Snowbirds establishing FL residency from Northeast- Residency audits

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
User avatar
illumination
Posts: 3173
Joined: Tue Apr 02, 2019 6:13 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by illumination »

bsteiner wrote: Sun Apr 18, 2021 1:39 pm
illumination wrote: Sun Apr 18, 2021 12:50 pm The way our legal system is "supposed" to work, the burden of proof should be on the state and not the other way around.
The taxpayer has the burden of proof in tax cases. The taxpayer has or can get the information.

You'll have to show me in the Constitution this "asterisk" when it comes to taxes.

With the The Internal Revenue Service Restructuring and Reform Act of 1998, the burden of proof shifted to the government. This is the federal IRS and not the state tax authority, but I would argue this basic right should be across the board with states as well with the 6th Amendment.
User avatar
Toons
Posts: 14467
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by Toons »

truenorth418 wrote: Fri Apr 16, 2021 10:50 am The easy answer is don’t play games, don’t cheat.

When I moved to Florida from NYC in 2018. I sold my property in NYC, moved all of my possessions to Florida, got a Florida drivers license, registered to vote in Florida, changed all of my accounts to my new Florida address, and by the way I haven’t been back to NY since.

If you want to establish Florida residency, move to Florida. Otherwise, stay in Massachusetts and enjoy the benefits and responsibilities of that.
Perfect :wink:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
bsteiner
Posts: 9210
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by bsteiner »

illumination wrote: Sun Apr 18, 2021 4:36 pm
bsteiner wrote: Sun Apr 18, 2021 1:39 pm
illumination wrote: Sun Apr 18, 2021 12:50 pm The way our legal system is "supposed" to work, the burden of proof should be on the state and not the other way around.
The taxpayer has the burden of proof in tax cases. The taxpayer has or can get the information.

You'll have to show me in the Constitution this "asterisk" when it comes to taxes.

With the The Internal Revenue Service Restructuring and Reform Act of 1998, the burden of proof shifted to the government. This is the federal IRS and not the state tax authority, but I would argue this basic right should be across the board with states as well with the 6th Amendment.
Under Section 7491, to shift the burden of proof to the government, the taxpayer has to produce credible evidence: https://www.law.cornell.edu/uscode/text ... ch%20issue.
User avatar
illumination
Posts: 3173
Joined: Tue Apr 02, 2019 6:13 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by illumination »

bsteiner wrote: Sun Apr 18, 2021 4:51 pm
illumination wrote: Sun Apr 18, 2021 4:36 pm
bsteiner wrote: Sun Apr 18, 2021 1:39 pm
illumination wrote: Sun Apr 18, 2021 12:50 pm The way our legal system is "supposed" to work, the burden of proof should be on the state and not the other way around.
The taxpayer has the burden of proof in tax cases. The taxpayer has or can get the information.

You'll have to show me in the Constitution this "asterisk" when it comes to taxes.

With the The Internal Revenue Service Restructuring and Reform Act of 1998, the burden of proof shifted to the government. This is the federal IRS and not the state tax authority, but I would argue this basic right should be across the board with states as well with the 6th Amendment.
Under Section 7491, to shift the burden of proof to the government, the taxpayer has to produce credible evidence: https://www.law.cornell.edu/uscode/text ... ch%20issue.
It's at least a step in the right direction, I would argue the states should have similar limits.
bluebolt
Posts: 2137
Joined: Sat Jan 14, 2017 8:01 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by bluebolt »

beyou wrote: Sun Apr 18, 2021 1:05 pm
bluebolt wrote: Sun Apr 18, 2021 12:55 pm
beyou wrote: Sun Apr 18, 2021 8:34 am Why shouldn’t you pay taxes to MA if you own a home and spend half your year there ? The government still need to provide services to you whether you are there every night or not. How about you agree no police protection while you are away, your burglar alarm goes off and police note “he’s in Florida now so don’t bother responding”. You benefit from services you should pay for them.
They would be paying property tax in MA, which is typically how local police/fire/first aid services are funded.
This is not universally true. NYC for example charged income tax AND property tax, which funds many services including the police. And the police was an example, are you implying state income tax provides you no services at all ? We have roads maintained by local town, county, state and feds. We have local county and state police.
I didn't claim it was universally true, though you seemed to be claiming that the OP would be paying no taxes to support services in MA. I was pointing out that was not the case.

