Division of Tax Appeals

State of New York

 

*1 IN THE MATTER OF THE PETITION OF MARJORIE ALFUS

FOR REDETERMINATION OF A DEFICIENCY OR FOR REFUND OF NEW YORK STATE AND NEW

YORK CITY INCOME TAXES UNDER ARTICLE 22 OF THE TAX LAW AND THE NEW YORK CITY

ADMINISTRATIVE CODE FOR THE YEARS 1986 AND 1987.

DTA No. 812408

October 17, 1995

 

 

CONCLUSIONS OF LAW

 

            *24 A. For the years at issue, Tax Law §  605(former [a]) provided, in pertinent part, as follows:

 

            "Resident individual. A resident individual means an individual:

 

            "(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 ...."

 

            B. Section 11-1705(b) of the Administrative Code of the City of New York provides a virtually identical definition of a New York City resident individual for purposes of the City income tax.

 

            C. Permanent place of abode is defined in the regulations at 20 NYCRR former 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 his or her spouse."

 

            D. The Tax Law does not contain a definition of "domicile", but the Division's regulations (20 NYCRR former 102.2[d]) provided, in pertinent part, as follows:

 

            "(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."

 

            E. To effect a change in domicile, there must be an actual change in residence, coupled with an intent to abandon the former domicile and to acquire another (Aetna National Bank v. Kramer, 142 App Div 444, 445, 126 NYS 970). Both the requisite intent as well as the actual residence at the new location must be present (Matter of Minsky v. Tully, 78 AD2d 955, 433 NYS2d 276). The concept of intent was addressed by the Court of Appeals in Matter of Newcomb (192 NY 238, 250-251):

 

            *25 "Residence means living in a particular locality, but domicile means living in that locality with intent to make it a fixed and permanent home. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile.

 

            "The existing domicile, whether of origin or selection, continues until a new one is acquired, and the burden of proof rests upon the party who alleges a change. The question is one of fact rather than law, and it frequently depends upon a variety of circumstances, which differ as widely as the peculiarities of individuals .... In order to acquire a new domicile there must be a union of residence and intention. Residence without intention, or intention without residence is of no avail. Mere change of residence although continued for a long time does not effect a change of domicile, while a change of residence even for a short time, with the intention in good faith to change the domicile, has that effect .... Residence is necessary, for there can be no domicile without it, and important as evidence, for it bears strongly upon intention, but not controlling, for unless combined with intention it cannot effect a change of domicile .... There must be a present, definite and honest purpose to give up the old and take up the new place as the domicile of the person whose status is under consideration .... [E]very human being may select and make his own domicile, but the selection must be followed by proper action. Motives are immaterial, except as they indicate intention. 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 .... 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. The animus manendi must be actual with no animo revertendi ....

 

            "This discussion shows what an important and essential bearing intention has upon domicile. It is always a distinct and material fact to be established. Intention may be proved by acts and by declarations connected with acts, but it is not thus limited when it relates to mental attitude or to a subject governed by choice."

 

            F. The test of intent with respect to a purported new domicile has been stated as "whether the place of habitation is the permanent home of a person, with the range of sentiment, feeling and permanent association with it" (Matter of Bourne, 181 Misc 238, 246, 41 NYS2d 336, 343, affd 293 NY 785; see, Matter of Bodfish v. Gallman, 50 AD2d 457, 378 NYS2d 138, 140). Moves to other states in which permanent residences are established do not necessarily provide clear and convincing evidence of an intent to change one's domicile (Matter of Zinn v. Tully, 54 NY2d 713, 442 NYS2d 990). 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." Additionally, formal declarations of domicile or principal residence are generally less persuasive in establishing intent than one's "general habit of life" (see, Matter of Trowbridge's Estate, 266 NY 283).

