Tax Appeals Tribunal

State of New York

 

*1 IN THE MATTER OF THE PETITION OF SOL FELDMAN AND LILLIAN FELDMAN

for Redetermination of a Deficiency or for Refund of New York State Personal

Income Tax under Article 22 of the Tax Law and New York City Personal Income

Tax under Chapter 46, Title T of the Administrative Code of the City of New

York for the Years 1981 through 1983.

File No. 802955

TSB-D-88(25)I

December 15, 1988

 

Opinion

 

            The Administrative Law Judge determined that the actions of the petitioners, examined as a whole, did not indicate an intention to have a fixed and permanent home in Florida.  It was also determined that the home on Sackett Lake was suitable for and used only for summer vacations, and, as a result, was not a permanent place of abode.  The Administrative Law Judge also found that the petitioners did not spend, in the aggregate, more than 183 days of the taxable year in New York.

 

            While it was determined that no change in domicile did occur, no negligence or intentional disregard by petitioners was shown and penalties imposed pursuant to Tax Law section 685(b) were cancelled by the Administrative Law Judge. Petitioners were credited with a payment of $1,684.73 against liabilities asserted to be due for the year 1982.

 

            In contrast, petitioners allege that in November 1979, petitioners abandoned their domicile in the State of New York and established domicile in Boca Raton, Florida, which they intended to be and today contend to be their permanent home.  Petitioners concur with the Administrative Law Judge's determination that the home on Sackett Lake was suitable for and used only for summer vacations and, as a result, was not a permanent place of abode. Petitioners also concur with the determination that they did not spend, in the aggregate, more than 183 days of the taxable year in the State.

 

 *4       We affirm the determination of the Administrative Law Judge, but modify the finding that the petitioners did not spend, in the aggregate, more than 183 days of the taxable year in New York State.

 

            Former section 605(a) of the Tax Law in effect during the period at issue defined a resident individual as one:

 

            '(1)  who is domiciled in this state, unless (A) he maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this state, or . . ..

 

            '(2)  who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the taxable year in this state, unless such individual is in active service in the armed forces of the United States.'

 

            While there is no definition of 'domicile' in the Tax Law, the Division's regulations (20 NYCRR 102.2[d]) provide, in pertinent part:

 

            '(d)  Domicile (1)  Domicile, in general, is the place which an individual intends to be his permanent home--the place to which he intends to return whenever he may be absent.

 

            (2)  A domicile once established continues until the person in question moves to a new location with the bona fide intention of making his fixed and permanent home there.  No change of domicile results from a removal to a new location if the intention is to remain there only for a limited time; this rule applies even though the individual may have sold or disposed of his former home.  The burden is upon any person asserting a change of domicile to show that the necessary intention existed.  In determining an individual's intention in this regard, his declarations will be given due weight, but they will not be conclusive if they are contradicted by his conduct.  The fact that a person registers and votes in one place is important but not necessarily conclusive, especially if the facts indicate that he did this merely to escape taxation in some other place.

  

            '(4)  A person can have only one domicile.  If he has two or more homes, his domicile is the one which he regards and uses as his permanent home.  In determining his intentions in this matter, the length of time customarily spent at each location is important but not necessarily conclusive.  As pointed out in subdivision (a) of this section, a person who maintains a permanent place of abode in New York State and spends more than 183 days of the taxable year in New York State is taxable as a resident even though he may be domiciled elsewhere.'

 

            Permanent place of abode is defined by section 102.2(e)(1) as:

 

            '. . . a dwelling place permanently maintained by the taxpayer, whether or not owned by him, and will generally include a dwelling place owned or leased by him or his spouse.  However, a mere camp or cottage, which is suitable and used only for vacations, is not a permanent place of abode.  . . .'

 

            The Administrative Law Judge determined that petitioners' actions, examined as a whole, did not indicate an intention to make a fixed and permanent home in Florida.  We agree with this determination.

 

 *5       To effect a change in domicile, there must be an actual change in residence, coupled with an intention to abandon the former domicile and to acquire another (Aetna National Bank v. Kramer, 142 AD2d 444, 445).  The concept of intention was addressed by the Court of Appeals in Matter of Newcomb (192 NY 238, 251):

 

            'A change of domicile may be made through caprice, whim or fancy, for business, health, or pleasure, to secure a change of climate, or a change of laws, or for any reason whatever, provided there is an absolute and fixed intention to abandon one and acquire another and the acts of the person affected confirm the intention.'

 

            Such an absolute and fixed intention to abandon one domicile and acquire another must, however, be provided by clear and convincing evidence (see, Matter of Zinn, 54 NY2d 713, revg 77 AD2d 725).  Petitioners did not establish by clear and convincing evidence that they intended to change their domicile from New York to Florida.

 

            Motivated by failing health and thus a need to retire from the active practice of osteopathic medicine, petitioners, in November 1979, purchased a condominium in Boca Raton, Florida.  A Declaration of Domicile was recorded in the Circuit Court, Palm Beach County, Florida on January 23, 1980, in which petitioner, Sol Feldman, declared (under penalty of perjury) that he became a bona fide resident of the State of Florida on November 19, 1979. Petitioner registered to vote in Palm Beach County, Florida on January 22, 1980 and on or about that time he obtained a Florida driver's license. Petitioner registered his automobile, joined a men's club in Century Village, Florida and maintained all but one bank account with Florida banks.  Petitioner has neither maintained his New York driver's license nor has he voted in New York since 1980.