And while it may work differently in NYC with income and property taxes, it doesn't work that way in MA.

The city of Boston gets about 13% of its budget from the state and 73% from property taxes.
https://www.boston.gov/departments/budg ... ing-budget

Cambridge gets about 8% of its budget from the state and 71% from property taxes.
https://www.cambridgema.gov/-/media/Fil ... budget.pdf
MarkNYC
Posts: 2999
Joined: Mon May 05, 2008 7:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by MarkNYC »

illumination wrote: Sun Apr 18, 2021 4:36 pm
bsteiner wrote: Sun Apr 18, 2021 1:39 pm
illumination wrote: Sun Apr 18, 2021 12:50 pm The way our legal system is "supposed" to work, the burden of proof should be on the state and not the other way around.
The taxpayer has the burden of proof in tax cases. The taxpayer has or can get the information.

You'll have to show me in the Constitution this "asterisk" when it comes to taxes.

With the The Internal Revenue Service Restructuring and Reform Act of 1998, the burden of proof shifted to the government. This is the federal IRS and not the state tax authority, but I would argue this basic right should be across the board with states as well with the 6th Amendment.
I don't think you'll find the phrases "presumption of innocence" or "innocent until proven guilty" in the Constitution either. The 5th and 14th amendments refer to "due process", which is a somewhat vague term, generally referring to a fair application of the laws. The courts have held that in a criminal proceeding, the prosecution must prove guilt beyond a reasonable doubt, but very few tax cases are criminal cases.

The Restructuring and Reform Act of 1998 did shift the burden of proof in tax cases to the federal government, but with these limitations: only in court cases on civil matters, and only if the taxpayer complies with the substantiation and recordkeeping requirements of the Code and the regulations. So if a taxpayer fails to keep adequate records, then the taxpayer will continue to bear the burden of proof if the issue ends up in court, and the taxpayer will then suffer the same consequences of inadequate recordkeeping that existed under prior law. Thus, as a practical matter, the burden of proof will often remain remain with the taxpayer, except in criminal cases.
MarkNYC
Posts: 2999
Joined: Mon May 05, 2008 7:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by MarkNYC »

JackoC wrote: Sat Apr 17, 2021 1:17 pm
I think if we ever do this, as retirees with no business in NJ and high income in normal terms but not remotely Tepper terms, we might sell our NJ home (only home now) to make things simpler, and perhaps also take up <184 day 'non-residence' in NY (either the City a mile away from where we live now, or maybe upstate near a grown kid), since it would be NY's burden to show we'd *become* residents there, as opposed to ours to show we were no longer NJ residents.
If your primary home (domicile) is NJ or FL, and you maintain a residence in NY, then if you spend more than 182 days in NY during the year NY can declare you a statutory resident (183 day rule) and tax you as a resident even though you are domiciled in another state. In this situation, if you receive a residency audit inquiry from NY, the burden will be on you to prove you were not in NY for 183 days during the year. The chances of such an audit are less likely for a retiree than for someone still working, but if it happens, it would be wrong to assume the burden of proof is on NY - it is not.

If domiciled outside NY and you do not maintain a residence in NY, then the statutory residence (183 day) issue does not apply.
SemperFi79
Posts: 93
Joined: Fri Oct 05, 2018 2:42 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by SemperFi79 »

Great question OP! My question was similar, so you beat me to the punch! My question was about the “particulars” for having two homes and what things to consider for residency/domicile. Which I think was at the core of your question before payment to taxes became part of the conversation. In our case, we want to summer in Montana or Idaho, and winter in AZ or FL. (We are looking to move out of Oregon and buy land in a summer state and winter state and custom build) I was going to ask how do people with more than one home handle that establishment? And obviously taxes will come up. There was a comment/question made with regard to “what if time is spent out of country”? My friend resides part-time in Germany and part-time in New Jersey and does her Germany taxes first to then give to her CPA in NJ. Since we are fully retired, we also would like to spend 2-4 months overseas (or more) and part-time in MT/ID and part-time in AZ or FL. I know there are people doing it, but the particulars are cloudy considering the 183/4 rule pops up. What if you spend more time overseas, than at your two other residents in the states, but then spend all your time one year in one state? I can’t believe it’s become that complex, since people are more mobile and seem to have more than one residence they live in. So how do you do that? Thanks OP for bringing this topic to the forum.
tibbitts
Posts: 23728
Joined: Tue Feb 27, 2007 5:50 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by tibbitts »