 

            *26 G. Petitioner asserts that she abandoned New York, her historical domicile, in 1980 when she entered into a written separation agreement with her husband, and moved to an apartment in Fort Lee, New Jersey. She contends that it was her intent at the time of her move to locate permanently in New Jersey. She avers that she planned to continue working for K-Mart in New Jersey, and to continue her involvement with the Bear's Nest townhouse project in New Jersey and to build a dream home near Bear's Nest. Furthermore, she asserts that the following acts support her position: she filed resident tax returns in New Jersey in 1980 (part-year) and 1981, obtained a New Jersey driver's license and banked in New Jersey.

 

            In addition, petitioner asserts that she no longer had a home in New York after the separation. She contends that she lacked "free and continuous access" to the Park Avenue apartment after her separation and, therefore, it was not a permanent place of abode for her (Petitioner's reply brief, p. 3). She maintains that the agreement granted her husband, Albert Alfus, the right to reside in the Park Avenue residence and the use of all of its furnishings during his lifetime, as well as providing that "neither party would compel or endeavor to compel the other party to dwell with the other" (Petitioner's brief, p. 13).

 

            Petitioner asserts that after the sale of the Bear's Nest property in 1982, she decided to shift her focus and become a Florida domiciliary. In her brief, she contends that, over time, she changed her domicile from New Jersey to Florida. She argues that she never reestablished New York as her domicile.

 

            A review of the record compels the conclusion that petitioner has failed to sustain her burden of proving by clear and convincing evidence that she intended to change her domicile from New York (State and City) to either New Jersey or Florida (see, Matter of Bodfish v. Gallman, supra).

 

            Prior to 1980, petitioner was domiciled in New York; was employed as resident counsel by the K-Mart Corporation in its apparel division's office located in North Bergen, New Jersey; and was actively involved with the development of the Bear's Nest real estate project in New Jersey. Petitioner contends that her marital separation in 1980 precipitated her change of domicile to New Jersey. In support of her position, she submitted a copy of her written separation agreement, her son, Mitchell Alfus's, affidavit and her own testimony.

 

            There is no dispute that Albert Alfus was a New York domiciliary during the audit period. Generally, the domicile of a husband and wife are the same. However, if they are separate in fact, then each may acquire his or her own domicile (see, 20 NYCRR 105.20[d][5][i]). The record before me does not support petitioner's contention that she and her husband were separated in fact.

 

            Petitioner and her husband filed joint tax returns in 1980, 1981 and 1982, as well as in 1986 and 1987, with the State of New Jersey. In October 1982, they jointly purchased a New York City apartment located at 799 Park Avenue, which petitioner redecorated at her own expense. The Alfuses continued to jointly own this apartment up to and including the audit period. In fact, petitioner continues to own this apartment as surviving joint owner. They continued to maintain a joint bank account in New York and companion American Express and Mastercard credit cards. In addition, petitioner and her husband continued to attend social functions and vacation together. Furthermore, I have reviewed the separation agreement and nothing in this agreement precludes petitioner from using this apartment. Indeed, petitioner continued to be a joint owner with her husband of the 1150 Park Avenue apartment until its sale to their daughter in May 1984. Petitioner also testified that she stayed in the apartment occasionally.

 

            *27 I have reviewed the paragraphs in Mitchell Alfus's affidavit concerning his parents' separation and I find them to be extremely vague and of little value. In addition, other than the rental agreement and some extremely vague testimony as to what petitioner allegedly took with her to the Fort Lee, New Jersey apartment, there is nothing in the record to indicate what petitioner's "general habit of life" was in New Jersey in 1980 or for any subsequent years.

 

            The record does not establish that petitioner and her husband were separated in fact; therefore, since Albert Alfus was a domiciliary of New York (State and City) during 1986 and 1987, petitioner was a domiciliary of New York (State and City) as well during that period.

 

            H. Even if petitioner and her husband were separated in fact, the record does not establish that petitioner abandoned her New York domicile in favor of either New Jersey or Florida. Petitioner testified that it was her intent in 1980 to make New Jersey her domicile and, based on subsequent events, that it was her intent in 1982 to become a Florida domiciliary. However, the record indicates that she retained significant ties to New York which continued through the 1986 and 1987 audit period.

