William D. & Christine J. Evans v. Commissioner of Revenue (January 28, 2013)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD

WILLIAM D. & CHRISTINE J. EVANS   v.     COMMISSIONER OF REVENUE

Docket Nos. C298827 & C310439			 Promulgated:
								 January 28, 2013


	These are appeals filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 62C, § 39 from the refusal of the appellee, the Commissioner of Revenue ("Commissioner"), to abate personal income taxes assessed to William D. and Christine J. Evans (jointly, "appellants") for the tax years 2001, 2002, 2003, 2004, and 2005 ("tax years at issue").
	Commissioner Rose heard these appeals. Chairman Hammond and Commissioners Scharaffa, Mulhern, and Chmielinski joined him in the decision for the appellants for docket number C310439 (tax year 2005). For docket number C298827 (tax years 2001, 2002, 2003, and 2004), Commissioner Rose was joined in a decision for the appellants by Chairman Hammond and Commissioners Scharaffa and Chmielinski.
	These findings of fact and report are made pursuant to a request by the appellants under G.L. c. 58A, § 13 and 831 CMR 1.32.

William E. Halmkin, Esq., and Judith G. Edington, Esq. for the appellants.

Mirielle T. Eastman, Esq., Celine E. Jackson, Esq., and Kajal Chattopadhyay, Esq. for the appellee.



FINDINGS OF FACT AND REPORT

I. Procedural History and Jurisdiction
Docket No. C298827 (Tax Year 2001)
	On August 15, 2002, the Commissioner received the appellants' timely filed 2001 Massachusetts Non-Resident/Part-Year Resident ("NR/PY") tax return. The appellants reported on that tax return that they were Massachusetts residents for only one day, January 1, 2001, and also reported having no Massachusetts income tax liability for 2001. 
On January 12, 2005, the Commissioner began an audit of the appellants' 2001 tax return.  By Notice of Intent to Assess ("NIA") dated July 15, 2005, the Commissioner notified the appellants of her intention to assess additional taxes in the amount of $102,057, plus interest, for tax year 2001. The appellants requested a pre-assessment conference with the Department of Revenue's Office of Appeals, and also executed a consent form extending the time for the Commissioner to assess taxes until 90 days after the issuance of a Letter of Determination by the Office of Appeals.  A conference was held on October 25, 2005.  Following the conference, the Office of Appeals issued a Letter of Determination dated March 13, 2006, informing the appellants that the assessment would stand.  On March 21, 2006, the Commissioner assessed the taxes proposed in her NIA to the appellants, along with interest, and notified the appellants of this assessment by Notice of Assessment ("NOA") dated March 22, 2006. On January 9, 2007, the appellants filed an Application for Abatement and requested a post-assessment hearing, but the request was denied because they had been granted a pre-assessment conference.  By Notice of Abatement Determination dated September 12, 2008, the Commissioner denied the appellants' abatement application. The appellants timely filed a petition with the Board on November 10, 2008. 
	On the basis of the foregoing, the Appellate Tax Board ("Board") found and ruled that it had jurisdiction over the 2001 appeal.
Docket No. C298827 (Tax Years 2002 through 2004)
	On or around March 23, 2006, the Commissioner began an audit of the appellants for tax years 2002 through 2004.  The appellants filed NR/PY returns for tax years 2002 through 2004 on May 2, 2006. The Commissioner issued an NIA dated August 15, 2006 to the appellants, informing them of her intention to assess additional taxes in the total amount of $120,348, along with interest and penalties, for tax years 2002 through 2004.  On September 29, 2006, the Commissioner assessed the taxes proposed in her NIA, along with penalties and interest, to the appellants, and by NOA dated October 2, 2006, she informed them of this assessment.  The appellants filed an Application for Abatement on January 9, 2007 and requested a post-assessment hearing for tax years 2002 through 2004.  A post-assessment hearing was held on December 14, 2007, and the Office of Appeals determined that the assessment was correct.  By Notice of Abatement Determination dated September 12, 2008, the Commissioner denied the appellants' Application for Abatement.  On November 10, 2008, the appellants timely filed a petition with the Board for tax years 2002 through 2004. 
	One the basis of the foregoing, the Board found and ruled that it had jurisdiction over the 2002, 2003, and 2004 appeals.
Docket Number C310439 (Tax Year 2005)
	On January 5, 2007, the Commissioner issued to the appellants a Notice of Failure to File for tax year 2005.  The appellants subsequently filed a 2005 NR/PY, which was received by the Commissioner on January 23, 2007. By NIA dated October 7, 2007, the Commissioner notified the appellants of her intention to assess taxes in the amount of $131,115, along with penalties and interest, for tax year 2005, and the appellants submitted a request for a pre-assessment conference with the Office of Appeals.  A conference was held on December 14, 2007, and by Letter of Determination dated September 5, 2008, the Office of Appeals notified the appellants of its determination that the assessment was correct. On September 23, 2008, the Commissioner assessed the taxes which had been proposed in her NIA to the appellants, along with penalties and interest, and informed the appellants of the assessment by NOA dated September 24, 2008. 
	The appellants timely filed an Application for Abatement and requested a post-assessment hearing, but later withdrew their request for the hearing.  By Notice of Abatement Determination dated January 11, 2011, the Commissioner informed the appellants that their request for an abatement was denied. The appellants timely filed an appeal with the Board on February 3, 2011.  On the basis of the foregoing, the Board found and ruled that it had jurisdiction over the 2005 appeal.
	The hearing of these appeals took place over three days and involved the testimony of six witnesses, all of whom testified for the appellants.  In addition to the testimony of both of the appellants, the Board heard the testimony of their friends Eric Mann, Karen Schillinger, Robert Kolikof, and Thomas Veronneau.  Based on the Statement of Agreed Facts, exhibits, and testimony offered into evidence at the hearing of these appeals, the Board made the following findings of fact. 
II. A. The Appellants' Personal History