SemperFi79 wrote: Sun Apr 18, 2021 8:28 pm Great question OP! My question was similar, so you beat me to the punch! My question was about the “particulars” for having two homes and what things to consider for residency/domicile. Which I think was at the core of your question before payment to taxes became part of the conversation. In our case, we want to summer in Montana or Idaho, and winter in AZ or FL. (We are looking to move out of Oregon and buy land in a summer state and winter state and custom build) I was going to ask how do people with more than one home handle that establishment? And obviously taxes will come up. There was a comment/question made with regard to “what if time is spent out of country”? My friend resides part-time in Germany and part-time in New Jersey and does her Germany taxes first to then give to her CPA in NJ. Since we are fully retired, we also would like to spend 2-4 months overseas (or more) and part-time in MT/ID and part-time in AZ or FL. I know there are people doing it, but the particulars are cloudy considering the 183/4 rule pops up. What if you spend more time overseas, than at your two other residents in the states, but then spend all your time one year in one state? I can’t believe it’s become that complex, since people are more mobile and seem to have more than one residence they live in. So how do you do that? Thanks OP for bringing this topic to the forum.
I don't know that "people" are more likely to have residences in multiple states or countries. Bogleheads might.

But my understanding is that generally the 18x day thing is a one-time threshold and once you cross it and establish residence, it more or less requires doing the same thing to change residency again. The problem comes when for example you go back to your previous state immediately after declaring domicile elsewhere but not even spend more than half the first year at your new "home", which frankly a high percentage of people who retain their residences seem to do.
NS_Bane
Posts: 117
Joined: Sat Mar 17, 2018 12:27 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by NS_Bane »

protagonist wrote: Fri Apr 16, 2021 2:26 pm
bsteiner wrote: Fri Apr 16, 2021 2:08 pm
protagonist wrote: Fri Apr 16, 2021 1:41 pm
bsteiner wrote: Fri Apr 16, 2021 11:04 am

The more difficult issue is often domicile, which turns on all of the facts and circumstances. Changing your driver's license and voter registration isn't sufficient. You have to actually make Florida your new home.

I understand that. But in my case (as well as many others), I don't necessarily want to have one primary residence. It seems reasonable to me that a person who lives roughly half the time in two states should be able to choose which to call his "primary", and I get the 183 day rule, driver's license, voting, domicile, etc....but to have to keep careful records of where you are every day during the year, where you have more family photos, where you shop for something, or to have to give up the primary doc who has been seeing you for decades to prove that you no longer live somewhere seems to me insane. Yet that is what I am reading on multiple sites. Especially if you do still live there "almost" half the time.

I don't mean to be arguing the validity of state law here....that would be pointless. But I do wonder if what I am reading, that seems so excessive to me, is something that only generally applies to those with huge state tax bills (which I understand would raise the eyebrows of the state revenue department), or whether they would audit and require that much proof from an "ordinary guy like me". I am completely retired, own my MA home outright, and other than getting Medicare in MA currently (which is slightly different than many other states) I can't think of any specific "benefits" the state is giving me. I have no intention of trying to game the system, but I want to understand it. If I decide down the line I want to be an official FL resident, that would be where I would choose to spend at least half of my time...but I would still like the option of, for example, seeing MA doctors, maintaining my MA home where I have a lot of roots, and spending a significant amount of time there.

In fact, I am all over the place already. Winters in FL, a month in the summer in France playing music, 4 days every two weeks at my fiancee's place in NYC, back and forth to visit my daughter in Maine, etc. I doubt if I spend 183 days/year anywhere as is!
Each case turns on its own facts. Try to make the facts as good as you can in case you're audited.


Where is your dog? No dog.

Where are your artworks? I would anticipate both places. I like art. The place in MA has more walls so it would prob have more art.