 

            From 1980 until 1982, petitioner continued to own jointly with her husband two properties in New York State: a New York City apartment located at 1150 Park Avenue and a residence at Lake Mahopac, New York. In 1982, she and her husband jointly purchased a third piece of New York property, a New York City apartment located at 799 Park Avenue, which she fixed up and furnished at her own expense. In May 1984, she and her husband sold the 1150 Park Avenue apartment to their daughter, Wendy Rothman. During the audit period, petitioner paid all expenses for the 799 Park Avenue apartment, as well as all expenses for the Lake Mahopac property until its sale sometime in 1986. Petitioner received mail at both New York City apartments. Petitioner also stayed in these apartments.

 

            It is noted that from 1980 until August of 1985, the only residential property which petitioner owned was located in New York State and was owned jointly with her husband, Albert. It is also noted that petitioner did not purchase a cooperative apartment in New Jersey until sometime in 1986, four years after her asserted change in domicile to Florida and after her purchase of a cooperative apartment in Palm Beach, Florida. Petitioner's retention of title to real property in New York (State and City) (In Re Will of Chrisman, 43 AD2d 771, 350 NYS2d 468; Matter of Roth, Tax Appeals Tribunal, March 2, 1989), and continued maintenance of a New York City apartment (Matter of Cooper v. State Tax Commn., 82 AD2d 950, 441 NYS2d 30) are factors adverse to petitioner's attempt to establish herself as a Florida domiciliary.

 

            There is no evidence in the record that petitioner ever used the address of any New Jersey apartment or house, which she either rented or owned, on any legal documents. However, the record does reveal that, after petitioner's asserted abandonment of her New York domicile, she continued to use her New York address on various legal documents. In December 1981, petitioner executed an affidavit in Florida which expressed her intent, along with three other individuals, to conduct business under the fictitious name of "South Florida Piggyback Joint Venture No. 3" in West Palm Beach, Florida. Her address on this affidavit was listed as 1150 Park Avenue, New York, New York. When petitioner purchased her cooperative apartment in Palm Beach, Florida in August 1985, her address was listed on the Personal Representative's Deed as 799 Park Avenue, New York, New York. In her Declaration of Domicile, which she swore to under oath on November 7, 1988, she stated that she became a bona fide resident of the State of Florida on January 15, 1985 and that her former legal residence was the State of New York.

 

            *28 Numerous other factors tend to show that petitioner did not change her domicile from New York. Petitioner continued to have a New York driver's license until December 20, 1985, at which time she voluntarily surrendered it to New Jersey. The New Jersey driver's license had her office address as her address. Her New York driver's license had an expiration date of March 30, 1988 and bore the address of 1150 Park Avenue, New York, New York. She continued to register her automobiles in New York State through 1982, using the Lake Mahopac address. During 1985 through 1987, petitioner's monthly Gold American Express card statements were sent to her at 799 Park Avenue, New York, New York. Additional factors include: petitioner's maintenance of a joint bank account with her spouse in a New York bank and petitioner's filing of a New York State resident return in 1985.

 

            Petitioner testified that she moved out of the 1150 Park Avenue apartment and into an apartment in Fort Lee, New Jersey in 1980. It is impossible to tell from petitioner's vague testimony what "near and dear" items, if any, she took with her to the Fort Lee, New Jersey apartment. I also find petitioner's testimony to be very vague concerning her subsequent dwellings in New Jersey. In fact, petitioner offered no testimony about her "general habit of life" in New Jersey from 1980 through 1987.

 

            It is noted that, during 1986 and 1987, petitioner's husband, son, daughter and grandchild were all domiciliaries of New York. Review of the record indicates that petitioner spent time with her family. Petitioner offered no testimony as to where or with whom she spent holidays. It is clear from the record that, for the years in question, petitioner spent significantly more time in New York than she spent in Florida.

