TiNY Report for May 31, 2018 (covering DTA cases from May 24)

Welcome to Chez TiNY.  Today’s specials include five ALJ Determinations.  Two are worthy meals.  Three are timeliness matters that will leave your hunger for substance unsatisfied.  Regrettably, we ran out of Tribunal Decisions last week.

ALJ DETERMINATIONS

Matter of The Executive Club; Judge Russo; Division’s Rep: Osborne Jack; Taxpayer’s Rep: Alvan Bobrow; Articles 28 and 29.  This is the most recent in a long line of cases dealing with the sale of scrip by adult entertainment clubs.  The scrip in this case was used to pay entertainer fees and to tip bartenders, cocktail waitresses, security people and hosts.  Judge Russo held that the sale of scrip by a club is taxable under Tax Law §§ 1105(f)(1)/1101(d)(2) (an amount paid for admission), 1105(f)(3) (charges of a “charge of a roof garden, cabaret or other similar place”), and 1105(d) (sale of food or alcohol including charges for entertainment).  In addition, the Judge found that the taxpayer did not prove: the amount of tips for which the scrip was used, the extensions of the statute of limitations were not valid, and the scrip was a non-taxable intangible. 

Matter of Steel Pan LLC; Judge Law; Division’s Rep: Jessica DiFiore; Taxpayer’s Rep: Melvin Berfond; Articles 28 and 29.  Judge Law granted the Division’s Motion for Summary Determination finding that the Division proved both its standard mailing practices and that they were followed when on November 9, 2016, the Division mailed the Notice of Determination to Petitioner at its last known address.  Petitioner did not file its Request for Conciliation Conference until May 11, 2017, which was long after the 90-day time limit had expired.

Matter of Suozzi and Spencer; Judge Russo; Division’s Rep: Ellen Roach; Taxpayer’s Rep: pro se; Article 22.  Petitioners fought a good fight, but in the end were unable to demonstrate an “unambiguous entitlement” to a solar energy equipment credit (SEEC) for their purchase of a heat pump-enabled geo-thermal HVAC/hot water system.  Unlike most pro se Petitioners, these two did a very thorough job of presenting their case—at least as far as I could tell.  But the Tribunal had, in Matter of Li (May 8, 2017) and Matter of Grimm (January 11, 2018), previously ruled against allowing SEECs for geothermal heat pumps like the one purchased by Petitioners.  So the outcome was pretty-much pre-ordained.

Matter of Stanton; Judge Gardiner; Division’s Rep: Ellen Roach; Taxpayer’s Rep: Edward Thaney; Article 22.  Judge Gardiner dismissed the Petition on the DTA’s Notice of Intent to Dismiss finding that the Division proved both its standard mailing practices and that they were followed when, on January 31, 2017,  the Division mailed the Notice of Deficiency to Petitioner at his last known address.  Petitioner did not file his ALJ Petition until August 22, 2017, which was long after the 90-day time limit had expired.  The Judge decided that an inconsistency in the last four digits of a nine-digit zip code reported on Petitioner’s last-filed income tax return was not material since it appeared from the rest of the evidence that the correct zip code was used on the Notice.

Matter of Walsh; Judge Gardiner; Division’s Rep: Ellen Roach; Taxpayer’s Rep: Edward Thaney; Article 22.  It’s like “Groundhog Day” (the movie, not the day in February).  Judge Gardiner dismissed the Petition on the DTA’s Notice of Intent to Dismiss finding that the Division proved both its standard mailing practices and that they were followed when on January 31, 2017,  the Division mailed the Notice of Deficiency to Petitioners at their last known address.  Petitioners did not file their ALJ Petition until August 22, 2017, which was long after the 90-day time limit had expired.  In this matter there was no need for the Judge to reconcile a discrepancy with the zip codes because there was no such discrepancy.

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