Which home is the nicer one? That's subjective but the one in MA is worth more. Like I said, if I got to the point where I wanted to declare FL my primary I would still envision myself living in both places almost equally.

When you come home from your trips to France, NYC and Maine, where do you come home to? France, to MA since I go there in the summer. NYC, randomly but it is certainly an easier trip from MA (fiancee will spend a lot of time in FL as well). ME prob. from MA since it is a short drive.

Where do you go to church, synagogue or mosque? I don't.

Where are you involved in community organizations? Presumably both at that point.

Where do you get together with your family for holidays? NY metro area.

See the New York nonresident audit guidelines shown above. Massachusetts isn't bound by them but the concepts should be similar.
I think they are.

My point here is that I would not (in my mind) have one clear primary residence....I would have to choose one for practical purposes (voting, driving, taxation). Of course, given the option, I would choose FL because of the tax and estate advantage, but not out of dishonesty.
Based on these facts, your domicile would be in MA.
JackoC
Posts: 4714
Joined: Sun Aug 12, 2018 11:14 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by JackoC »

MarkNYC wrote: Sun Apr 18, 2021 7:36 pm
JackoC wrote: Sat Apr 17, 2021 1:17 pm I think if we ever do this, as retirees with no business in NJ and high income in normal terms but not remotely Tepper terms, we might sell our NJ home (only home now) to make things simpler, and perhaps also take up <184 day 'non-residence' in NY (either the City a mile away from where we live now, or maybe upstate near a grown kid), since it would be NY's burden to show we'd *become* residents there, as opposed to ours to show we were no longer NJ residents.
If your primary home (domicile) is NJ or FL, and you maintain a residence in NY, then if you spend more than 182 days in NY during the year NY can declare you a statutory resident (183 day rule) and tax you as a resident even though you are domiciled in another state. In this situation, if you receive a residency audit inquiry from NY, the burden will be on you to prove you were not in NY for 183 days during the year. The chances of such an audit are less likely for a retiree than for someone still working, but if it happens, it would be wrong to assume the burden of proof is on NY - it is not.
From my post you quoted it's clear I'm aware I'd have to limit the days per year in NY to avoid being proved a resident. But if the dispute is between <184 and <183, it's what I said. See "Nonresident Audit Guidelines-State of New York - Department of Taxation and Finance" (linked earlier by poster bsteiner).
"A statutory resident is an individual who is not domiciled in this state but maintains a permanent place of abode in New York State and spends in the aggregate more than one hundred and eighty-three days of the taxable year in this state..."

On burden of proof I was also taking it directly from the same source:

"The burden of proving a change of domicile is upon the party asserting the change. ... Thus, a taxpayer who has been historically domiciled in New York State who is claiming to have changed his domicile must be able to support his intentions with unequivocal acts. In some instances, this is a very easy burden to support, while in others it is, in varying degrees, more difficult. Similarly, the Department bears the burden of proof to show that an individual who was previously a non-domiciliary of New York changed his domicile to New York"
https://www.tax.ny.gov/pdf/2014/misc/no ... s_2014.pdf

In the much more commonly focused on cases, at least in media, where a heretofore NY resident wants to claim their residency has shifted to eg. FL, despite maintaining a part time residence in NY, it's their burden to prove the residency change is real. Which in fairness is also OP's case wrt MA. However I think I was clear I was talking about my own potential situation, now NJ resident: if I moved to FL but then also took up part time residence in NY, it would be NY's burden to prove I'd become a NY resident, and easy to avoid them being able to by observing the time limit.
criticalmass
Posts: 2843
Joined: Wed Feb 12, 2014 9:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by criticalmass »

Jack FFR1846 wrote: Fri Apr 16, 2021 2:47 pm Massachusetts has a 5 year look back if you pass. So thinking you can leave more than $1M in your estate and no tax being due, forget it. Unless, of course, you move to Florida, break all Mass ties and don't die for 5 years.

(my mom has snowbirded between Mass and Florida for a decade but is now permanently in Mass and taxes will be due on her > $1M estate for Ma.)
I am not sure if that is true, as the rule does not appear to have changed substantially much since 1995.