 

            It appears from the record that petitioner spent approximately the same number of days in both New Jersey and New York. However, that is not determinative of a change of domicile from New York to New Jersey. It is noted that petitioner's professional life did not change significantly during the period in issue. She continued to be employed as resident counsel for K-Mart Corporation's apparel division in its North Bergen, New Jersey offices. She traveled domestically and internationally on business for K-Mart and she represented K-Mart on various legal matters in New York as well. She also performed legal services on behalf of Libra Leather, a New York company, and she continued as a member of various New York partnerships, including Mount Kisco Associates and Newburgh Associates, as well as some New Jersey partnerships. She also continued to be a member of the board of directors of Servico, a Florida-based company, and attended board meetings in Florida.

 

            It is impossible to find a change of domicile based on the record before me. Petitioner has failed to carry her burden of proving by clear and convincing evidence that she intended to change her domicile from New York (State or City) to either New Jersey or Florida.

 

            *29 I. Although I have concluded that petitioner has failed to sustain her burden of proving a change of domicile, I will next address the issue of "statutory residency". Even if it was determined that petitioner changed her domicile from New York to Florida, she would be properly assessed herein if she both maintained a permanent place of abode in New York (State or City) and spent in the aggregate more than 183 days there during the audit period (Tax Law §  605[b][1][B]).

 

            Petitioner argues that she did not maintain a permanent place of abode in New York State in 1986 and 1987. She contends that the written separation agreement, which she and her husband entered into, granted her husband, Albert Alfus, the right to reside in the Park Avenue residence and the use of all of its furnishings during his lifetime, while she paid the bills. Petitioner admits that she "made use of the apartment on occasion to stay overnight in New York City, but had no key and required her husband's permission to make use of the extra bedroom and bath" (Petitioner's brief, p. 15). She contends that she lacked "free and continuous access" to the Park Avenue apartment after her separation and, therefore, it was not a permanent place of abode for her (Petitioner's reply brief, p. 3). Petitioner cites Matter of Moed (Tax Appeals Tribunal, January 26, 1995) in support of her position that the New York City apartment owned jointly by her and her husband did not qualify as a permanent place of abode for her, who had restricted access that required the permission of her estranged husband.

 

            J. The definition of a permanent place of abode is contained in Conclusion of Law "C". The issue of whether petitioner "maintained a permanent place of abode" was addressed in Matter of Evans (Tax Appeals Tribunal, June 18, 1992, confirmed 199 AD2d 840, 606 NYS2d 404) wherein the Tax Appeals Tribunal concluded:

 

            "Determinations of a taxpayer's status as a resident or nonresident individual for purposes of the personal income tax have long been based on the principle that the result 'frequently depends on a variety of circumstances which differ as widely as the peculiarities of individuals' (Matter of Newcomb, 192 NY 238, 84 NE 950 at 954). Given the various meanings of the word 'maintain' and the lack of any definitional specificity on the party of the Legislature, we presume that the Legislature intended, with this principle in mind, to use the word in a practical way that did not limit its meaning to a particular usage so that the provision might apply to the 'variety of circumstances' inherent to this subject matter. In our view, one maintains a place of abode by doing whatever is necessary to continue one's living arrangements in a particular dwelling place. This would include making contributions to the household, in money or otherwise.

 

* * *

 

            "With regard to whether a place of abode is 'permanent' within the meaning of the statute, we do not agree with petitioner that the statute requires that the place of abode be owned, leased or otherwise based upon some legal right in order for it to be permanent .... In our view, the permanence of a dwelling place for purposes of the personal income tax can depend on a variety of factors and cannot be limited to circumstances which establish a property right in the dwelling place. Permanence, in this context, must encompass the physical aspects of the dwelling place as well as the individual's relationship to the place. For example, it seems clear that an apartment leased by one individual and shared with other unrelated individuals may be the permanent place of abode of those who are not named on the lease, given other appropriate facts. The Division's regulations (which are applicable to the city personal income tax [see 20 NYCRR 290.2]) make it clear that the physical attributes of the abode as well as its use by the taxpayer are determining factors in defining whether it is permanent. Thus, a 'permanent place of abode' is defined generally as 'a dwelling place permanently maintained by the taxpayer, whether or not owned by him ...' (20 NYCRR 102[6][e]). A 'mere camp or cottage, which is suitable and used only for vacations is not a permanent place of abode' (20 NYCRR 102[6][e]). Similarly, 'any construction which ... does not contain facilities ordinarily found in a dwelling, such as facilities for cooking, bathing, etc., will generally not be deemed a permanent place of abode' (20 NYCRR 102[6][e]). Moreover, a place of abode, whether in New York or elsewhere, 'is not deemed permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose' (20 NYCRR 102[6][e])."

