Matter of TWEED
DTA No. 812469; TSB-D-96-(10)I
STATE OF NEW YORK-TAX APPEALS TRIBUNAL
May 23, 1996
OPINION: The first issue in this case is whether petitioner was a resident of New York City during 1986 and 1987 so that he was subject to the tax imposed by section 11-1701 of the Administrative Code of the City of New York. A New York City resident is defined by section 11-1705(b)(1) of the Administrative Code of the City of New York, in part, as an individual:
"(A) who is domiciled in this city, unless: (i) he maintains no permanent place of abode in this city, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this city . . . or
"(B) who is not domiciled in this city but maintains a permanent place of abode in this city and spends in the aggregate more than one hundred eighty-three days of the taxable year in the city."
The Administrative Law Judge concluded that petitioner proved that "he did not intend to acquire a New York City domicile and in fact did not acquire such a domicile at any time during the years at issue" (Determination, conclusion of law "F"). However, the Administrative Law Judge also concluded that petitioner failed to prove that he was not present in New York City for more than 183 days [*18] during each of the years at issue and, therefore, held that petitioner was a statutory resident under Administrative Code section 11-1705(b)(1)(B) during 1986 and 1987.
In his exception, with respect to 1986, petitioner points out that the Division's Nonresident Audit Guidelines, adopted in June of 1994 provide, at section .20, that "an individual who maintains a permanent place of abode in New York State must maintain such abode 'for substantially all the taxable year.'
For this purpose, substantially all the taxable year means a period exceeding eleven months. For example, an individual who acquires a permanent place of abode on March 15 of the taxable year and spends 184 days in New York State would not be a statutory resident since the permanent place of abode was not maintained for substantially the entire year" (Petitioner's exception, p. 25, quoting Division's Nonresident Audit Guidelines). Because petitioner did not begin sharing the cost of the apartment in New York City with Mr. Spelman until December of 1986, petitioner contends that he did not maintain a permanent place of abode for substantially all of 1986 and cannot be considered a statutory resident for 1986. [*19] In response, the Division states that "the audit guidelines promulgated in 1994 have no bearing on this case which was concluded by the auditor in 1991" (Division's brief in opposition, p. 4).
While we would agree with the Division that the Audit Guidelines adopted after the audit was conducted could not be used as a basis to criticize the audit methodology (see, Matter of Veeder, Tax Appeals Tribunal, January 20, 1994), we do not agree that the Audit Guidelines are completely irrelevant to this case.
Instead, the Guidelines are relevant for the limited purpose of guiding us in determining what the phrase "maintaining a permanent place of abode" means. The value of the Guidelines as an aid in interpretation is especially meaningful in this case because we have found no other authority which defines the duration of a permanent place of abode. The applicable regulations, former 20 NYCRR 102.2(e), incorporated by New York City pursuant to 20 NYCRR 290.1, are silent on the question of duration, except to say that a place of abode is not permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose.
Thus, relying on the Audit Guidelines simply [*20] as an aid in interpreting the statute, we conclude that the apartment maintained by petitioner for one month of the taxable year was not a permanent place of abode within the meaning of section 11-1705(b)(1) of the New York City Administrative Code and that petitioner was not a resident of New York City during 1986.
With respect to 1987, the Administrative Law Judge concluded that petitioner's evidence was inadequate to establish that petitioner was present in New York for less than 183 days. In reaching this conclusion, the Administrative Law Judge noted that petitioner conceded that he worked 154 days in New York during 1987 and therefore his "margin of error on this issue is quite thin" (Determination, conclusion of law "H"). In addition, the Administrative Law Judge pointed out that petitioner's evidence consisted of general, nonspecific testimony that was not supported by documentation and that documentation was especially important in this case because on any given day petitioner could easily have been present in the City and on Long Island.
The Administrative Law Judge also stated that the weight of the testimony offered by petitioner was impaired by inconsistencies between [*21] this testimony and other information in the record which indicated that petitioner was present in the City more often than he claimed.
On exception, petitioner argues that he has "submitted adequate data by means of independent witnesses to substantiate his activities to prove that he is not a New York City resident during the audit period" (Petitioner's brief in support, p. 9).
We affirm the determination of the Administrative Law Judge with respect to 1987. The Administrative Law Judge found the testimony inadequate. Generally, we defer to the Administrative Law Judge's evaluation of the credibility of a witness because the Administrative Law Judge has the ability to observe the witness first hand (Matter of Spallina, Tax Appeals Tribunal, February 27, 1992). We see nothing in the record before us that would cause us to disagree with the Administrative Law Judge's evaluation in this matter. Therefore, we find that petitioner failed to prove that he was not a statutory resident of New York City for 1987.
Next, petitioner renews his contention that the Division's failure to call as a witness the auditor that performed the audit deprived petitioner of his constitutional right [*22] to confront his accuser.
Relying on Matter of Mira Oil Co. v. Chu (114 AD2d 619, 494 NYS2d 458, lv denied 68 NY2d 602, 505 NYS2d 1026) and Matter of Anray Service (Tax Appeals Tribunal, December 1, 1988), the Administrative Law Judge stated that the Division was not required to produce the auditor that performed the audit. We affirm the determination of the Administrative Law Judge on this issue for the reasons stated in the determination.
Lastly, petitioner asserts that penalties should be abated because he relied on his accountant for advice in filing the return for 1987. Reliance upon advice from a professional does not in itself insulate a taxpayer from penalties (Matter of 1230 Park Assocs. v. Commissioner of Taxation & Fin., 170 AD2d 842, 566 NYS2d 957, lv denied 78 NY2d 859, 575 NYS2d 455); therefore, we affirm the determination of the Administrative Law Judge sustaining the penalties.
Accordingly, it is ORDERED, ADJUDGED and DECREED that:
1. The exception of Gary Tweed is granted to the extent that the deficiency with respect to 1986 is cancelled, but the exception is in all other respects denied;
2. The determination of the Administrative Law Judge [*23] is modified to the extent indicated in paragraph "1," but is otherwise affirmed;
3. The petition of Gary Tweed is granted to the extent indicated in paragraph "1" above, but is otherwise denied; and
4. The notice of deficiency for 1986 is cancelled and the notice of deficiency for 1987 is sustained.
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