In yet another reminder of the hurdles that individuals face in New York statutory residency audits, a New York State administrative law judge has held that a Connecticut domiciliary with an apartment in New York City, who worked in Manhattan, failed to prove that he was not present in New York City for more than 183 days, and was therefore a New York State and City statutory resident. Matter of Thomas P. and Kathleen H. Puccio, DTA No. 822476 (N.Y.S. Div. of Tax App., Jan. 27, 2011).

The petitioner and his wife were domiciled in Weston, Connecticut. They also owned a cooperative apartment in Manhattan. The petitioner worked as a lawyer in Manhattan. For the 2003 tax year, he filed a New York State non-resident return reporting that he was present in New York State for 115 days, and paying New York State tax on his New York source income (there is no New York City tax on nonresident individuals). The Department audited the return and concluded that he was a statutory resident of both New York State and City.

The parties agreed that the petitioner was present in New York City for 111 days, and outside for 80 days, leaving 174 days in dispute. At the administrative hearing held in 2010, the petitioner testified regarding his whereabouts on each of those 174 days, aided principally by credit card charges and, to a lesser extent, by E-ZPass statements. Among the more complicating facts that the petitioner had to overcome were:

  • There were various credit card charges in New York City on days the petitioner testified he was outside New York and that he testified were charges made by others.
  • E-ZPass statements covering four E-ZPass tags for the petitioner’s account that showed travel into and out of New York City on certain days when the petitioner testified that he was not in the vehicle and that the travel involved his driver or his former law partner.
  • There were several FedEx shipments from the petitioner’s Manhattan law office on days that he testified he was not in the office.  

In addition to the petitioner’s testimony, several affidavits were submitted into evidence. One was from the general manager of a restaurant at the Manhattan club that the petitioner belonged to, stating that restaurant credit card charges on particular days did not necessarily mean the member was at the restaurant that day. Affidavits from a pharmacy, hardware store and liquor store in Connecticut provided details about particular days. An affidavit from a Manhattan video store owner stated that, to the best of his recollection, the petitioner never made in-person payments at the store, rebutting in-City credit card charges made by the petitioner at that store.

The ALJ found that the petitioner proved he was outside New York State and City on only 65 of the 174 days in dispute. As a result, there remained 109 undocumented days which, when added to the 111 days the petitioner admitted to being in the City, necessarily meant he was present in the State and City for 220 days during the year, in excess of the 183-day threshold, and was therefore a statutory resident of New York State and City.  

the fact that the petitioner had credit card charges in Connecticut “[did] not necessarily mean that [he] could not have also been in New York City the same day.”

In weighing the facts, the ALJ observed:

  • Notwithstanding that the petitioner’s pattern of conduct was to stay in Connecticut on weekends, based on the proximity of his home in Connecticut to his New York City office and co-op apartment, the fact that the petitioner had credit card charges in Connecticut “[did] not necessarily mean that [he] could not have also been in New York City the same day.” This conclusion relates to apparent discrepancies in which there were charges in both Connecticut and New York City on the same day.
  • The ALJ gave little probative value to affidavits that did not provide a basis for certain conclusory statements regarding particular dates. The ALJ even gave reduced weight to an affidavit that contained typical language that it was made “to the best of [the affiant’s] recollection.” The ALJ also noted the absence of testimony or an affidavit of the petitioner’s law office assistant, who had notarized other affidavits in evidence.
  • As for the E-ZPass records, the ALJ found that the absence of third party testimony or affidavits explaining why the New York City bridge and tunnel toll charges made on four different E-ZPass tags were not made by the petitioner compelled him to conclude that the petitioner was present in the vehicle on every day on which a New York City charge appeared.  

As to the weight given to the petitioner’s testimony, the ALJ concluded:

[The facts discussed above,] along with the proximity of petitioner’s Connecticut home to the cooperative apartment and law office in New York City and the frequent travel between his Connecticut residence and New York City, diminish the weight to be given to petitioner’s testimony, especially where it contrasts with the documentary evidence.

Additional Insights. This is the first ALJ decision involving a petitioner’s burden of proof on the day-count issue since the Tax Appeals Tribunal’s decision in Matter of Julian H. Robertson, DTA No. 822004 (N.Y.S. Tax App. Trib., Sept. 23, 2010). In Robertson, the Tribunal held that there need not be a definitive document establishing one’s whereabouts on every day, and that the evidence should be evaluated based on a combination of testimony in light of surrounding events which aid the person in recalling the events on a particular date. One hurdle in Puccio was the sheer number of apparent conflicts between the documentary evidence and the petitioner’s truthful, but sometimes unspecific, testimony. Moreover, while Robertson involved only a handful of disputed days, in Puccio there were 174 disputed days. This necessarily imposes a much greater burden on a petitioner when testifying about his or her whereabouts on specific days several years earlier.

The Puccio decision may yet be appealed to the Tax Appeals Tribunal.