Updates from Katz Baskies & Wolf – August 2022 – New York Begs to Differ on Florida Domicile

You Think You Reside in Florida – Does New York? 

Thomas and Joan Bonaface informed the State of New York that they had relocated from their home in Pine Bush, New York to Taveres, Florida on June 11, 2013.  They were selected for a tax audit by the Division of Taxation for the period January 1, 2013 through December 31, 2015.  In response to the Information Document Request, the accountant for Mr. and Mrs. Bonaface provided, among other information:

• An email asserting that a Florida residence had been purchased, they had registered to vote in Florida, changed their drivers’ licenses, bought a car from a Florida dealer, and executed new wills in Florida
• A chronology of the Petitioner’s whereabouts gleaned from charge card statements
• A comparison of the size and cost of the Florida residence as compared to the New York residence
• Bank statements
• Medical records
• Cell phone records
• Boniface was an avid classic care collector, so information that the collection was moved to Florida

Seems like all of the items on the domicile checklist were ticked off, right?  NOT SO FAST, MY FRIEND.

Under New York tax law, the State of New York retains the right to tax a “resident individual”.  A resident individual is defined as (1) an individual who is domiciled in New York, or (2) an individual who is not domiciled in New York but maintains a “permanent place of abode” and spends in the aggregate more than 183 days in the State.

Since the Tax Authorities conceded that the Bonaface’s spent less  than 184 days in New York, the only grounds to challenge their residency was to determine whether they qualified as domiciliaries of New York.

Under the law, a “domicile” (the place which an individual intends to be such individual’s permanent home), once established, continues until the individual moves to a new location with the bona fide intention of making such place the individual’s fixed and permanent home.  But the burden is on the individual to evidence such a change by clear and convincing evidence.  Under the procedural rules to fulfill the burden of proof, affidavits of relevant facts may be received in lieu of in-person testimony.

In this case, the Court held that the Boniface’s neither testified nor submitted affidavits supporting their claim they had changed their domicile to Florida.  Their evidence consisted of emails and unsworn statements made primarily by the accountant on their behalf.  In order to determine whether the Boniface’s formed the necessary intent to abandon New York and adopt  a new domicile in Florida, the absence of any sworn statements or testimony explaining the significance of the documents was hearsay and entitled to little weight.  Consequently, the determination that the Boniface’s were resident individuals for New York State income tax purposes, as domiciliaries of New York,  was sustained, and they owed New York state income tax on  their worldwide income for the years under audit.

MORAL OF THE STORY: The proof is in the pudding, and the pudding is the proof.  A description of the pudding is not enough to establish the facts necessary to prove an intent to abandon New York and adopt a new domicile in Florida.

Matter of Thomas A. & Jean Boniface,  DTA No. 829018 (N.Y.S. Tax App. Trib., June 30, 2022)