This is a well known precedent that you may live full time
in Massachusetts until passing and have your will probated in Florida, avoiding Massachusetts taxes.

https://www.google.com/amp/s/www.sun-se ... y,amp.html
Or
https://www.sun-sentinel.com/news/fl-xp ... story.html
criticalmass
Posts: 2843
Joined: Wed Feb 12, 2014 9:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by criticalmass »

NS_Bane wrote: Sun Apr 18, 2021 10:17 pm
protagonist wrote: Fri Apr 16, 2021 2:26 pm
bsteiner wrote: Fri Apr 16, 2021 2:08 pm
protagonist wrote: Fri Apr 16, 2021 1:41 pm
bsteiner wrote: Fri Apr 16, 2021 11:04 am

The more difficult issue is often domicile, which turns on all of the facts and circumstances. Changing your driver's license and voter registration isn't sufficient. You have to actually make Florida your new home.

I understand that. But in my case (as well as many others), I don't necessarily want to have one primary residence. It seems reasonable to me that a person who lives roughly half the time in two states should be able to choose which to call his "primary", and I get the 183 day rule, driver's license, voting, domicile, etc....but to have to keep careful records of where you are every day during the year, where you have more family photos, where you shop for something, or to have to give up the primary doc who has been seeing you for decades to prove that you no longer live somewhere seems to me insane. Yet that is what I am reading on multiple sites. Especially if you do still live there "almost" half the time.

I don't mean to be arguing the validity of state law here....that would be pointless. But I do wonder if what I am reading, that seems so excessive to me, is something that only generally applies to those with huge state tax bills (which I understand would raise the eyebrows of the state revenue department), or whether they would audit and require that much proof from an "ordinary guy like me". I am completely retired, own my MA home outright, and other than getting Medicare in MA currently (which is slightly different than many other states) I can't think of any specific "benefits" the state is giving me. I have no intention of trying to game the system, but I want to understand it. If I decide down the line I want to be an official FL resident, that would be where I would choose to spend at least half of my time...but I would still like the option of, for example, seeing MA doctors, maintaining my MA home where I have a lot of roots, and spending a significant amount of time there.

In fact, I am all over the place already. Winters in FL, a month in the summer in France playing music, 4 days every two weeks at my fiancee's place in NYC, back and forth to visit my daughter in Maine, etc. I doubt if I spend 183 days/year anywhere as is!
Each case turns on its own facts. Try to make the facts as good as you can in case you're audited.


Where is your dog? No dog.

Where are your artworks? I would anticipate both places. I like art. The place in MA has more walls so it would prob have more art.

Which home is the nicer one? That's subjective but the one in MA is worth more. Like I said, if I got to the point where I wanted to declare FL my primary I would still envision myself living in both places almost equally.

When you come home from your trips to France, NYC and Maine, where do you come home to? France, to MA since I go there in the summer. NYC, randomly but it is certainly an easier trip from MA (fiancee will spend a lot of time in FL as well). ME prob. from MA since it is a short drive.

Where do you go to church, synagogue or mosque? I don't.

Where are you involved in community organizations? Presumably both at that point.

Where do you get together with your family for holidays? NY metro area.

See the New York nonresident audit guidelines shown above. Massachusetts isn't bound by them but the concepts should be similar.
I think they are.

My point here is that I would not (in my mind) have one clear primary residence....I would have to choose one for practical purposes (voting, driving, taxation). Of course, given the option, I would choose FL because of the tax and estate advantage, but not out of dishonesty.
Based on these facts, your domicile would be in MA.
What facts above are you using (no dog? vacationing lb France?, size of summer home?), and which Massachusetts Gerneral Laws are you relying on to make this claim?
User avatar
beyou
Posts: 6915
Joined: Sat Feb 27, 2010 2:57 pm
Location: If you can make it there

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by beyou »

Toons wrote: Sun Apr 18, 2021 4:38 pm
truenorth418 wrote: Fri Apr 16, 2021 10:50 am The easy answer is don’t play games, don’t cheat.

When I moved to Florida from NYC in 2018. I sold my property in NYC, moved all of my possessions to Florida, got a Florida drivers license, registered to vote in Florida, changed all of my accounts to my new Florida address, and by the way I haven’t been back to NY since.

