Accordingly, the Judge determined that the Division had not shown fixed and final liabilities against Petitioner in excess of $10,000 and denied the motion for dismissal.

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