William Evans was born in 1947.  After spending his childhood in Connecticut, he came to Massachusetts to attend Boston College, where he was a member of the basketball team.  Mr. Evans received a B.A. in business from Boston College in 1969.  Following his graduation, he moved to New York City for one year to play professional basketball for the New York Nets. He then moved back to Massachusetts to attend Boston College Law School. After receiving his law degree, he worked for XTRA Corporation in Massachusetts, first in the legal department and eventually for the "business side" of the company. 
Mr. Evans eventually left Massachusetts to work for ITEL Corporation ("ITEL") in Chicago, Illinois. He later left that position to work for a company called Signal Capital ("Signal"), which was located in Hampton, New Hampshire. During this time period, Mr. Evans became married and had two daughters, Marissa, who was born in 1984, and Rebecca, who was born in 1985. The family lived in Weston, Massachusetts.  He and his wife separated in 1991 and their divorce was finalized in 1996.  Following their divorce, Mr. Evans' ex-wife and daughters continued to reside at the home in Weston while Mr. Evans lived in rented apartments in Boston, Massachusetts.  
Mr. Evans testified that he tried to see his daughters regularly, although the divorce had made it difficult to do that.  Thanksgiving was the only holiday which Mr. Evans was able to spend with his daughters.  Mr. Evans testified that he maintained a membership at the Pine Brook Country Club ("Pine Brook") in Weston for the specific purpose of having a neutral place to visit with his daughters, rather than at the former family home.  
Signal was later acquired by Mr. Evans' former employer, ITEL, and as a result of that acquisition, Mr. Evans' position was eliminated. Along with other employees of Signal, he was provided with an outplacement package that included the use of an office located in Danvers, Massachusetts.  ITEL chose Danvers because it was convenient for former Signal employees, some of whom lived in New Hampshire and some of whom lived in the Boston area.  
	ITEL was later sold to General Electric Company ("GE"), but GE was not interested in acquiring ITEL's railroad car leasing division as part of the sale.  ITEL offered to sell that division to Mr. Evans, and he accepted the offer. In 1993, Mr. Evans purchased the railroad car division from ITEL and created two Delaware S corporations: MRX, which held title to the cars, and MRXX, which managed the cars held by MRX and third parties. Mr. Evans maintained the office in Danvers for his companies because it was a convenient location for his sole employee, Susan Hagen, who resided in New Hampshire. 
	Christine Jordan Evans was born in California in 1959.  She moved to Massachusetts for an employment opportunity with Apple Computer Corporation ("Apple") shortly after finishing college. Mrs. Evans was extremely successful at Apple, ultimately becoming Manager of Engineering Resources for Apple's K-12 division. By the age of 30, she was earning a substantial salary and was able to purchase her own home in Wellesley, Massachusetts.  
	Mr. and Mrs. Evans met in 1993 and began dating.  Not long afterwards, Mrs. Evans began experiencing physical disturbances such as numbness in her limbs, decreased dexterity, and gait problems.  In 1995, after consulting with several doctors, she was diagnosed with multiple sclerosis ("MS"), an incurable autoimmune disease.   
B. Lifestyle Changes Following Diagnosis of MS
Mrs. Evans testified that being diagnosed with an incurable, debilitating disease caused her to become fearful of her future.  She testified that she tried to learn as much as she could about MS, and her research led her to the Hippocrates Health Institute in West Palm Beach, Florida.  The Hippocrates Health Institute is an alternative health center which treats people with incurable diseases by prescribing a holistic regimen involving acupuncture, a diet of whole and raw foods, stress reduction, and body cleansing.  In 1996, Mrs. Evans took a sabbatical from her job at Apple to attend the Hippocrates Health Institute.  
After consulting with doctors both in Massachusetts and at the Mayo Clinic in Minnesota, Mrs. Evans selected Dr. Marion Stein at Beth Israel Deaconess Medical Center in Brookline as her MS specialist.  Mrs. Evans testified that she agreed with the approach to treatment favored by Dr. Stein.  After her sabbatical, Mrs. Evans returned briefly to her job at Apple, but found that the demanding schedule exacerbated her MS symptoms.  She soon realized that in order to better manage her disease, she was going to have to make major changes to her lifestyle.  Thus, in 1997, Mrs. Evans made the first of those changes: she quit her job at Apple.  
At or around the same time, Mr. Evans' mother, who lived in Pompano Beach, Florida, became ill.  Mr. and Mrs. Evans began spending increasing amounts of time in Florida to help care for her, and it was during this time period that they made two more major decisions regarding their lifestyle: they decided that they would get married and move to Florida.  
Mrs. Evans testified that she frequently experienced stumbles and falls, and that the icy sidewalks in Massachusetts presented a problem for her.  She found that extremely cold weather exacerbated the muscle spasms associated with MS, and medical literature that was introduced into the record corroborated her testimony.  In addition, she had learned through her research that getting adequate daily amounts of sunshine and vitamin D would be beneficial for her condition.  Further, through her research and the information that she gathered at the Hippocrates Health Institute, Mrs. Evans learned that she would best be able to manage her disease by living in a less stressful environment and one in which she would be able to be as physically active as possible.  Mr. and Mrs. Evans both testified that they considered moving to Mrs. Evans' native California, but ultimately decided to move to Florida, so as to be on the same coast as Mr. Evans' daughters, who continued to live in Weston with their mother.  
In preparation for the next chapter of their life, Mrs. Evans sold her house in Wellesley in 1999, and along with it, as much of her furniture as possible.  She later had a garage sale to dispose of whatever furniture remained after selling the house.  She began living with Mr. Evans at his apartment at 468 Beacon Street in Boston, which he had rented since 1995.  They were married in October of 1999 in California, where almost all of Mrs. Evans' very large extended family lived.  




