Jeffrey E. Horvitz v. Commissioner of Revenue (May 2, 2002)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


JEFFREY E. HORVITZ          v.     COMMISSIONER OF REVENUE

Docket No. F231494				Promulgated:
							May 2, 2002


	These revised Findings of Fact and Report are promulgated simultaneously with the Board's reinstated decision on remand pursuant to G.L. c. 58A, §13 and 831 CMR 1.32. These appeals were originally filed under the formal procedure pursuant to G.L. c. 58A, §6 and G.L. c. 62C, §39, from the refusal of the appellee Commissioner of Revenue ("Commissioner") to abate personal income taxes for 1991 and 1992. 
Commissioner Gorton heard this appeal and was joined in the original decision for the appellee by Chairman Burns, former Chairman Gurge, Commissioner Scharaffa, and former Commissioner Lomans.  The appellant Jeffrey Horvitz appealed the original decision to the Appeals Court, which vacated the Board's decision and remanded the appeal "for further consideration in accordance with this opinion."   Horvitz v. Commissioner of Revenue, 51 Mass. App. Ct. 386, 397 (2001).  
Commissioner Gorton was joined in the reinstated decision on remand for the appellee by Chairman Burns and Commissioners Scharaffa and Egan. 

	Kenneth W. Salinger, Esq. For the appellant
	Kevin M. Daly, Esq. For the appellee

FINDINGS OF FACT
	This case turns on the domicile of the appellant Jeffrey Horvitz for the period September, 1991 through December, 1992, whether it remained in Florida as he maintains, or shifted to Massachusetts as the Commissioner contends. The Appeals Court, in reversing and remanding the Board's decision for the appellee, nevertheless held that "[f]or the most part the board's subsidiary findings. . .    do not appear to be genuinely disputed". 51 Mass. App. Ct. at 387. The remand was ordered to give the Board an opportunity to revisit its findings and decision in light of the Appeals Court's conclusion that the burden of proof lay with the Commissioner to establish change of domicile, and not with the appellant to establish continuity of domicile. 51 Mass. App. Ct. at 394-95.
	The Appeals Court augmented the Board's findings at 25 Mass. App. Tax Bd. Rep. 382, 382-89 (1999) with additional factual detail drawn from the record. Yet, there is no indication that the Board's subsidiary findings of fact were unsupported by substantial evidence. Indeed, the Appeals Court observed that "reasonable fact finders could draw (i.e., there was substantial evidence supporting) either of opposite inferences [as to appellant's domicile] from this record." 51 Mass. App. Ct. at 396. 
Given the apparent soundness of the underlying fact finding in this matter, as supplemented by the Appeals Court's narrative, the Board concludes that there is no need for a new trial. Rather, the Board adopts the factual detail set forth at 51 Mass. App. Ct. at 387-91 and, in addition, reinstates the Board's original findings of fact at 25 Mass. App. Tax Bd. Rep. at 382-389. 
	For the reasons elaborated in the Opinion below, the Board adheres to the conclusion that appellant changed his domicile from Florida to Massachusetts in September 1991, notwithstanding the reallocation of the burden of proof by the decision of the Appeals Court. From the totality of the evidence the Board found that appellant was physically present in the Commonwealth as of September 1991, with an intent to remain for an indefinite period. The disputed assessment of Massachusetts resident personal income taxes was accordingly correct. The decision for the appellee is therefore reinstated.

