Although decisions of the Tax Appeals Tribunal cannot be appealed by the Department, the Tribunal’s rules of practice do permit either party, within four months of a Tribunal decision, to file a motion to reargue. Motions to reargue a Tribunal decision are rare, and the Tribunal’s granting of such motions even rarer. Therefore, it is noteworthy that the Tribunal has recently granted the Department’s motion for reargument in Matter of John Gaied (Order and Opinion) DTA No. 821727 (N.Y.S. Tax App. Trib., Feb. 24, 2011), a decision involving the “permanent place of abode” definition for statutory residency.

On July 8, 2010, the Tribunal issued a decision in Gaied, reversing an Administrative Law Judge determination, which held that a New Jersey domiciliary who owned a second home in Staten Island, New York did not maintain a permanent place of abode there for purposes of the statutory residency test. The Staten Island home was divided into two apartments. The taxpayer leased out one apartment; the other was occupied by his parents. The taxpayer worked near the Staten Island home, would occasionally stay overnight at the apartment where his parents lived, and filed his tax returns as the head of the household listing his parents as his dependents. The Department took the position that the home was the taxpayer’s permanent place of abode, and that he was a statutory resident of New York City. The ALJ agreed.

On appeal, the Tribunal reversed the ALJ’s decision, and held that the Staten Island home was not the taxpayer’s permanent place of abode because it was occupied by his parents, he did not maintain living quarters at the apartment, including a bedroom or a bed, and did not have any personal effects there. Matter of John Gaied, DTA No. 821727 (N.Y.S. Tax App. Trib., July 8, 2010). In reaching its decision, the Tribunal concluded that “the physical attributes of an abode, as well as its use by a taxpayer, are determining factors in defining whether [an abode] is permanent.”

Within the four-month period permitted under the Division of Tax Appeals rules, the Department filed a motion to reargue the case, principally on the basis that the Tribunal misapplied legal principles. In particular, the Department cited to the Tribunal’s decision in Matter of Robert and Judith Roth, DTA No. 802212, (N.Y.S. Tax App. Trib., Mar. 2, 1989), which held that in order for an abode to be considered a permanent place of abode, “[t]here is no requirement that the petitioner actually dwell in the abode, but simply that he maintain it.” The Department argued that the Tribunal’s decision in Gaied could not be reconciled with its decision in Roth, and with other decisions of the Tribunal, and it urged that if the Tribunal was now departing from Roth, it should clarify the change and its reasons for doing so. The Department also argued that the Tribunal misapprehended certain facts.

The Tribunal granted the Department’s motion to reargue. The Tribunal first discussed the standard for motions to reargue, permitted under the Tribunal’s rule 20 NYCRR 3000.16(c), which gives discretion to the Tribunal to allow a party to demonstrate that the Tribunal “‘overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law.’” (Citation omitted). The Tribunal concluded here that the Department had met this standard, noting “the unique issues of fact within this case, as well as the need for clarity in the terms defining statutory residency.” The case will presumably now be set for reargument.

Additional Insights. As noted above, it is highly unusual for the Tribunal to grant motions to reargue, particularly where, as here, the same Commissioners who decided the case are the ones who have now granted the Department’s motion. It is even more surprising here inasmuch as the Tribunal had reversed the ALJ decision, and clarified or recast several of the unusual facts in the case. Given the Tribunal’s willingness to hear the Department’s reargument, it would not be surprising to see significant changes to the outcome of the case, or at least to the Tribunal’s analysis. As a possible point of reference, in Matter of E. Randall Stuckless, DTA No. 819319 (N.Y.S. Tax App. Trib., Aug. 17, 2006), after granting the Department’s motion to reargue, the Tribunal concluded that the Tribunal’s earlier decision was in error and withdrew it, replacing it with a new decision.

The Department argued that the Tribunal’s decision in Gaied could not be reconciled with its decision in Roth

The new decision, applying a different legal analysis, still held for the taxpayer. If the Tribunal concludes here that the taxpayer proved that he did not have meaningful access to the apartment occupied by his parents, however, it is difficult to see how the Tribunal will reach a different result.

It should be noted that while taxpayers also have the ability to file a motion to reargue, a motion does not stay the timeliness requirements for filing an Article 78 appeal. In addition, the Tribunal cannot grant a motion to reargue once an Article 78 appeal has been filed.