C. The Appellants' Residences 
The appellants testified that they knew they wanted to live in Aventura, Florida because they had previously spent time in the area while caring for Mr. Evans' mother.  They also knew that they wanted to live in a high-rise building, and further, that they desired a convenient and accessible building which would accommodate Mrs. Evans' MS symptoms.  The appellants engaged a realtor to assist them in their search for a home in Florida.  That realtor first assisted them in finding a suitable rental apartment. 
In September of 2000, Mr. Evans leased, in the name of his company MRXX, a furnished apartment at 2000 Island Boulevard in Aventura, Florida.  The lease commenced on November 1, 2000 and expired April 30, 2001, and the monthly rent was $3,800.  Mr. Evans explained at the hearing that most of the furnished rentals in Florida were six-month rentals, as the units were typically owned by residents of South America, who lived in Florida during their cold season and returned to South America during the temperate months.  Evidence entered into the record showed that Mr. and Mrs. Evans arranged for their Mercedes to be transported from Massachusetts to Florida in the end of October of 2000, and that that same vehicle was transported back to Massachusetts in the end of April of 2001.  
Later in 2001, and also during 2002, 2003, and 2004, the appellants, through Mr. Evans' companies, rented a furnished apartment in Florida while actively looking for a home to purchase there.  The apartment was located at 7000 Island Boulevard in Aventura and the monthly rent was $4,750.  As they had before, the appellants arranged for their vehicle to be transported to Florida.  The appellants testified that they purchased household items such as linens, pillows, silverware, and plates to use in this rental apartment, and that they stored those items in a closet in the unit when they were not in Florida.
Although they concluded that they needed to relocate to Florida to better manage Mrs. Evans' MS, the appellants also concluded that they needed to retain a residence in Boston so that Mrs. Evans could continue to receive treatment from Dr. Stein, in whom she had the utmost confidence.  Thus, they retained the rental apartment at 468 Beacon Street in Boston, but changed the terms of the lease to an at-will tenancy.  
While renting at 7000 Island Boulevard in Aventura, the appellants noticed a new high-rise building being constructed nearby.  That building, named "Hampton South," was located at 20201 E. Country Club Drive in Aventura.  It was to be a brand new, full-service luxury building, offering valet parking, a staff that would carry packages and groceries to residents' apartments, and an in-house restaurant that would deliver meals.  Hampton South also had a swimming pool, a gymnasium, tennis courts, a party room, and a card room.  Although the appellants had concluded that they would purchase a unit at Hampton South, they could not enter into a purchase and sale agreement until the building was completed.  The appellants signed a purchase and sale agreement for their condominium at Hampton South ("Hampton South condo") on March 4, 2004.  The purchase price was $965,000.  
The Hampton South condo was a three-bedroom, four bathroom, one-level unit, with a total living area of 3,264 square feet.  It was on the 20th floor of the building, with panoramic views of the Atlantic Ocean and a golf course.  The Hampton South condo came with one deeded parking space, but the appellants negotiated to purchase a second parking space, close to the entrance, to better accommodate Mrs. Evans' gait problems.    
The appellants did not move into the Hampton South condo right away.  Photographs entered into the record showed that, as purchased, the unit was architecturally plain and devoid of detail, something Mr. Evans described as being "a box in the sky."  The appellants testified that because they intended to spend the rest of their lives there, they wanted the unit to reflect their style and taste, and thus, before even moving in, they commenced a massive renovation of the Hampton South condo.  
Substantial evidence was entered into the record demonstrating the large scale and cost of the renovations. The evidence included proposals and other communications from interior decorators, receipts for the purchase of furniture, lighting, and other fixtures, and letters from various contractors.  Karen Schillinger, a friend of Mrs. Evans from Florida who testified at the hearing of these appeals, stated that she assisted Mrs. Evans in making some of the decorating decisions for the Hampton South condo, and that they invested a considerable amount of time in making the selections. The appellants even hired a second interior decorator to make changes to the work done by the first interior decorator, whose style had been "too avant-garde" for their tastes.  
The total cost of the renovations was approximately $500,000.  Photographs entered into the record showed a complete transformation of the unit, from a space utterly devoid of detail to an elegant home with crown moldings, wainscoting, arched doorways with columns, and coffered ceilings. The renovations included adding walls, installing a home office for Mr. Evans, and changing the flooring to a material on which Mrs. Evans was less likely to trip.  In April of 2005, upon the completion of the renovations, the appellants had their best furniture moved from Massachusetts to the Hampton South condo.  These items included an expensive armoire, a lowboy, and a dining table.  Mr. Evans also had his horseracing artwork transported to the Hampton South condo, including one painting which he personally commissioned.  
Mr. Evans testified that, because the appellants had been spending less and less time in Boston, he became tired of paying $5,000 a month to rent the apartment at 468 Beacon Street.  However, the appellants believed that it was necessary to maintain a home in Boston so that Mrs. Evans could continue to receive treatment when necessary from Dr. Stein.  Mr. Evans therefore concluded that it made more sense to purchase a residence in Boston, and on May 28, 2004, the appellants purchased a condominium located at 249 Marlborough Street in Boston ("Marlborough Street condo"), for a purchase price of $1,039,000.  
The Marlborough Street condo was a two-bedroom, two-bathroom unit with 1,255 square feet of living area.  It was located on the third-floor and had elevator access.  However, the appellants found soon after moving in that the elevator was frequently broken, requiring a walk up three flights of stairs, a physical task which presented a problem for Mrs. Evans.  In addition, parking for the Marlborough Street condo was not located at the building, but three blocks away, which also presented a problem for Mrs. Evans.  Further, the floors in the unit were uneven, and Mrs. Evans, who had frequent, serious tripping episodes due to her MS, experienced additional tripping episodes in the unit as a result of the uneven floors.  Mr. Evans testified that he regretted his choice almost immediately after buying the Marlborough Street condo.  He stated that he called the realtor who had sold them the Marlborough Street condo, and told her, much to her surprise, that they wanted to put it back on the market.  
On November 12, 2004, less than six months after buying the Marlborough Street condo, the appellants signed a purchase and sale agreement for a condominium located at 348 Beacon Street in Boston ("Beacon Street condo") for a purchase price of $2,495,000.  The Beacon Street condo was a two-bedroom, two-bathroom unit, with 2,367 square feet of living area.  Mr. Evans testified that the Beacon Street condo was a much better choice for them, as it had easier access and parking located behind the building.  They were able to take occupancy of the Beacon Street condo in 2005, and they later sold the Marlborough Street condo.    
 	Lastly, prior to and throughout the tax years at issue, Mr. Evans owned a home on Nantucket ("Nantucket home").  Mr. Evans testified that he had acquired the Nantucket home with a partner as part of a business venture in 1990.  In 1997, the partnership was dissolved and Mr. Evans became the sole owner of the Nantucket home.  The Nantucket home was a multi-level residence featuring four bedrooms and three and one-half bathrooms, with a total living area of 2,864 square feet.  Its 2001 assessed value was $1,118,900.  
	At first, Mr. Evans rented the Nantucket home to third parties.  Mr. Evans continued to do this until his marriage to Mrs. Evans, after which time they made only personal use of the Nantucket home, usually during July and parts of August.  Mr. and Mrs. Evans testified that they spent part of the summer vacationing on Nantucket.  They also visited with Mr. Evans' daughters and various friends there.  Mrs. Evans testified that the couple allowed people to use the Nantucket home when they were not there, including her siblings from California, Mr. Evans' daughters, and various friends. 
The appellants did not spend all of August on Nantucket because Mr. Evans, a horse-racing enthusiast, preferred to go to Saratoga Springs, New York for most of August to attend the horse-racing events there.  Mr. Evans testified that the Nantucket home was "closed down" each year at the end of summer, and his testimony was corroborated by a letter from the caretaker who provided this service for the appellants. The process included draining the water pipes, turning off electricity or limiting it to essential uses, and sealing windows.  During the tax years at issue, the appellants did not take a residential tax exemption for any of their Massachusetts residences.  
D. Business and Ministerial Changes Made by the Appellants 
As part of the appellants' transition to Florida, Mr. Evans made certain changes to his businesses. MRX and MRXX were qualified to do business in Florida on November 16, 2000, and the lease for the office in Danvers, Massachusetts, was terminated in December of 2000. Thereafter, Susan Hagen, the companies' sole employee, worked out of an office in New Hampshire.  On October 22, 2001, the companies' registrations to do business in Massachusetts were withdrawn. 
In addition, Mr. and Mrs. Evans made certain ministerial changes in connection with their move to Florida.  Mr. Evans was issued a Florida driver's license on January 30, 2001 and Mrs. Evans was issued a Florida driver's license on February 5, 2001.  Both Mr. and Mrs. Evans registered to vote in Florida on March 28, 2001. 
E. The Appellants' Social Affiliations
Considerable testimony was entered into the record regarding the appellants' social lives. In Florida, the appellants were members of the Turnberry Country Club ("Turnberry") in Aventura, which they joined in 2001. Their membership to this club was a full-time membership, even though part-time memberships were available.  They later joined the Indian Creek Country Club ("Indian Creek") in nearby Indian Creek, Florida as well.      
Mr. Evans testified that he played golf several times per week with the same group of friends at Turnberry.  Mr. and Mrs. Evans became friends and socialized with other members of Turnberry, including Gloria Kolikof and her husband, Robert, who testified at the hearing of these appeals.  Mr. Kolikof stated that he and his wife socialized with Mr. and Mrs. Evans frequently, often dining or playing golf with them.  Mr. Evans also became friends with individuals he met at the Gulfstream Racetrack in nearby Hallandale, Florida, which he visited several times a week. Mr. Evans testified that he also socialized with these friends outside of the racetrack by playing golf or going out to dinner with them.
	Mrs. Evans joined the local Jewish Community Center ("JCC") in Florida.  Mrs. Evans first became familiar with the JCC prior to the tax years at issue, when she visited Florida to care for Mr. Evans' mother.  At the JCC, Mrs. Evans met and became close friends with a tight-knit group of approximately twelve women whom she would meet almost daily for coffee, lunch, or shopping.  They also took day trips and vacations together.  
Mr. Evans likewise became friends with this group of women from the JCC and their husbands, including Martine Mann and her husband, Eric, who testified at the hearing of these appeals.  Mr. Mann testified that the couples would meet for dinner or drinks, attend movies together, or visit each other at their respective homes.  He stated that his wife considered Mrs. Evans to be among her "best friends."  In fact, he stated they were so close that in October of 2002, Mrs. Evans participated in the bar mitzvah ceremony of their son, Justin.  Mr. Mann explained that this honor is usually reserved for family.  Further, Mrs. Evans testified that both she and Mr. Evans participated in local charitable events with their friends in Florida, including fundraisers for local schools and the Sylvester Cancer Institute.    
	In addition to pursuing social and charitable activities, Mrs. Evans continued to visit the Hippocrates Health Institute, the institution that played a large role in her decision to move to Florida.  She testified that she took water aerobics classes there because it helped manage her MS by improving her muscle strength. She also saw a doctor for her MS in Florida, but she testified that she did not like that doctor's approach to treating the disease as much as she liked the approach taken by Dr. Stein, her MS specialist in Massachusetts. Mrs. Evans also saw a dentist, a general practitioner, and an orthopedic doctor in Florida.  Mr. Evans saw doctors both in Florida and in Massachusetts during the tax years at issue.  
	In Massachusetts, the appellants became members of the Nantucket Golf Club during the tax years at issue, where they golfed during the summer. Mr. Evans testified that he did not have a consistent group of friends that he golfed with on Nantucket, unlike his regular golf group in Florida. In addition, Mr. Evans maintained his membership at Pine Book in Weston, where he golfed on occasion during the tax years at issue.  
F. The Board's Ultimate Findings of Fact on Domicile
	On the basis of the evidence presented, the Board found that the appellants met their burden of proving that they changed their domicile from Massachusetts to Florida as of the beginning of the tax years at issue.  The Board found credible the appellants' testimony that Mrs. Evans' diagnosis of MS spurred them to make sweeping changes to their lifestyle.  Those changes included Mrs. Evans quitting her job and selling her house in Wellesley so she could focus on her health; they also included moving to Florida.  
	The Board found that, beyond the testimony of the appellants, the record contained substantial indicia of the appellants' intentions to transition their domestic, social, and civil lives from Massachusetts to Florida.  In the fall of 2000, the appellants, through Mr. Evans' companies, leased an expensive, furnished rental apartment in Florida and arranged for one of their vehicles to be transported to Florida.  Also in the fall of 2000, in preparation for the move to Florida, Mr. Evans registered his businesses to do business in Florida, and at the same time, withdrew their registration to do business in Massachusetts.  He allowed the lease on the office in Danvers to expire, and thereafter leased an office in New Hampshire out of which his sole employee, Susan Hagen, worked.  
During 2001, 2002, 2003, and 2004, the appellants, through Mr. Evans' companies, continued to rent an expensive, furnished apartment in Florida while actively looking for a home to purchase there.  They found their desired home at Hampton South, but could not purchase that condominium until the completion of the building in 2004.  After paying $965,000 for the three-bedroom, four bathroom unit with a total living area of 3,264 square feet, the appellants spent approximately $500,000 carrying out extensive and detailed renovations of the Hampton South condo that took more than a year to complete and which dramatically transformed the interior of the condominium.  In addition, although the Hampton South condo came with one parking space, the appellants negotiated for an additional parking space located close to the building's entrance to better accommodate Mrs. Evans' physical limitations.  The Board found the extensive, detailed renovations of the Hampton South condo to be persuasive evidence that the appellants intended to make that residence their primary home rather than a vacation or secondary residence.  
Although the appellants maintained residences in Boston and on Nantucket throughout the tax years at issue, the Board found credible the appellants' reasons for doing so.  In particular, the Board believed the appellants' testimony that they maintained Massachusetts residences not because they desired to make Massachusetts the center of their domestic, social, and civil lives, but for Mrs. Evans to continue her relationship with her Boston-based MS specialist, Dr. Stein.  The Board did not find Mrs. Evans' continued relationship with Dr. Stein to be a compelling indicator of her place of domicile; the record showed that both Mr. and Mrs. Evans received medical treatment from physicians in Florida and in Massachusetts during the tax years at issue.  
The Board found that the appellants' Boston residence was primarily used as a "way station" for them; the place at which they stayed while Mrs. Evans was receiving medical care from Dr. Stein and the place from which they traveled to other destinations, such as upstate New York to visit Mr. Evans' daughters in college or to go to Saratoga Springs each year to partake in the horseracing events that Mr. Evans enjoyed.  Further, the Board found that the Nantucket home, which was purchased initially by Mr. Evans as a business investment, was never used or intended to be used by the appellants as a primary home; rather, the evidence showed that before and during the tax years at issue, the appellants used the Nantucket home as a vacation residence for only a portion of each summer, after which time it was closed down for the season by a caretaker. 
Moreover, the appellants did not claim a residential exemption on any of their Massachusetts residences during any of the tax years at issue.  A residential exemption is available for primary personal residences only and claiming the exemption would have entitled the appellants to a reduction in their real estate taxes.  The Board found this evidence to be another indication that the appellants did not consider any of their Massachusetts' residences to be their primary residence during the tax years at issue, but instead considered Florida to be their home.  
With respect to the appellants' social ties, the Board found credible the testimony of the appellants' many witnesses which revealed that the appellants developed extensive social connections in Florida soon after moving there.  The appellants became members of at least three social clubs in Florida: Turnberry, the JCC, and Indian Creek.  The appellants obtained a full-time membership to Turnberry, even though Turnberry offered part-time memberships.  Further, Mr. Evans regularly visited the Gulfstream Racetrack in Hallandale, Florida. 
The evidence showed that at these clubs, the appellants made a large circle of friends with whom they frequently engaged in such activities as golfing and dining.  Mrs. Evans in particular made numerous close friends at the JCC with whom she dined, shopped, traveled, and participated in local charitable events.  In fact, Mrs. Evans was close enough with at least one couple, Martine and Eric Mann, to have participated in their son's bar mitzvah ceremony in October of 2002. The Board found that the appellants made lasting and meaningful social connections upon moving to Florida.  
	Further, although Mr. Evans' relationship to his daughters was clearly important to him, the Board found that his ties to his daughters were not dispositive of the appellants' place of domicile.  Following his divorce from his first wife, Mr. Evans' daughters lived in Weston with their mother while he lived in Boston.  He did not live with them immediately before or during the tax years at issue, and he spent just one holiday - Thanksgiving - each year with them.  Moreover, the evidence showed that Mr. Evans' daughters, who became adults during the tax years at issue, were not even present in Massachusetts during much of the period in dispute. Both of his daughters moved to Ithaca, New York to attend Cornell University during the tax years at issue.  The evidence showed that Mr. Evans visited his daughters at college in New York and that they visited him in Florida.  The Board therefore found that Mr. Evans' ties to his daughters were not dispositive.  
Additionally, in early 2001, shortly after moving to Florida, the appellants registered to vote in Florida and obtained Florida driver's licenses.  The Board found that all of these actions, taken together, demonstrated the appellants' intentions to make Florida the center of their domestic, social, and civil lives indefinitely.  
	The Board was not persuaded by the Commissioner's case, which featured unsuccessful efforts to undermine the appellants' credibility and frequent reminders that the burden of proof lay with the appellants.  Moreover, there were factual misstatements in the Commissioner's post-trial brief, such as her claim that there were no "flight records" in evidence.  On the contrary, the appellants' credit card statements showed their flight patterns, and those flight patterns were consistent with their testimony and other evidence concerning when they were in Florida and Massachusetts during the tax years at issue.  For these reasons, the Board rejected the Commissioner's arguments.  
	In sum, on the basis of all of the evidence, the Board found that the appellants established a residence in Florida with the intention to reside there indefinitely.  The Board found that Florida became the center of the appellants' domestic, social, and civil lives.  The Board further found that the appellants left Massachusetts with no certain purpose to return other than for vacations, visits, and medical care.  Thus, the Board found that the appellants met their burden of proving that they had changed their domicile from Massachusetts to Florida.  
III. The Appellants Were Not Statutory Residents of 	  Massachusetts during the Tax Years at Issue