OPINION
	The question of appellant's domicile from September, 1991 through December, 1992, on remand from the Appeals Court, must be reevaluated in light of the holding that the burden of proof, i.e. the burden of production and persuasion, rests with the Commissioner, not the appellant. 51 Mass. App. Ct. at 391. The Court held that the party asserting a change of domicile, here the Commissioner, must shoulder the burdens of production and persuasion. 51 Mass. App. Ct. at 394.
We conclude that the outcome of this case is not altered by the reallocation of the burden of proof. As has been held, "[b]urdens of proof are meaningful elements of legal analysis, and occasionally, where the evidentiary record is wanting, the burden of proof will determine the outcome of [an action]".  Simon v. Ward, 80 F.Supp.2d 464, 472 (E.D. Penn. 2000).  The instant case is not characterized by paucity of evidence, however. Both parties introduced extensive testimonial and documentary evidence at the 5-day trial of this matter. Both parties devoted considerable argument and copious briefing to persuading the Board to adopt competing views of the evidence. In sum, the instant case is not one destined to be decided by default, based on the failure of the party bearing the burden of proof to offer evidence or persuade as to critical elements of the action. 
The Board notes the observations of the Appeals Court as to "the difficulty of deriving this taxpayer's intent from the particular evidence. . . ." 51 Mass. App. Ct. at 396. "Because of Horvitz's considerable financial resources, he was able to create two locations in each of which he carried on important parts of his life. Were the law to countenance it, he virtually created two domiciles." Id.
However, the availability of evidence to support competing inferences as to domicile does not doom the parties to a "tied" outcome, such that the burden of proof "breaks the tie" and determines the winner. Rather, the Board must weigh the evidence pointing to competing outcomes, and rest its decision on the preponderance of the evidence. As the Supreme Judicial Court has explained, "'[n]o exact definition can be given of domicile; it depends upon no one fact or combination of circumstances, but from the whole taken together it must be determined in each particular case. . .; and it may often occur, that the evidence of facts tending to establish the domicile in one place, would be entirely conclusive, were it not for the existence of facts and circumstances of a still more conclusive and decisive character, which fix it, beyond question, in another.'" Tax Collector of Lowell v. Hanchett, 240 Mass. 557, 561 (1922)(cite omitted). The weight to be assigned to particular factors and combinations of factors, together with the credibility of the testimonial evidence, are committed to the fact finder's resolution. Id. ("The weight to be given to the declarations of the defendant, his acts and general conduct, as bearing upon, and tending to show [change of domicile] were for the judge.") See also Commonwealth v. Davis, 284 Mass. 41, 51 (1933)("It is familiar law that a jury is not obliged to believe uncontradicted testimony if on the whole they find it not credible from the appearance of the witness, from his interest in the controversy or from other circumstances. . . .  The credibility of witnesses is ordinarily entirely for the fact finding tribunal.") 
Recently reaffirming the Board's fact-finding discretion, the Supreme Judicial Court held that:
The board's decision is final as to findings of fact.  G.L. c. 58A, §13.  See Commissioner of Corps. & Taxation v. J.G. McCrory Co., 280 Mass. 273, 278 (1932).  This means that the board's "findings have the same force and effect as the verdict of a jury or the findings of a judge sitting without a jury in an action at law or the finding of a judge or master in equity upon unreported evidence."  Id.  Accordingly, our review of the board's factual findings is limited to whether, as a matter of law, the evidence is sufficient to support them.  Olympia & York State St. Co. v. Assessors of Boston, 428 Mass. 236, 240 (1998).  "Our review of the sufficiency of the evidence is limited to 'whether a contrary conclusion is not merely a possible but a necessary inference from the findings." Id., quoting Kennametal, Inc. v. Commissioner of Revenue, 426 Mass. 39, 43 (1997), cert. denied, 523 U.S. 1059 (1998).  If supported by sufficient evidence, we will not reverse a decision of the board unless it is based on an incorrect application of the law.  See Koch v. Commissioner of Revenue, [416 Mass.] at 555.

Syms Corp. v. Commissioner of Revenue, 436 Mass. 505, 511 (2002).  Accord Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977)("' The credibility of witnesses, the weight of the evidence, and inferences to be drawn from the evidence are matters for the board.'")(Cite omitted.) 
Guided by these controlling authorities and the Appeals Court's opinion, the Board has taken a fresh look at the instant question of domicile. The touchstone of domicile 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) (Cite omitted.) Notwithstanding the presence of considerable evidence on both sides of the domicile ledger, certain ties are particularly probative here and entitled to greater weight in the view of the Board. Family ties to a putative domicile are often quite significant. See Shea v. Commissioner of Revenue, 20 Mass. App. Tax. Bd. Rep. 206, 215-16 (1997), aff'd, 44 Mass. App. Ct. 1116 (1998); Belmonte v. Commissioner of Revenue, 10 Mass. App. Tax Bd. Rep. 86, 88 (1988). See also Hopkins v. Comm'r of Corporations and Taxation, 320 Mass. 168, 172 (1946). See generally Mellon Nat'l Bank & Trust Co. v. Comm'r of Corporations and Taxation, 327 Mass. 631, 638 (1951).  Moreover, appellant's continuing ties to Florida do not foreclose a finding of change of domicile: such 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. See Gordon v. Commissioner of Revenue, 10 Mass. App. Tax Bd. Rep. 152, 155-56 (1988).
As the Board stressed in the original opinion, and emphasizes now in its reinstated decision, "appellant's daughters were continuously present in Massachusetts as of September, 1991. The ties that bound him to his daughters appeared, from all the evidence, to exert the strongest pull of any single factor on appellant's home life. His desire to spend as much time as possible with his daughters, and to obtain the best possible care for Caroline, were abundantly clear from the evidence and probative of Massachusetts domicile." 25 Mass. App. Tax Bd. Rep. at 392-92. This conclusion is within the province of the Board to reach, (see Davis, 284 Mass. at 51; Horvitz, 51 Mass. App. Ct. at 396) and is not affected by the reallocation of the burden of proof.
Based on the totality of the evidence, the Board finds appellant's family and other ties to Massachusetts as of September, 1991 more probative of domicile than his social connections to Florida. His professions of intent to maintain a Florida domicile in his trial testimony were undermined by contrary and more plausible expressions of intent contemporaneous with the events in litigation. See Davis, 284 Mass. at 51. See also Commonwealth v. Bogigian, 265 Mass. 531, 538-39 (1929). The Board found that appellant was physically present in the Commonwealth as of September, 1991 and intended to remain here for an indefinite period. The Commissioner has accordingly met his burden of proof, and the Board reinstates its decision for the appellee, upholding the disputed assessment.
These Findings of Fact and Report are issued simultaneously with the Board's reinstated decision for the appellee.

                   APPELLATE TAX BOARD

By:____________________________
    Abigail A. Burns, Chairman 
                  


A true copy,
Attest:________________________
          Clerk of the Board	

 The thoroughness of the record, after a trial of 5 days, obviates any need for a rehearing of this matter. See 51 Mass. App. Ct. at 397. The evidence is sufficiently developed to permit a decision on the current state of the record.
 The Appeals Court opined "reasonable fact finders could draw (i.e., there was substantial evidence supporting) either of opposite inferences from the record." 51 Mass. App. Ct. at 396.

ATB 2002-261