 

            *30 K. Based on my review of the record, petitioner maintained a permanent place of abode in New York (State and City). Petitioner's reliance on Matter of Moed (supra) is misplaced. In Moed, the Tribunal determined that the taxpayer had no property right in the apartment, i.e., he did not own, lease or rent the apartment; rather, his wife rented the apartment. It also found that there was no evidence of a shared rental. Next, it determined that petitioner did not have free and continuous access to the apartment. Finally, the Tribunal noted:

 

            "Stated simply, marital status is clearly a pertinent factor to be considered among the totality of factors in determining domicile and residency. However, once the marital status has been established, here, the Moeds' separation 'in fact', the nature of the continuing inter-personal relationship between the Moeds does not provide sufficient basis for us to infer that petitioner's monthly payments were for shared rent or to presume that the furniture in the apartment was contribution in kind as described in Evans or to doubt the self-imposed restrictions by the Moeds on petitioner's access to Mrs. Moed's apartment" (Matter of Moed, supra).

 

            In the instant case, petitioner had a property right in the New York City apartment located at 799 Park Avenue, i.e., she owned it jointly with her husband, Albert. She had renovated and furnished it with her own money. She also paid all expenses associated with this apartment during the audit period. In addition, she stayed there. Petitioner asserts that she was separated in fact from her husband, and that the written separation agreement restricted her access to the apartment and required that she obtain her husband's permission in order to gain access to it. In Conclusion of Law "G", I found that petitioner and her husband were not separated in fact. Even if the Alfuses were separated "in fact", the written separation agreement by its terms did not restrict petitioner's access to either the 1150 Park Avenue apartment or the subsequent 799 Park Avenue apartment in any way; rather, it granted her husband the use of the 1150 Park Avenue apartment and its furnishings during his lifetime. Lastly, there is no corroborating testimony or evidence to support petitioner's assertion that she did not have a key to the apartment and that she had to obtain her husband's prior permission to stay at the apartment. Petitioner clearly maintained a permanent place of abode in New York (State and City) within the meaning and intent of Tax Law §  605(b) and 20 NYCRR former 102.2(e)(1).

 

            The remaining issue is whether petitioner spent in the aggregate more than 183 days of each taxable year in New York (State and City). Petitioner has the burden of proving by clear and convincing evidence that she did not spend more than 183 days in New York (State and City) during 1986 and 1987 (Matter of Smith v. State Tax Commn., 68 AD2d 993, 414 NYS2d 803; Matter of Kornblum v. Tax Appeals Tribunal, 194 AD2d 882, 559 NYS2d 158; see also, 20 NYCRR former 102.2[c]). I find that petitioner has failed to sustain her burden.

 

            *31 Petitioner was under the obligation to maintain "adequate records to substantiate the fact that she did not spend more than 183 days of such taxable year within New York State" (20 NYCRR former 102.2[c]). The Tax Appeals Tribunal, in Matter of Moss (November 2, 1992), found that a diary, which was supported by detailed and consistent testimony and travel reports, complied with the requirement set forth in 20 NYCRR former 102.2(c). Petitioner's diaries for 1986 and 1987 were submitted into the record. The record also contains day-count summaries for each month in each year prepared by petitioner's representative and reviewed by petitioner. Attached to the monthly summaries were copies of that particular month's diary pages and any documentary evidence available, including, inter alia, credit card receipts, credit card statements, airline receipts and other miscellaneous documents.

 

            In the instant case, the diaries submitted into the record contain illegible entries, as well as entries which consist solely of a notation of an event or person and nothing else, while other entries consist of a single or multiple abbreviations. In addition, on some pages, abbreviations had scratch marks through them.