	Under G.L. c. 62, § (1)(f)(2) ("§ (1)(f)(2)"), a person who is not domiciled in Massachusetts can still be considered a Massachusetts resident for tax purposes.  So-called statutory residents are individuals who "maintain[] a permanent place of abode" and spend "more than [183] days" (emphasis added) in the Commonwealth during a taxable year.  G.L. c. 62, § (1)(f)(2). It was undisputed that the appellants maintained a permanent place of abode in Massachusetts during each of the tax years at issue; at issue between the parties was the number of days that the appellants spent in Massachusetts.  
The Commissioner asserted that the appellants were physically present in Massachusetts for more than 183 days in 2004, and possibly during the other tax years at issue.  The Commissioner based her argument in part on the appellants' responses to her interrogatories, which were served during the discovery process for these appeals.  In those responses, which were entered into evidence, the appellants acknowledged being physically present in Massachusetts for: 150 days in 2001; 166 days in 2002; 165 days in 2003; 182 days in 2004; and 169 days in 2005.  
     According to the testimony of both appellants, Mrs. Evans experienced an increase in her MS symptoms in 2004, which required additional treatment from Dr. Stein.  Mrs. Evans was therefore physically present in Massachusetts more during that year than in any of the other tax years at issue.  A letter from Dr. Stein's office was entered into the record showing that Mrs.  Evans was present in Massachusetts for a medical appointment for one additional day in March than was reflected in the appellants' answers to interrogatories, and the Board so found, bringing the total days physically present in Massachusetts in 2004 to 183.
	The Commissioner additionally asserted that telephone and credit card records entered into evidence indicated that the appellants were physically present in Massachusetts for more days than they admitted in their responses to interrogatories.  In particular, the Commissioner asserted that telephone calls made from the appellants' Massachusetts land lines and various credit card purchases from Massachusetts businesses indicated that the appellants were physically present in Massachusetts on those days.  The Board disagreed.
	There was ample, credible evidence in the record that the appellants allowed friends and family members to use their various residences, including the Nantucket home and their Boston condominiums, when they were not present, and the Board so found.  These individuals included Mr. Evans' daughters, his employee and friend Susan Hagen, and other close friends, including Tom Veronneau, who testified that he has stayed in the appellants' residence in Boston even when the appellants were not there, and that he used the telephone when doing so. Similarly, Mr. Evans testified that he occasionally allowed his daughters to use his credit card for certain purchases, such as expenses relating to their cars, and the Board found his testimony to be credible.  Contrary to the Commissioner's claims, the Board found that the credit card and telephone records in evidence did not establish that the appellants were present in Massachusetts when they claimed to be elsewhere.
  Accordingly, the Board rejected the Commissioner's arguments, and, on the basis of the testimony and documentary evidence, including credit card statements detailing hotel and flight expenditures, found that the appellants were physically present in Massachusetts for: 150 days in 2001; 166 days in 2002; 165 days in 2003; 183 days in 2004; and 169 days in 2005.  The Board therefore found that the appellants were not physically present in Massachusetts for "more than [183] days," (emphasis added), and thus they were not statutory residents of Massachusetts during any of the tax years at issue.  
IV. Neither Mr. Evans nor his Companies Carried on a Trade 	or Business in Massachusetts During the Tax Years at Issue

