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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 October 15, 2020 (reporting on DTA cases issued September 24, October 1 and October 8)

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We have some pent-up cases this week. I took a few weeks off from TiNY because: (a) the cases were not particularly noteworthy, and (b) if I had to write up one more timy I was going to start my Thursdays by opening the bourbon bottle before opening my web browser. So I took a little mental health break from TiNY, and am now anxious to report on the one Tribunal Order, five ALJ Determinations, and two ALJ Orders from the last three weeks.

TRIBUNAL ORDER

Matter of LePage et al; Division’s Rep.: Linda Farrington; Petitioner’s Rep.: Dennis Rimkunas; Article 22 (by Chris Doyle)

The ALJ Determination out of which this matter arises was one of the “2019 Christmas Eve Massacre” cases I reported on here. Petitioners lost their bid to have the corporation they owned treated as a hybrid (federal S/New York C) corporation in the year the stock was sold in a transaction in which the parties made a 338(h)(10) election. There’s a lot to unpack in that last sentence, but none of it is really relevant to the Order, which granted the Business Counsel of New York State (the “BCNYS”) leave to file an amicus brief in the case. The Tribunal found that the BCNYS’s motion was not too late and that the BCNYS probably had something relevant to say about the matter. Plus, the proposed amicus brief was written by Tim Noonan, and everybody (well, apparently not the Division) seems to love reading what that guy writes.

ALJ ORDERS

Matter of Azogui; Judge Gardiner; Division’s Rep.: Jennifer Hink-Brennan; Petitioner’s Rep.: Daniel Kelly; Article 22 (by Chris Doyle)

The Judge denied the Division’s motion for dismissal/summary determination on timeliness grounds. The Division proved its standard mailing procedures and that they were followed to mail the Notice to Petitioner’s last known address. The Division also mailed a copy of the Notice to Petitioner’s former representative. However, the address used for mailing the Notice to the representative was an old address the former representative was, at the time of mailing, no longer using. Since the representative had notified the Division of his change of address six months prior to the issuance of the Notice, and the Division had actually used the new address for other correspondence with the former representative, the Division was found to have not followed its standard procedures when mailing the Notice to the former representative. The case will proceed in due course.

Matters of Scarfi and Metro Enterprises Corp; Judge Russo; Division’s Rep.: Osborne Jack; Petitioner’s Rep.: Alvan Bobrow; Articles 28 and 29 (by Chris Doyle)

A hearing was held on July 15, 2019 for Petitioners. On August 14, Petitioners filed a motion to reopen the record, for reargument and to recuse the Division’s counsel. These motions were denied by Judge Russo in an Order dated January 2, 2020. Our summary of that Order is here. On January 28, 2020, Petitioners filed a motion to reargue the first motion, a motion for Petitioner Scarfi to intervene, and a motion for summary determination. And on February 11, Petitioners filed a motion to consolidate their case with another case involving other petitioners making similar legal arguments.

The Judge denied Petitioners’ motion to intervene and for summary determination for failure by Petitioners to follow proper motion practice. The Judge found that Petitioners disregarded the requirement that the motion be served on the adverse party.

On the second motion to reargue, the Judge found that the first motion was properly denied as being premature. Motions to reargue are to be pursued only after a determination has been made. Therefore, the Judge denied the second motion to reargue (maybe this motion should be called the motion to “re-reargue”).

On the motion to consolidate, the Judge found the materials submitted lacked affidavits from the third-party petitioners in the other cases supporting consolidation. The Judge probably could have stopped at: “The motion to consolidate was not accompanied by any affidavits, affirmations, or any other supporting papers.” But I suppose she wanted to be comprehensive. She also found that the third-party petitioners had not authorized representation by the attorney representing Petitioners Scarfi and Metro Enterprises, and that the secrecy provisions of the tax law would thus prohibit consolidation of the cases. Thus, another motion denied.

Matter of Piacquadio; Judge Russo; Division’s Rep.: Melanie Spaulding; Petitioner’s Rep.: Lawrence Cole; Articles 28 and 29 (by Chris Doyle)

The Division moved for dismissal/summary determination. Petitioner cross-moved for an order dismissing (not denying!) the Division’s motion to dismiss, cancelling the Notices, nullifying the conciliation order issued by BCMS in this matter, and for damages(!). The Division withdrew its motion to dismiss, so the Judge found that Petitioner’s motion to dismiss the Division’s motion was mooted. The Judge then denied Petitioner’s motion to nullify the conciliation order and cancel the Notices because Petitioner did not submit affidavits in support of his motions and because failure to serve a copy of a notice on a representative doesn’t result in an untimely notice, it merely results in the suspension of the time period during which the taxpayer must file their petition or BCMS request.

The Judge treated the motion for damages as a motion for costs and then denied the motion because the matter had not matured to a point at which Petitioner might be determined to be a “prevailing party” entitled to costs.

The matter will proceed in due course.

ALJ DETERMINATIONS

Matter of Amhad; Judge Behuniak; Division’s Rep.: Elizabeth Lyons; Petitioner’s Rep.: Nasir Faizi; Article 20 (by Chris Doyle)

Judge Behuniak granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on March 5, 2019, the Notice to Petitioner’s last known address. Petitioner’s BCMS request, filed on July 24, 2019, was therefore late.

Matter of Musa and Mohamed; Judge Law; Division’s Rep.: Mary Hurteau; Petitioners’ Rep.: pro se*; Article 22 (by Chris Doyle)

Judge Law granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on April 17, 2019, the Notice to Petitioners’ last known address. Petitioners’ BCMS request, filed on August 5, 2019, was therefore late.

Matter of Jaber; Judge Russo; Division’s Rep.: Mary Hurteau; Petitioner’s Rep.: pro se*; Article 22 (by Chris Doyle)

Judge Russo granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on January 3, 2019, the Notice to Petitioner’s last known address. Petitioner’s BCMS request, filed on August 5, 2019, was therefore late.

Matter of Shayea and Alomrani; Judge Behuniak; Division’s Rep.: Mary Hurteau; Petitioners’ Rep.: pro se*; Article 22 (by Chris Doyle)

Judge Behuniak granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on November 5, 2018, the Notice to Petitioners’ last known address. Petitioners’ BCMS request, filed on October 22, 2019, was therefore late.

Matter of Al Saidi; Judge Connolly; Division’s Rep.: Michele Milavec; Petitioners’ Rep.: pro se*; Article 22 (by Chris Doyle)

Judge Connolly granted the Division’s motion for summary determination. The Division proved both its standard mailing procedures and that they were followed when it mailed, on January 24, 2019, the Notice to Petitioners’ last known address. Petitioners’ BCMS request, filed on August 15, 2019, was therefore late.

*  Each of the flagged determinations carried a footnote similar to the following: “The petition listed Yehad Abdelaziz as petitioners’ representative. By letter dated November 7, 2019, the Division of Tax Appeals notified petitioners that Mr. Abdelaziz did not appear qualified to represent petitioners in this forum (see 20 NYCRR 3000.2 [a] [2]).” His name sounded familiar to me, and he and TiNY have crossed paths before. Almost two years ago to the day I wrote up five cases in which he was likewise not granted permission to represent petitioners before the DTA. Check it out here. And before that, in May 2018, Mr. Abdelaziz received the same treatment in another case. Perhaps it’s time to try a different approach.

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