 

            Petitioner testified that the diaries were not prepared on a daily basis; however, they were prepared during the years in question. She further testified that, to the best of her knowledge, the diaries were an accurate account of her time in and out of New York State. Petitioner also testified about the monthly summaries prepared by her representative and reviewed by her. I find petitioner's testimony concerning both the diaries and the monthly summaries to be vague and equivocating. The record reveals that petitioner had difficulty reading her own handwriting and, as a result, petitioner's day counts for 1986 and 1987, as stated in her bill of particulars, were revised in the monthly summaries. In addition, she did not offer any explanation for any of the abbreviations in the diary and she did not testify about her whereabouts for each day during the audit period.

 

            I have reviewed each monthly summary packet. Petitioner submitted very few documents in support of her diaries and the monthly summaries. There were many days in each year for which there was no documentation. In addition, based upon my review of the monthly summary packets, I find that, in some instances, the documents do not support petitioner's whereabouts as stated for that particular day on the monthly summary.

 

            Based on the record before me, I am unable to determine how many days petitioner spent in New York (State and City) during the years in issue. Petitioner has failed to meet her burden of proof on this issue (Tax Law §  689 [e]).

 

            L. Petitioner contends that New York's scheme of resident taxation violates the United States Constitution's right to travel. She argues that New York has made its test for establishing a change of domicile a difficult one. Petitioner asserts:

 

            *32 "that if New York law requires a finding that Petitioner remained a New York domiciliary from 1980 through 1987, then such law has created an impermissibly high barrier for individuals to surmount to relocate from one state to another, and as such is in violation of the federal constitution right to travel embodied in the Privileges and Immunities Clause of Article IV and the Commerce Clause" (Petitioner's brief, pp. 17-18).

 

            Petitioner also argues that New York's scheme of resident taxation, which treats a taxpayer as a New York resident if the taxpayer has a permanent place of abode in New York and spends 184 days or more in New York in a given year, violates "the internal consistency test employed by the Supreme Court to determine the constitutionality of state tax laws under the Commerce Clause" (Petitioner's brief, p. 18).

 

            In addition, petitioner asserts that, in the instant case, the Division is  "attempting to define permanent place of abode broadly to include living quarters partially owned by Petitioner, but controlled and used by her estranged husband" (Petitioner's brief, p. 18). She contends that the Division is discriminating against her based on her gender because of its failure to apply its internal audit rule to her. Petitioner asserts that it is the Division's stated audit policy "that a residence that is maintained by one individual but used exclusively by another should not be deemed a permanent place of abode for the individual who maintains it" (Petitioner's brief, p. 19). She further asserts that this policy explicitly includes situations in which one spouse, separated from the other, provides a permanent place of abode for the other. Petitioner argues that because she was a woman, her assertion that she was maintaining an abode for her husband was judged to be less credible by the Division than it would have been if she had been a man. She contends that "this irrational application of the Division's audit guidelines violates the Equal Protection clause of the federal Constitution" (Petitioner's brief, p. 19).

 

            Petitioner's arguments that New York's scheme of resident taxation violates the Federal constitutional right to travel embodied in the Privilege and Immunities Clause of Article IV and is unconstitutional under the Commerce Clause constitute challenges to the constitutionality of the statute on its face. The jurisdiction of the Tax Appeals Tribunal and the Division of Tax Appeals is prescribed by the enabling legislation (Matter of Fourth Day Enterprises, Tax Appeals Tribunal, October 27, 1988). This jurisdiction does not include a challenge that a statute is unconstitutional on its face (Matter of Unger, Tax Appeals Tribunal, March 24, 1994, citing Matter of Fourth Day Enterprises, supra). At the administrative level, the statutes of the State of New York are presumed to be constitutional (Matter of Fourth Day Enterprises, supra).

 

            As for petitioner's equal protection argument, it is without merit. I find nothing in the record to indicate that the Division discriminated against her based on her gender. The audit guidelines specifically distinguish, in the case of married but separated individuals, between maintenance and use. Petitioner admitted to using the New York apartment. In addition, she was not excluded from using the apartment by the terms of the separation agreement. The Division did not discriminate against petitioner based on her gender when it determined she had a permanent place of abode.