	In addition to claiming that the appellants were Massachusetts residents, the Commissioner also asserted that Mr. Evans' and his companies, MRX and MRXX, "carried on" a "trade or business" in Massachusetts during the tax years at issue, and thus, the Commissioner argued, his income from those companies was Massachusetts-source income pursuant to G.L. c. 62, § 5A ("§ 5A").  
In his testimony, Mr. Evans described the operation of his businesses, MRX and MRXX.  He explained that the companies were engaged in the business of owning and leasing transportation equipment, namely, railroad cars.  MRX owned the railroad cars while MRXX leased and managed the railroad cars owned by MRX and it also managed railroad cars owned by third parties.  Mr. Evans explained that they owned grain hopper cars, which were used primarily to transport corn from the Midwest to southeastern areas of the United States.  His customer base was quite small, consisting of approximately seven companies.    
As for his role within the companies, Mr. Evans testified that he was essentially the salesperson, responsible for maintaining relationships with his customers so that existing leases would be renewed.  To this end, he made business calls upon customers, often golfing or dining with them.  Mr. Evans described his business as being a very old-fashioned "handshake" kind of business, where he would commence leases based on verbal agreements with customers, often signing the relevant paperwork or leases after the fact.  Copies of numerous leases entered into by MRXX were offered into evidence in these appeals, and those leases corroborated Mr. Evans' testimony regarding the timing of his business deals in that many of them were signed months after the relevant lease commencement dates.  
Mr. Evans testified that many of his customers were located in Florida, and that his decision to move to Florida in 2001 had the unintended consequence of being a boon to his business in that it enabled him to meet more frequently with his customers.  Mr. Evans testified that he met with many of his customers in Florida, but never met with any of them in Massachusetts.  He likewise testified that he had an office in his home in Aventura, which had been specifically installed as part of the renovations of the Hampton South condo, but he did not have an office in the Nantucket home or the Boston residences.  
According to Mr. Evans, all of the remaining aspects of the businesses, including the accounting and day-to-day details, were handled by his employee, Susan Hagen.  He described her as conducting the "nuts and bolts" of the businesses. During the tax years at issue, Mrs. Hagen worked out of an office in New Hampshire.  Mr. Evans testified that he spoke with Mrs. Hagen on the telephone at times, including when he was in Boston or on Nantucket, both for business and personal reasons, as they had become close friends after nearly two decades of working together.  Mr. Evans also stated that he would check his telephone messages, including when he was in Boston or on Nantucket, but that he received relatively few voicemail messages related to his businesses.  
	On the basis of all of the evidence, the Board found that neither Mr. Evans, nor his companies MRX and MRXX, "carried on" a "trade or business" in Massachusetts during the tax years at issue.  During that period, none of the companies' customers were located in Massachusetts and none of the railroad cars owned by MRX and leased by MRXX were located in or traveled through Massachusetts.  The companies' registrations to do business in Massachusetts were withdrawn in November of 2000, and they no longer had an office in Massachusetts by the end of December of 2000.  Neither MRX nor MRXX were Massachusetts corporations; they were both incorporated in Delaware.  
Based on Mr. Evans' credible testimony regarding his business activities, the Board found that his primary duties involved maintaining existing relationships with his small group of customers to ensure that they continued to lease railroad cars from MRXX.  In order to maintain these relationships, Mr. Evans visited with his customers, often dining or playing golf with them.  The evidence showed that many of his customers were located in Florida and that many of his meetings with them took place in Florida, and it also showed that none of his customers were located in Massachusetts and that he never met with any of them in Massachusetts.  The Board therefore found that Mr. Evans' base of business operations was in Florida, where his office was located and where he most frequently engaged in his primary business duty of meeting with customers.    
The Commissioner's position that Mr. Evans, and through him, MRX and MRXX, "carried on" business in Massachusetts during the tax years at issue was based in large part on the fact that a purchase and sale agreement and several leases were signed by Mr. Evans in Massachusetts or were signed by him on dates that he admitted to being physically present in Massachusetts.  However, the Board found that the number of leases that the Commissioner claimed were executed by Mr. Evans in Massachusetts was greatly overstated because she based her claim on the lease commencement dates, many of which were dates that Mr. Evans admitted to being in Massachusetts.  However, many of the leases lacked dated signatures, and the evidence showed that many of the leases were signed well after the lease commencement dates.  Accordingly, the Board found that Mr. Evans' presence in Massachusetts on any particular lease commencement date was not evidence that he signed the lease agreement while in Massachusetts.  Moreover, many of the remaining leases contained no information about the place or date of signature of the parties, while others were signed outside of the tax years at issue, leaving in the record just a handful of documents signed by Mr. Evans in Massachusetts during the tax years at issue.  The Board could not conclude that Mr. Evans "systematically and regularly" conducted business activities in Massachusetts during the tax years at issue on the basis of a limited number of documents signed in the Commonwealth, nor could it conclude that he was "present for business" in Massachusetts in anything but a "casual, isolated, and inconsequential" way, as these activities were ancillary to his primary business duties of meeting with customers and maintaining existing business relationships.  