If you want to establish Florida residency, move to Florida. Otherwise, stay in Massachusetts and enjoy the benefits and responsibilities of that.
Perfect :wink:
+1

I plan to happily pay whatever I am legally obligated to pay in my high tax state. They do provide services I value, even if not perfect.
If I move it would be either because I can't afford it or I have a place I would be happier to live (people, weather, activities).
Of course we should know and follow the law, and not let states like MA nor NY overstep their bounds when moving.
NY can be very aggressive. I was audited recently for a non-residency related issue, but I defended myself and proved i was correct and they
were quite helpful and friendly in resolving the issue. Not sure about MA, but a call to the state agency might be helpful if you have any unique situations. While I didn't enjoy being audited, NYS Dept of Finance and Taxation has been nothing but helpful.
Topic Author
protagonist
Posts: 9279
Joined: Sun Dec 26, 2010 11:47 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by protagonist »

SemperFi79 wrote: Sun Apr 18, 2021 8:28 pm Great question OP! My question was similar, so you beat me to the punch! My question was about the “particulars” for having two homes and what things to consider for residency/domicile. Which I think was at the core of your question before payment to taxes became part of the conversation. In our case, we want to summer in Montana or Idaho, and winter in AZ or FL. (We are looking to move out of Oregon and buy land in a summer state and winter state and custom build) I was going to ask how do people with more than one home handle that establishment? And obviously taxes will come up. There was a comment/question made with regard to “what if time is spent out of country”? My friend resides part-time in Germany and part-time in New Jersey and does her Germany taxes first to then give to her CPA in NJ. Since we are fully retired, we also would like to spend 2-4 months overseas (or more) and part-time in MT/ID and part-time in AZ or FL. I know there are people doing it, but the particulars are cloudy considering the 183/4 rule pops up. What if you spend more time overseas, than at your two other residents in the states, but then spend all your time one year in one state? I can’t believe it’s become that complex, since people are more mobile and seem to have more than one residence they live in. So how do you do that? Thanks OP for bringing this topic to the forum.
My pleasure! Yes, it does seem hopelessly complex for us nomads. The amount of record-keeping that would appear potentially necessary to bolster one's residency claim seems gargantuan if, like me, you could envision yourself not spending even close to 183 days in any one particular domicile.
Topic Author
protagonist
Posts: 9279
Joined: Sun Dec 26, 2010 11:47 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by protagonist »

criticalmass wrote: Mon Apr 19, 2021 9:32 am
Jack FFR1846 wrote: Fri Apr 16, 2021 2:47 pm Massachusetts has a 5 year look back if you pass. So thinking you can leave more than $1M in your estate and no tax being due, forget it. Unless, of course, you move to Florida, break all Mass ties and don't die for 5 years.

(my mom has snowbirded between Mass and Florida for a decade but is now permanently in Mass and taxes will be due on her > $1M estate for Ma.)
I am not sure if that is true, as the rule does not appear to have changed substantially much since 1995.

This is a well known precedent that you may live full time
in Massachusetts until passing and have your will probated in Florida, avoiding Massachusetts taxes.

https://www.google.com/amp/s/www.sun-se ... y,amp.html
Or
https://www.sun-sentinel.com/news/fl-xp ... story.html
I'm a bit confused about this. Based only on the Sun-Sentinel article (unless I read it wrong and am missing something) I am not sure you can infer that anybody can live in MA and have their will probated in FL to avoid MA taxes.
So Rose had a home in FL which she had not visited in many years.
Had she legally established FL residency or was she a legal MA resident? Where were her will and trust written and filed? Had she been paying MA income tax in the years prior to her death? When she voted in the 1980 election, did she vote in FL or MA? She only left $100K to her heirs...shouldn't that make her exempt from MA taxes anyway, so it wouldn't matter from a tax perspective?
NS_Bane
Posts: 117
Joined: Sat Mar 17, 2018 12:27 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by NS_Bane »

criticalmass wrote: Mon Apr 19, 2021 9:35 am
NS_Bane wrote: Sun Apr 18, 2021 10:17 pm
protagonist wrote: Fri Apr 16, 2021 2:26 pm
bsteiner wrote: Fri Apr 16, 2021 2:08 pm
protagonist wrote: Fri Apr 16, 2021 1:41 pm