 

            *33 M. 20 NYCRR 132.18(a) provides, in pertinent part, as follows:

 

   "If a nonresident employee (including corporate officers ...) performs services for his employer both within and without New York State, his income derived from New York State sources includes that proportion of his total compensation for services rendered as an employee which the total number of working days employed within New York State bears to the total number of working days employed both within and without New York State. The items of gain, loss and deduction (other than deductions entering into the New York itemized deduction) of the employee attributable to his employment, derived from or connected with New York State sources, are similarly determined. However, any allowance claimed for days worked outside of New York State must be based upon the performance of services which of necessity, as distinguished from convenience, obligate the employee to out-of-state duties in the service of his employer."

 

            N. Assuming, arguendo, that petitioner was a nonresident during 1986 and 1987, the issue is whether or not the income she received from Libra Leather, Inc. was New York source income which would be subject to tax by New York State and City in its entirety.

 

            The Division contends that petitioner must allocate her Libra Leather income as New York source income pursuant to 20 NYCRR 132.18. It maintains that the record clearly establishes that petitioner acted as legal counsel to Libra Leather, a New York corporation with its only offices in New York City. The Division asserts that income from a New York corporation earned in another state is taxable as New York source income when the work performed out of state is for the convenience of the employee and not out of necessity to the employer. It argues that petitioner has failed to show that the legal work she performed in New Jersey for Libra Leather was performed of necessity, rather than for her convenience. Furthermore, the Division asserts that since petitioner is only admitted to practice law in New York State, any income she earned as a nonresident New York attorney must be allocated in full to New York.

 

            Petitioner contends that the Division is incorrectly classifying the personal service income she received in both 1986 and 1987 from Libra Leather, Inc. as New York source income. She avers that she herself "did not have an office in New York and did not conduct business for Libra in New York" (Petitioner's brief, p. 19). She maintains that "she regularly and exclusively performed her services for Libra from her business office in North Bergen, New Jersey, where she was employed on a full-time basis" (Petitioner's brief, p. 21). Petitioner also challenges the Division's contention that the income she earned resulted from the practice of law and was therefore 100% allocable to New York because she was qualified to practice law only in New York. She asserts that she was not paid by Libra Leather for performing legal services. She contends that she gave advice to her son -- "business advice, legal advice and financial advice ... but did not appear in court for Libra or engage in any other activities restricted to attorneys admitted to practice in New York" (Petitioner's reply brief, p. 10).

 

            *34      O. Petitioner's argument that she was not performing legal services for Libra Leather is without merit. The practice of law is not limited to appearing in court on behalf of a client. Attorneys are called upon by their clients to render all types of services which include, inter alia, the drafting and reviewing of documents, the interpretation of Federal and State codes and regulations, giving legal advice and rendering legal opinions on various issues. Petitioner testified that the nature of Libra Leather's business was such that there were a lot of legal questions, credit questions and questions concerning the classification of hides which she answered. Mitchell Alfus, in his affidavit, stated that Libra Leather paid his mother "an annual retainer to advise us on various legal and commercial activities in which she had extensive expertise." Petitioner testified that she is admitted to practice law in New York State only. In addition, her representative, in a letter to the auditor, stated that petitioner provided "legal advice on a consultancy basis" to Libra Leather. It is clear from the record that petitioner earned the income at issue by providing legal services. Therefore, the income petitioner earned in 1986 and 1987 from Libra Leather was attributable to a profession carried on in this State and is subject to New York State and City taxes (see, Matter of Vigliano, Tax Appeals Tribunal, January 20, 1994).

 

            Thus, even if petitioner were to be determined to be a nonresident, the income she earned in 1986 and 1987 from Libra Leather must be allocated as New York source income totally.