830 CMR 62.5A.1(4).  
Similarly, the Commissioner asserted that business telephone calls made and received by Mr. Evans while he was at his Nantucket home or his Boston residences constituted carrying on a trade or business on his part.  However, Mr. Evans testified that he checked his telephone messages occasionally, and that those were brief telephone calls, as he very infrequently received any business-related voice messages.  Although he did on occasion check in with Mrs. Hagen via telephone while in Massachusetts, the evidence showed that he spoke with her about both business and personal matters, as they were close friends as well as business associates.  In fact, the evidence indicated that Mrs. Hagen attended to several of Mr. Evans' personal matters, such as paying bills for insurance and taxes related to his personal residences and the like.  In addition, there was no evidence in the record that Mrs. Hagen, MRX and MRXX's only employee besides Mr. Evans, ever came to Massachusetts for business purposes during the tax years at issue.  Based on this evidence, the Board could not conclude that either Mr. Evans or his companies, MRX and MRXX, "systematically and regularly" conducted business in Massachusetts, or that he was "present for business" in Massachusetts during the tax years at issue. Id. Rather, the evidence showed that the activities conducted by Mr. Evans in Massachusetts, which included signing a limited number of business-related documents and making occasional telephone calls, were ancillary to his primary business duties which he conducted from a base of operations in Florida, and therefore did not rise to the level of carrying on a trade or business for purposes of § 5A.  On the basis of all of the evidence, the Board found that neither Mr. Evans, nor his companies MRX and MRXX, "carried on" a "trade or business" in Massachusetts during the tax years at issue.  Accordingly, the Board found that Mr. Evans' wages and other income from MRX and MRXX were not Massachusetts-source income.  
However, the Board found that the appellants had Massachusetts-source income in the amount of $1,730 for tax year 2001, resulting from a wagering transaction made at the Sterling Suffolk Racecourse in Massachusetts, as reflected on the appellants' 2001 Federal Income Tax Return, which was entered into evidence. 

				

Conclusion
	On the basis of all of the evidence, the Board found that the appellants established a residence in Florida with the intention to remain there indefinitely, and that Florida became the center of their domestic, social, and civil lives.  Further, the Board found that the appellants moved from Massachusetts without an intention to return for purposes other than vacation, visits, and medical care.  Thus, the Board found that the appellants met their burden of proving that they were domiciled in Florida during the tax years at issue.  
Additionally, the Board found that the appellants were not statutory residents of Massachusetts, as they were not present in Massachusetts for more than 183 days during any of the tax years at issue.  Further, the Board found that neither Mr. Evans nor his companies, MRX and MRXX, carried on a trade or business in Massachusetts during any of the tax years at issue, and thus Mr. Evans' wages and other income from MRX and MRXX were not Massachusetts-source income.  However, the Board found that the appellants had Massachusetts-source income in the amount of $1,730 from a wagering transaction made at the Sterling Suffolk Racecourse in Massachusetts in 2001.  Accordingly, the Board issued decisions for the appellants in these appeals.  
The Board issued an Order Under Rule 33 directing the parties to compute the amount to be abated for tax year 2001. Pursuant to the amount entered by the parties, the Board granted an abatement of $101,961 in tax, plus statutory additions, for tax year 2001.  The Board granted full abatements of tax in the amount of $45,310, $30,940, $44,098, and $131,115, along with statutory additions, for tax years 2002, 2003, 2004, and 2005, respectively. 

   OPINION
Under G.L. c. 62, § 2, residents of Massachusetts are taxed on all of their income, regardless of the source, with certain exceptions not relevant in these appeals. In contrast, non-residents are taxed only on income derived from Massachusetts sources. G.L. c. 62, § 5A.  According to § 1(f), a "resident" of Massachusetts is:
any natural person domiciled in the commonwealth, 
any natural person who is not domiciled in the commonwealth but who maintains a permanent place of abode 	in the commonwealth and spends in the aggregate more than one hundred eighty-three days of the taxable year in the commonwealth, including days spent partially in and partially out of the commonwealth.

The issues in these appeals were, first, whether the appellants were domiciled in Massachusetts during the tax years at issue; second, whether they were statutory residents of Massachusetts during the tax years at issue, regardless of their place of domicile; and third, if they were neither domiciled in nor residents of Massachusetts, whether they had Massachusetts-source income during the tax years at issue. The Board addressed each issue in turn below.

