Residence?

April 20th, 2024| Topic: RaMbLeS | 0

Tax time deadline was midnight, last Monday, April 15, 2024. And when it comes to taxes, for the wealthy, and where you are each minute matters.

According to Bloomberg, at New Jersey’s Teterboro and Long Island’s Islip airports, dozens of private jets destined for Florida took off at times such as 23:42 or 23:54, shortly before midnight. Tax attorneys tell stories of clients idling in their luxury SUVs near the New Jersey entrance to the George Washington Bridge shortly before 12:00 midnight, waiting for the clock to turn before crossing the state line to New York.

Why?

Because of “residency audits” conducted by the tax apparatus in New York state—investigations that determine whether someone correctly identified themselves as a full-time, part-time, or nonresident for income-tax purposes. New York’s auditors closely watch travel and apply a standard known as “the teddy bear test,” looking to see in which state individuals keep their most cherished possessions—even pets and Pelotons—to determine whether a home is their primary residence.

Said Mark Klein, a tax attorney:

We always tell people the tax audit from New York is like the tax version of a colonoscopy. I’ve had cases that have hinged on a single dog.”

Those earning over $1 million each year made up just 2 percent of tax filers, but paid 45 percent of New York state’s total personal income taxes in 2021. So the whereabouts of the wealthy are particularly important.

Confessed Amanda Hiller, the New York state’s acting tax commissioner:

We are incredibly reliant on New York’s high earners for our income tax revenue.”

Typically, someone who lives in New York state will be considered a resident for tax purposes, paying levies on their income from all sources, even those outside of the state. But the state considers someone a resident even if they don’t live there, as long as they’ve spent more than 183 days in New York and maintain a “permanent place of abode,” which could simply be a vacation home. Even a few hours spent in New York qualifies as a whole day. Getting off the highway in New York for lunch while driving from New Jersey to Connecticut can count. So can getting outpatient treatment at a New York hospital. When you can’t prove where you were on a given day, New York auditors may assume you were in the state.

Residency audits have long been big business in New York. The state collected roughly $1 billion from 15,000 audits between 2013 and 2017, according to data obtained through a Freedom of Information request. New York’s Department of Taxation and Finance has 300 auditors dedicated to conducting residency audits, and they are notorious for their thoroughness. Bank records, phone bills and family photos are under the microscope.

So a cottage industry is rising to serve the taxpayers navigating these issues. There’s TaxDay, that tracks users’ locations so they don’t overstay the threshold of days that would trigger residency status. Chrono uses biometric data to prove users’ whereabouts, launched in 2021. Another tracker, Monaeo, automatically logs users’ locations to create detailed records of their whereabouts.

Where do we reside?

One thing I have asked from Yahweh—that I shall seek:
for me to dwell in the house of Yahweh all the days of my life,
to behold the beauty of Yahweh, and to contemplate in His temple.
For He will conceal me in His shelter in the day of evil;
He will hide me in the hiding place of His tent;
on a rock He will lift me high.
Psalm 27:4–5

The best place!

SOURCE: MSN; Bloomberg