 

            P. Petitioner asserts that if she is determined to be a resident of New York in 1986 and 1987, it would be inappropriate for the Division to impose penalties in this matter. She maintains that she "had ample reason for treating herself as a nonresident of New York in 1986 and 1987; she had abandoned New York in 1980 and had never considered New York home or maintained a permanent place of abode in New York thereafter" (Petitioner's brief, p. 24). She also argues that she "did not even approach the 'day count' limit of 183 days in New York in either of the years in question" (Petitioner's brief, p. 24). Furthermore, she contends that the Division has failed to carry its burden of proving that penalties are appropriate in this instance.

 

            The Division contends that petitioner has failed to put forth any evidence or testimony to establish reasonable cause for the waiver of the penalties assessed pursuant to Tax Law §  685(b)(1), (2) and (p) in the Notice of Deficiency.

 

            Petitioner bears the burden of proving that the deficiency was not due to negligence, that there was reasonable cause for the substantial understatement of income tax, or part thereof, and that the taxpayer acted in good faith (Tax Law §  685[b], [p]; §  689[e]). The issue of domicile is a legal one, albeit driven by the facts of the case. Petitioner's failure to pay the tax herein was due to a different legal interpretation from that of the Division. The failure to pay tax due to a different legal interpretation of a statute need not be considered reasonable cause. If it were so considered, the Division would rarely be entitled to levy such penalties (Matter of Auerbach v. State Tax Commn., Sup Ct, Albany County, March 27, 1987, Williams, J., affd 147 AD2d 390, 536 NYS2d 557). Petitioner has not sustained her burden of proof. She has failed to prove that she changed her domicile and, in addition, both the 799 Park Avenue apartment and the Lake Mahopac residence were permanent places of abode within the meaning of 20 NYCRR former 102.2(e)(1).

           

            *35      The Division properly assessed the negligence penalties and the substantial understatement of tax penalty.

 

            Q. Tax Law §  683(a) provides as follows:

   "Except as otherwise provided in this section, any tax under this article shall be assessed within three years after the return was filed (whether or not such return was filed on or after the date prescribed)."

 

            R. Tax Law §  683(c)(2) provides as follows:

   "Where, before the expiration of the time prescribed in this section for the assessment of tax, both the tax commission and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon."

 

            S. At the hearing, petitioner's representative noted that there were jurisdictional problems and requested permission to amend the pleadings to conform to the proof.

 

            As an alternative argument, petitioner asserts that the statute of limitations for assessment of taxes had expired for tax year 1987 prior to the Division's issuance of the Notice of Determination on March 23, 1992 and, therefore, its assessment of taxes for that year must be cancelled as time barred.

 

            Petitioner is correct; the statute of limitations had expired for the 1987 tax year prior to the Division's issuance of the assessment. In the instant case, the Division did not supply copies of its jurisdictional documents to either petitioner or her representative until these documents were introduced into evidence. Included in the jurisdictional documents were petitioner's 1987 New York State nonresident income tax return and three consents executed by either petitioner or her representative extending the statute of limitations for assessment of personal income taxes. Petitioner filed her 1987 New York State nonresident income tax return on October 15, 1988 under a valid extension. The first two consents extended the period of limitations for assessment of personal income taxes for the tax year 1986 only. However, the last consent was to extend the statute of limitations for assessment of personal income taxes for both the 1986 and 1987 tax years until April 15, 1992. Petitioner executed the consent on October 31, 1991 and the Commissioner's representative executed it on November 4, 1991.

 

            Since petitioner had filed her 1987 nonresident income tax return on extension on October 15, 1988, the Division was required to either assess petitioner for tax year 1987 or obtain her consent to an extension of the assessment period no later than October 15, 1991. The Division failed to do so. Instead, it first obtained petitioner's consent to extend the period of limitations for assessment of 1987 personal income taxes on October 31, 1991, after the statute of limitations had run. Petitioner's consent cannot reopen the statutory period once it has expired.

 

            *36      The Division improperly assessed personal income taxes for tax year 1987 after the statute of limitations had run.

 

            T. The petition of Marjorie Alfus is granted to the extent indicated in Conclusion of Law "S" and in all other respects is denied. The Notice of Deficiency, dated March 23, 1992, is sustained for tax year 1986 and is cancelled for tax year 1987.