	The Appellants Were Not Domiciled in Massachusetts During the Tax Years at Issue

Domicile is commonly defined as "the place of actual residence with intention to remain permanently or for an indefinite time and without any certain purpose to return to a former place of abode."  Commonwealth v. Davis, 284 Mass. 41, 50 (1933).  While domicile may be a difficult concept to define precisely, the hallmark of domicile is that it is "'the place where a person dwells and which is the center of his domestic, social and civil life.'" Reiersen v. Commissioner of Revenue, 26 Mass. App. Ct. 124, 125 (1988) (quoting Restatement (Second) of Conflict of Laws § 12 (1969)).  
In the present appeals, there was no dispute that the appellants were domiciled in Massachusetts prior to 2001.  The appellants contended that they were domiciled in Florida beginning on January 2, 2001.  "It is a general rule that the burden of showing a change of domicil[e] is upon the party asserting the change."   Mellon Nat'l Bank & Trust Co. v. Comm'r of Corporations and Taxation, 327 Mass. 631, 638 (1951); Horvitz v. Commissioner of Revenue, 51 Mass. App. Ct. 386, 394 (2001).  See also Davis, 284 Mass. at 49 ("The burden of proof that his domicil[e] was changed rested on the defendant because he is the one who asserted that such change had taken place."). Thus, the burden of proof was on the appellants to prove that they had changed their domicile.  
Massachusetts follows the common law rule that a person with legal capacity is considered to have changed his or her domicile by satisfying two elements: the establishment of physical residence in a different state and the intent to remain at the new residence permanently or indefinitely.  McMahon v. McMahon, 31 Mass. App. Ct. 504, 505 (1991). See Reiersen, 26 Mass. App. Ct. at 125 ("A change of domicile occurs when a person with capacity to change his domicile is physically present in a place and intends to make that place his home for the time at least; the fact and intent must concur." (citing Hershkoff v. Board of Registered Voters of Worcester, 366 Mass. 570, 576-77 (1974)). "The determination of intent goes beyond merely accepting the taxpayer's expression of intent and instead requires an analysis of the facts closely connected to the taxpayer's major life interests, including family relations, business connections, and social activities." Mee v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2010-273, 290-91.  
In the present appeals, the Board found credible the appellants' testimony regarding their decision to move to Florida because of their desire to live in a setting optimal for Mrs. Evans' medical condition.  Further, the Board found and ruled that the appellants' actions were consistent with their stated intention to move to Florida indefinitely.  In late 2000, Mr. Evans withdrew his companies' registrations to do business in Massachusetts and registered them to do business in Florida.  Around the same time, he terminated the lease for his businesses' Massachusetts office and secured a new office in New Hampshire, where his sole employee, Susan Hagen, lived.  Also in 2000, the appellants, through Mr. Evans' companies, leased an expensive, furnished apartment in Florida, which they moved into in November of that year.  They had one of their vehicles transported to Florida.  In early 2001, the appellants both obtained Florida driver's licenses and registered to vote in Florida.  See, e.g., Williams v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2009-629, 642 (citing the taxpayers' performance of certain ministerial actions as evidence that they had changed their domicile from Massachusetts to Florida).  The Board found that these actions, taken together, demonstrated the appellants' intention to transition their lives to Florida.  
Further, the Board found and ruled that the evidence showed that the appellants developed strong social ties to Florida.  The evidence showed that the appellants had an active social life in Florida, frequently golfing, dining and socializing with individuals and couples whom they met at the three different clubs they joined: Turnberry, the JCC, and Indian Creek.  Mr. Evans also frequented the Gulfstream Racetrack in Hallandale, Florida, where he pursued his interest in horseracing and met additional friends with whom he socialized.  Mrs. Evans became part of a large, tight-knit circle of friends who met almost daily for coffee, shopping, dining and other activities, and with whom she also took day trips and vacations.  Mrs. Evans even became close enough with one couple - Martine and Eric Mann - that she was asked to participate in their son's bar mitzvah ceremony, an honor which, according to Mr. Mann, is usually reserved for family members.  The evidence also showed that the appellants, along with their friends, supported and participated in local charitable events in the community.  The Board found and ruled that the record in its totality demonstrated the appellants' strong social and civic ties to Florida. 
In addition, the Board found that the appellants' purchase of the Hampton South condo, and its subsequent extensive renovation, demonstrated their intention to make that property their permanent, primary residence, rather than a vacation property or secondary home. See Mee, Mass. ATB Findings of Fact and Reports at 2010-296 (finding that appellants demonstrated their commitment to changing their domicile to Florida through the extensive renovation and refurbishment of their Florida residence).  Moreover, the Board found and ruled that the Hampton South condo, which was situated in a luxury building where concierge services were provided, was more amenable to Mrs. Evans' physical limitations than were any of their Massachusetts residences.  See Mee, Mass. ATB Findings of Fact and Reports at 2010-287 (finding that appellants' Florida residence was more conducive to retirement living than their Massachusetts residence); see also Devens v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2012-1001, 1020.  
Although the evidence showed that the appellants retained certain ties to Massachusetts, their continuing ties to Massachusetts did not foreclose a finding of a change of domicile.  "[S]uch change does not require that a taxpayer divest himself of all remaining links to the former place of abode, or stay away from that place entirely."  Horvitz, Mass. ATB Findings of Fact and Reports at 2002-259 (citing Gordon v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1988-367, 375).  Thus, the fact that the appellants maintained residences in Massachusetts during the tax years at issue did not foreclose a finding of a change of domicile.  The evidence showed that the Nantucket home was not and never had been used by the appellants as a principal residence.  In addition, that the appellants regularly returned to their residence in Boston did not preclude a finding of a change of domicile.  See Salah v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1997-842, 856 (finding that the taxpayers, who returned to their Massachusetts residence each summer after moving to Florida, had changed their domicile to Florida based on factors which established that the center of the taxpayers' domestic, social, and civil lives had shifted to Florida).  The record in its totality indicated that the appellants' various Boston residences - the apartment at 468 Beacon Street, the Marlborough Street condo, and the Beacon Street condo - served as places for Mrs. Evans to stay while she was receiving medical treatment from her MS specialist, Dr. Stein.  The record also showed that the appellants used their Boston residence as a "way station," a place from which to launch to other places, such as Saratoga Springs and Ithaca, New York or Nantucket, where they vacationed.  The Board found the fact that the appellants did not take a residential tax exemption on any of their Massachusetts residences during any of the tax years at issue to be another indication that they did not consider any of their Massachusetts residences to be their primary home.  
Further, the Board found and ruled that Mrs. Evans' continued ties to her MS specialist in Massachusetts were not the best indication of the center of the appellants' "domestic, social, and civil li[ves]." Reiersen, 26 Mass. App. Ct. at 125; see also Arena v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2010-11, 37.  The record likewise showed that Mr. and Mrs. Evans saw medical professionals in Florida during the tax years at issue.  Although her relationship with Dr. Stein was clearly important to her, when weighed against the evidence in its totality, the Board could not conclude that Mrs. Evans' relationship with Dr. Stein was among the best indicators of the appellants' place of domicile.  
Similarly, although Mr. Evans' daughters lived in Massachusetts during some of the tax years at issue, the Board found and ruled that Mr. Evans' ties to his daughters were not dispositive.  See Reiersen, 26 Mass. App. Ct. at 130 (holding that the taxpayer had changed his domicile to the Philippines, despite the fact that the taxpayer's entire nuclear family resided in Massachusetts).   The evidence showed that Mr. Evans had lived apart from his daughters for years prior to the tax years at issue, following his divorce from his first wife.  During the tax years at issue, both of his daughters became adults and moved to Ithaca, New York to attend Cornell University.  The evidence also showed that Mr. Evans would visit his daughters at college in New York, just as they sometimes visited him in Florida.  Thus, although his ties to his daughters were clearly important to Mr. Evans, the Board found and ruled that those ties were not dispositive of the appellants' place of domicile.  See Devens, Mass. ATB Findings of Fact and Reports at 2012-1024 (finding that taxpayer's ties to his adult sons and young grandchild, with whom he did not live immediately prior to or during the tax periods in dispute, were not the most persuasive evidence of his place of domicile).  
	On the basis of all of the evidence, the Board found and ruled that the appellants met their burden of proving that they changed their domicile from Massachusetts to Florida as of the beginning of the tax years at issue, and that they remained domiciled in Florida throughout the remainder of the tax years at issue.  
	B. 	The Appellants Were Not Statutory Residents of the 	     Commonwealth during the Tax Years at Issue

Although the Board found and ruled that the appellants were not domiciled in the Commonwealth during the tax years at issue, they could still be taxed on all of their income under the second prong of § 1(f) as so-called statutory residents, that is, if they "maintain[ed] a permanent place of abode" and spent "more than [183] days" in the Commonwealth during the taxable year.  G.L. c. 62, § 1(f)(2).   There was no dispute in these appeals that the appellants maintained a permanent place of abode in the Commonwealth during the tax years at issue; in dispute between the parties was the number of days that the appellants were physically present in Massachusetts.  
On the basis of all of the evidence, the Board found and ruled that the appellants were physically present in Massachusetts for 150 days in 2001; 166 days in 2002; 165 days in 2003; and 169 days in 2005.  The Board made this finding based on the appellants' testimony and their answers to the Commissioner's interrogatories, which were entered into the record, as well as other evidence, including credit card information detailing hotel and flight expenditures.  See Arena v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports at 2010-31 (finding that appellants did not spend more than 183 days in Massachusetts during the tax years at issue based on testimony and records showing credit card expenditures).  Accordingly, the Board found and ruled that the appellants were not statutory residents of Massachusetts for any of those years.  
For 2004, the appellants acknowledged being present in Massachusetts for 182 days, and records from Mrs. Evans' doctor showed that Mrs. Evans was present for one additional day in 2004.  Based on this information and other evidence in the record, including the testimony, bank withdrawals, and credit card expenditures, the Board found and ruled that the appellants spent a total of 183 days in the Commonwealth in 2004.  
The plain language of § 1(f)(2) requires taxpayers to spend "more than [183] days" in the Commonwealth during the taxable year in order to be considered residents.  G.L. c. 62, § 1(f)(2) (emphasis added).  It is well-settled that courts are generally "constrained to follow" the plain language of a statute.  White  v. Boston, 428 Mass. 250, 253 (1998); see also Commissioner of Revenue v. Cargill, Inc., 429 Mass. 79, 82 (1999) (holding that courts are "constrained to follow" the plain language of a statute when its "language is plain and unambiguous.").  Based on the plain language of the statute, and its finding that the appellants spent 183 days in Massachusetts in 2004, the Board found and ruled that the appellants were not statutory residents of Massachusetts in 2004.  