I understand that. But in my case (as well as many others), I don't necessarily want to have one primary residence. It seems reasonable to me that a person who lives roughly half the time in two states should be able to choose which to call his "primary", and I get the 183 day rule, driver's license, voting, domicile, etc....but to have to keep careful records of where you are every day during the year, where you have more family photos, where you shop for something, or to have to give up the primary doc who has been seeing you for decades to prove that you no longer live somewhere seems to me insane. Yet that is what I am reading on multiple sites. Especially if you do still live there "almost" half the time.

I don't mean to be arguing the validity of state law here....that would be pointless. But I do wonder if what I am reading, that seems so excessive to me, is something that only generally applies to those with huge state tax bills (which I understand would raise the eyebrows of the state revenue department), or whether they would audit and require that much proof from an "ordinary guy like me". I am completely retired, own my MA home outright, and other than getting Medicare in MA currently (which is slightly different than many other states) I can't think of any specific "benefits" the state is giving me. I have no intention of trying to game the system, but I want to understand it. If I decide down the line I want to be an official FL resident, that would be where I would choose to spend at least half of my time...but I would still like the option of, for example, seeing MA doctors, maintaining my MA home where I have a lot of roots, and spending a significant amount of time there.

In fact, I am all over the place already. Winters in FL, a month in the summer in France playing music, 4 days every two weeks at my fiancee's place in NYC, back and forth to visit my daughter in Maine, etc. I doubt if I spend 183 days/year anywhere as is!
Each case turns on its own facts. Try to make the facts as good as you can in case you're audited.


Where is your dog? No dog.

Where are your artworks? I would anticipate both places. I like art. The place in MA has more walls so it would prob have more art.

Which home is the nicer one? That's subjective but the one in MA is worth more. Like I said, if I got to the point where I wanted to declare FL my primary I would still envision myself living in both places almost equally.

When you come home from your trips to France, NYC and Maine, where do you come home to? France, to MA since I go there in the summer. NYC, randomly but it is certainly an easier trip from MA (fiancee will spend a lot of time in FL as well). ME prob. from MA since it is a short drive.

Where do you go to church, synagogue or mosque? I don't.

Where are you involved in community organizations? Presumably both at that point.

Where do you get together with your family for holidays? NY metro area.

See the New York nonresident audit guidelines shown above. Massachusetts isn't bound by them but the concepts should be similar.
I think they are.

My point here is that I would not (in my mind) have one clear primary residence....I would have to choose one for practical purposes (voting, driving, taxation). Of course, given the option, I would choose FL because of the tax and estate advantage, but not out of dishonesty.
Based on these facts, your domicile would be in MA.
What facts above are you using (no dog? vacationing lb France?, size of summer home?), and which Massachusetts Gerneral Laws are you relying on to make this claim?
This is not complicated and most people are overthinking this (how would "no dog" mean a person's domicile is in Florida?). Based on the facts above:
- home in MA has more art
- home in MA is worth more
- when returning from regular trips to France, goes to MA

This is a "facts and circumstances" test and the burden would be on the taxpayer to prove the government is wrong once the government brings a claim. Some people in this thread have tried to be helpful by imagining facts and circumstances that would be helpful to OP, but OP has said on balance those facts and circumstances would actually point to MA. The point is OP needs to be creative and think of what facts and circumstances point to FL not MA. And if the only facts and circumstances that OP can think of point to MA, well then MA is the domicile.
Jack FFR1846
Posts: 18502
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by Jack FFR1846 »

This does not need to be difficult. If you make things complicated by owning a house in MA, then expect your estate to be scrutinized by MA.

Here's how you make things easy: Buy a house in Florida. Live in your house in Florida for 5 years. Sell your MA house and close all accounts you have in MA. Get a license and vote in Florida. When you visit MA, stay in a hotel or Air BnB or with friends. Register and insure your car in Florida. Make sure your umbrella policy lists your Florida address.