 

            While courts have recognized the self-serving nature of so-called 'formal declarations' of domicile such as voter registrations or motor vehicle registrations, greater recognition has been given to 'informal declarations' and the acts of the person in resolving the question of domicile (see, Wilke v. Wilke, 73 AD2d 915).  However, the actions of the petitioners, even when considered in conjunction with their intent to retire due to failing health, do not constitute clear and convincing evidence of petitioners' intent to change their domicile (see, Matter of Zinn v. Tully, supra).

 

            The Court of Appeals articulated the importance of establishing intent, when, in Matter of Newcomb (supra) it stated, 'No pretense or deception can be practiced, for the intention must be honest, the action genuine and the evidence to establish both, clear and convincing.'  Petitioners have retained ownership of their home in Brooklyn, as well as control over the practice located therein. Although Petitioner's involvement in the practice has diminished since his retirement, the practice continues to exist and, in fact, serves as a continual tie to the local community.  Thus, petitioners fall short of establishing by clear and convincing evidence an intent to change domicile.

 

 *6       The Administrative Law Judge was correct in the determination that petitioners' home on Sackett Lake was not a permanent place of abode (see, 20 NYCRR 102.2[e][1]). Petitioners have not met their burden of proof in establishing Florida as their new domiciliary (see, Matter of Bodfish v. Gallman, 50 AD2d 457). The issues remaining are whether petitioners' home in Brooklyn can be considered a permanent place of abode and whether, during the years at issue, petitioners spent more than 183 days in the State in light of Tax Law section 605(2).

 

            The Division's regulations (20 NYCRR 102.2[e][1]) provide, in pertinent part, as follows:

 

            '. . . a dwelling place permanently maintained by the taxpayer, whether or not owned by him, and will generally include a dwelling placed owned or leased by his or her spouse.'

 

            Petitioners own, and petitioners' daughter and grandchildren continue to occupy, the home at 5807 18th Avenue in Brooklyn, New York.  The home consists of a lower floor that was and continues to be used as petitioner Sol Feldman's professional office, while the upper floor was and continues to be used as a residence.  It must also be noted that the lower floor contains a bedroom, bathroom and a kitchen which petitioner, Sol Feldman, uses when he returns to Brooklyn to re-open his practice.  Whether or not his practice consists of 'unfinished business' concerning patients who have insurance or other similar claims, or that he comes into his office for a day or two a week to keep 'active' has no bearing on the Division's regulations concerning permanent place of abode (see, 20 NYCRR 102.2[e][1]).  The language of the regulation is clear and does not demand explanations as to why the dwelling is permanently maintained by the taxpayer.

 

            The aforementioned rationale also applies to petitioner's testimony that he has never entertained the thought of selling the home in Brooklyn.  It makes no difference as to the reason why petitioner chooses not to sell his home.  The operative words of the regulation are 'permanently maintained' which the petitioner does through his continued ownership of the house, as well as his continued maintenance of the lower floor (see, 20 NYCRR 102.2[e][1]; Stranahan v. State Tax Commn., 68 AD2d 250, 255; Smith v. State Tax Commn., 68 AD2d 993, 994).

 

            Section 102.2(c) of the regulations states in pertinent part:

 

            'Any person domiciled outside New York State who maintains a permanent place of abode within New York State during any taxable year and claims to be a non-resident, must keep and have available for examination by the Tax Commission adequate records to substantiate the fact that he did not spend more than 183 days of such taxable year within New York State.'  (20 NYCRR 102.2[c].)

 

            The Administrative Law Judge found that petitioners did not spend more than 183 days of the taxable year in New York State.  We do not agree with this finding.

 

            It is petitioner's obligation to keep and have available for examination adequate records to substantiate the fact that he did not spend more than 183 days of such taxable year within the State (Smith v. State Tax Commn., 68 AD2d 993, 994, citing 20 NYCRR 102.2[c]).  The record indicates that petitioner did not provide the requisite documentary evidence to support such a finding .

 

 *7       In determining that petitioners did not spend more than 183 days in New York, the Administrative Law Judge relied on petitioner Sol Feldman's testimony that petitioners arrived in New York around mid-May and departed in mid-October.  An account statement reflecting electric use for the home on Sackett Lake was also submitted by the petitioners.  The statement included the years at issue and displayed a pattern concerning electric use from the months of May to October.  This statement, however, cannot be deemed conclusive and does not satisfy the reasonable mandate of the regulation discussed above.

 

            Accordingly, it is ORDERED, ADJUDGED and DECREED that:

 

            1.  The exception of the petitioners, Sol Feldman and Lillian Feldman, is denied;

 

            2.  The determination of the Administrative Law Judge is affirmed; and

 

            3.  The petition of Sol Feldman and Lillian Feldman is granted to the extent indicated in conclusion of law 'F' of the Administrative Law Judge's determination and the Division of Taxation is directed to modify the notices of deficiency issued on January 29, 1986 but, except as so granted, is in all other respects denied.