     With the Exception of Income From a Wagering   	Transaction,  the  Appellants  Did   Not  have 	Massachusetts-Source Income During the  Tax  Years  at 	Issue.
	 
Having concluded that the appellants were not taxable as Massachusetts residents during any of the tax years at issue, the Board considered the last issue presented in these appeals, which was whether the appellants had Massachusetts-source income.  	Under § 5A, non-residents of Massachusetts are still taxable on income derived from Massachusetts sources, also known as Massachusetts-source income. As in effect for tax years 2001 and 2002, § 5A limited the taxation of nonresidents' income to "items of gross income from sources within the commonwealth."  Section 5A further provided that "[i]tems of gross income from sources within the commonwealth are items of gross income derived from or effectively connected with . . . any trade or business, including any employment carried on by the taxpayer in the commonwealth." G.L. c. 62, § 5A.  
Section 5A was amended, effective for tax years beginning on or after January 1, 2003, to expand the definition of Massachusetts-source income.  Specifically, as amended, § 5A provided that Massachusetts-source income included items of gross income effectively connected with a trade or business carried on in Massachusetts, "whether or not the nonresident is actively engaged in a trade or business or employment in the commonwealth in the year in which the income is received."  G.L. c. 62, § 5A.   Section 5A, as amended, further specified that "gross income derived from or effectively connected with any trade or business" shall include:
gain from the sale of a business or of an interest in a business, distributive share income, separation, sick or vacation pay, deferred compensation and nonqualified pension income not prevented from state taxation by the laws of the United States and income from a covenant not to compete. Id. 

Likewise, the Commissioner's regulation pertaining to § 5A was amended during the tax years at issue. Prior to 2002, 830 CMR 62. 5A. 1(4)(a), stated that a non-resident carries on a trade or business in Massachusetts if: 
the non-resident, directly or through agents or employees, maintains or operates or shares in maintaining or operating a desk, a room, an office,    a shop, a store, a warehouse, a factory, or any other place in Massachusetts where the business affairs are systematically and regularly conducted; or 

If the non-resident, directly or through agents or employees, is present for business in Massachusetts either as an employee, sole proprietor, or other self-employed individual.


830 CMR 62. 5A. 1(4)(a) (1997).  That regulation also stated that a taxpayer will not be considered to be carrying on a trade or business in Massachusetts if his "presence for business is casual, isolated and inconsequential," and it set forth three tests for establishing such a presence: the non-resident's presence for business in Massachusetts did not exceed ten days; or the non-resident's gross income from presence for business in Massachusetts did not exceed $6,000; or the non-resident's presence for business in Massachusetts was ancillary to the non-resident's primary business duties performed at a base of operations outside of Massachusetts.  830 CMR 62. 5A. 1(4)(b) (1997).  
As amended for tax years beginning in 2002, these three tests were removed from the regulation, and it thereafter simply stated, in relevant part, that presence for business would be considered casual, isolated and inconsequential if it was "ancillary to the non-resident's primary business or employment duties as performed at a base of operations outside of Massachusetts[.]"  830 CMR 62. 5A. 1(4)(b) (2002).  
It was the Commissioner's position that all of the appellants' income was Massachusetts-source income because Mr. Evans, and through him, his companies MRX and MRXX, "carried on" a "trade or business" in Massachusetts during the tax years at issue.  However, the Board found and ruled that neither Mr. Evans, nor his companies MRX and MRXX, "carried on" a "trade or business" in Massachusetts during the tax years at issue, under either version of § 5A or the regulations pertaining thereto.  The evidence showed that Susan Hagen, the only employee of MRX and MRXX besides Mr. Evans, carried out the day-to-day work of MRX and MRXX, and that she did so out of an office in New Hampshire.  There was no evidence in the record that she conducted or was present for business in Massachusetts during the tax years at issue.  Further, the evidence simply did not support the finding that Mr. Evans "systematically and regularly conducted" business in Massachusetts during the tax years at issue, nor did the evidence suggest that Mr. Evans was present for business in Massachusetts.  Rather, the evidence showed that the activities conducted by Mr. Evans, including signing a limited number of business-related documents and making occasional telephone calls, were ancillary to his primary business duties of meeting with clients, which he conducted from a base of operations in Florida, and constituted exactly the "casual, isolated and inconsequential" presence that did not rise to the level of "carr[ying] on" a "trade or business" for purposes of § 5A. 
Based on the evidence of record, the Board could not conclude that Mr. Evans or MRX or MRXX carried on a trade or business in Massachusetts during the tax years at issue, and it therefore rejected the Commissioner's argument that all of the appellants' income from MRX and MRXX was Massachusetts-source income.  However, the Board found and ruled that, for tax year 2001, the appellants did have Massachusetts-source income in the amount of $1,730, resulting from a wagering transaction made at the Sterling Suffolk Racecourse in Massachusetts, as reflected on their 2001 Federal Income Tax Return.    



Conclusion
	On the basis of all of the evidence presented in these appeals, the Board found and ruled that the appellants met their burden of proving that they changed their domicile to Florida, and thus were not domiciled in Massachusetts during any of the years at issue.  Further, the Board found and ruled that the appellants were not statutory residents of Massachusetts, because they were not physically present in Massachusetts for more than 183 days during any of the tax years at issue.  Lastly, the Board found and ruled that neither Mr. Evans, nor MRX or MRXX, carried on a trade or business in Massachusetts during the tax years at issue, and accordingly, his income from those businesses was not Massachusetts-source income.  However, the Board found and ruled that the appellants had Massachusetts-source income in the amount of $1,730 for tax year 2001, resulting from a wagering transaction made in Massachusetts.  


Accordingly, the Board issued decisions for the appellants in these appeals.  Pursuant to the amount entered by the parties following the Board's Order Under Rule 33, the Board granted an abatement of $101,961 in tax, plus statutory additions, for tax year 2001.  The Board granted full abatements of tax in the amount of $45,310, $30,940, $44,098, and $131,115, along with statutory additions, for tax years 2002, 2003, 2004, and 2005, respectively. 
 
						THE APPELLATE TAX BOARD

				 	By:					___________		 		              Thomas W. Hammond, Jr., Chairman


A true copy,

Attest:			______		
	      Clerk of the Board

 Mr. Evans' mother passed away in 1998.  
 Mr. Evans testified that one such episode resulted in Mrs. Evans breaking her leg, while other episodes resulted in facial lacerations and other serious injuries.  
  Both Boston and Nantucket allow the residential exemption permitted by G.L. c. 59, § 5C which "shall be applied only to the principal residence of a taxpayer." 
 For instance, the evidence showed that Mrs. Hagen and her husband attended Mr. and Mrs. Evans' wedding in California in 1999, and that Mr. Evans attended a 50th birthday party for Mrs. Hagen's husband.  The evidence further showed that Mrs. Hagen and her family visited Mr. and Mrs. Evans in Florida during the tax years at issue, and also used the appellants' Nantucket home even when the appellants were not present.  

 Mr. Evans' testimony provided additional evidence of just how ancillary the signature of the lease agreements was to the operation of his businesses.  He indicated that he commenced and continued to lease railroad cars based upon verbal agreements, regardless of when the actual lease agreements were signed, and his testimony was corroborated by the fact that many of the leases were signed well after the stated lease commencement dates.  

ATB 2013-9