ALJ UPHOLDS DENIAL OF PERSONAL INCOME TAX DEDUCTIONS

A New York State ALJ has found that an individual taxpayer failed to establish that he was entitled to the itemized deductions that he claimed for charitable contributions, job expenses for cleaning suits he wore to work, commuting, and for gambling expenses for nonwinning lottery tickets. Matter of Abraham Massil, DTA No. 828399 (N.Y.S. Div. of Tax App., July 11, 2019). With regard to the job expenses for commuting and dry cleaning, the ALJ found that commuting costs between home and office are “simply not deductible,” and that Mr. Massil failed to make the necessary demonstration that the dry cleaning expenses were for clothing that was required for or essential to his employment and could not be used for general wear. The deduction for the gambling expenses of nonwinning lottery tickets was disallowed because a “casual gambler” such as Mr. Massil, who was not engaged in gambling as a trade or business, is not permitted under federal or New York State law to reduce adjusted gross income by gambling losses and expenses.A New York State ALJ has found that an individual taxpayer failed to establish that he was entitled to the itemized deductions that he claimed for charitable contributions, job expenses for cleaning suits he wore to work, commuting, and for gambling expenses for nonwinning lottery tickets. Matter of Abraham Massil, DTA No. 828399 (N.Y.S. Div. of Tax App., July 11, 2019). With regard to the job expenses for commuting and dry cleaning, the ALJ found that commuting costs between home and office are “simply not deductible,” and that Mr. Massil failed to make the necessary demonstration that the dry cleaning expenses were for clothing that was required for or essential to his employment and could not be used for general wear. The deduction for the gambling expenses of nonwinning lottery tickets was disallowed because a “casual gambler” such as Mr. Massil, who was not engaged in gambling as a trade or business, is not permitted under federal or New York State law to reduce adjusted gross income by gambling losses and expenses.

ALJ FINDS PETITIONER FAILED TO PROVE CHANGE OF DOMICILE

An ALJ has rejected a doctor’s claim that he had changed his domicile from New York to Michigan when he accepted a position as Chief of Neurology with the Veterans Administration in Iron Mountain, Michigan, finding that the doctor had failed to make the necessary demonstration of a subjective intent to abandon his historic New York domicile and establish a new domicile in Michigan. Matter of Jeremiah H. & Jung J. Yim, DTA No. 827687 (N.Y.S. Div. of Tax App., June 27, 2019). The ALJ found that, to the contrary, the testimony of the petitioner — who appeared pro se — established that his sole motivation for moving was to earn enough money to support his family, that he left New York with only a backpack and continued to keep all his significant belongings in New York, and that he returned from Michigan to New York at the end of his twoThe Tribunal . . . noted that each of the IDA letters stated that the total project costs “cannot exceed” the estimated project costs, and found that it was reasonable to limit the benefit to the estimated sales tax exemption amount. 6 MoFo New York Tax Insights, August 2019 year employment contract. Therefore, the ALJ found no evidence that the petitioner had intended to make Michigan his permanent home “with the ‘range of sentiment, feeling and permanent association’ which indicate the establishment of a new domicile.”

TAXPAYER BILL OF RIGHTS HELD INAPPLICABLE TO TAXPAYER’S TIME-BARRED REFUND CLAIM

An ALJ rejected as untimely a tobacco distributor’s tobacco products tax refund claim where the application was made in December 2010, more than two years after the tax had been paid for the periods June 2006 through May 2007, beyond the refund limitation period. Matter of Core-Mark Midcontinent, Inc., DTA No. 827490 (N.Y.S. Div. of Tax App., July 11, 2019). The ALJ also rejected the taxpayer’s alternative claim for relief under the statutory Taxpayer Bill of Rights, which requires that the Department disclose to the taxpayer any overpayments of tax discovered during the course of an audit. The ALJ found that the taxpayer did not prove that the Department had discovered any tax overpayments while the statute of limitations was still open, and noted that the taxpayer’s refund claim did not state the amount of the claimed overpayment or provide any other detail regarding the claims.