If you won't do all of this, and your estate is over $1M, expect MA to collect taxes.
Bogle: Smart Beta is stupid
User avatar
RickBoglehead
Posts: 7877
Joined: Wed Feb 14, 2018 8:10 am
Location: In a house

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by RickBoglehead »

protagonist wrote: Fri Apr 16, 2021 2:26 pm My point here is that I would not (in my mind) have one clear primary residence....I would have to choose one for practical purposes (voting, driving, taxation). Of course, given the option, I would choose FL because of the tax and estate advantage, but not out of dishonesty.
This summarizes the problem. You do need to choose, it's not a choice not to choose, and you have to understand each state's rules before you make that choice. Once made, there is no ambiguity, you have a primary residence.

Many states tax homes differently if you reside there (i.e. give a tax break).

Find a good accountant that has experience in this, and make sure you follow the rules set by each state, and keep records of where you are. Remember that things like GoogleMaps track where you are, and are useful (or not) for proving where you where. https://www.google.com/maps/timeline
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
bsteiner
Posts: 9210
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by bsteiner »

protagonist wrote: Mon Apr 19, 2021 4:09 pm
criticalmass wrote: Mon Apr 19, 2021 9:32 am
Jack FFR1846 wrote: Fri Apr 16, 2021 2:47 pm Massachusetts has a 5 year look back if you pass. So thinking you can leave more than $1M in your estate and no tax being due, forget it. Unless, of course, you move to Florida, break all Mass ties and don't die for 5 years.

(my mom has snowbirded between Mass and Florida for a decade but is now permanently in Mass and taxes will be due on her > $1M estate for Ma.)
I am not sure if that is true, as the rule does not appear to have changed substantially much since 1995.

This is a well known precedent that you may live full time
in Massachusetts until passing and have your will probated in Florida, avoiding Massachusetts taxes.

https://www.google.com/amp/s/www.sun-se ... y,amp.html
Or
https://www.sun-sentinel.com/news/fl-xp ... story.html
I'm a bit confused about this. Based only on the Sun-Sentinel article (unless I read it wrong and am missing something) I am not sure you can infer that anybody can live in MA and have their will probated in FL to avoid MA taxes.
So Rose had a home in FL which she had not visited in many years.
Had she legally established FL residency or was she a legal MA resident? Where were her will and trust written and filed? Had she been paying MA income tax in the years prior to her death? When she voted in the 1980 election, did she vote in FL or MA? She only left $100K to her heirs...shouldn't that make her exempt from MA taxes anyway, so it wouldn't matter from a tax perspective?
She lived in Florida and had a stroke. I don't recall the specifics of her case (it was many years ago), but if she was brought there as opposed to making her own decision to go there, her domicile may have remained in Florida. We get cases from time to time where someone in one state ends up in a nursing home or an assisted living facility in another state. Each one turns on its own facts. Did the person move to the new place with the intention of making it his/her permanent home?
UpperNwGuy
Posts: 9479
Joined: Sun Oct 08, 2017 7:16 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by UpperNwGuy »

It's pretty clear to me that you are a long-time Massachusetts resident who has recently acquired a vacation home in Florida. I would arrange my life around that description.
User avatar
RickBoglehead
Posts: 7877
Joined: Wed Feb 14, 2018 8:10 am
Location: In a house

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by RickBoglehead »

bsteiner wrote: Mon Apr 26, 2021 8:12 am
She lived in Florida and had a stroke. I don't recall the specifics of her case (it was many years ago), but if she was brought there as opposed to making her own decision to go there, her domicile may have remained in Florida. We get cases from time to time where someone in one state ends up in a nursing home or an assisted living facility in another state. Each one turns on its own facts. Did the person move to the new place with the intention of making it his/her permanent home?
That's a good word, intention.

A few years back, my in-laws moved to independent living, then assisted living. All within the same state, but they left their home of decades behind. In our state, as in many, there is a tax exemption for primary residences. My father in-law stated to everyone who asked, "I'm going back to my house when I'm better". He intended to do so. It was unlikely, and more unlikely as time went on.

Fast forward maybe 2 years. Despite being told by his daughter to not sign ANYTHING without her and I reviewing it, he registered to vote when his independent living building had a voter registration drive. Therefore, he pretty clearly intended that his primary residence was now his independent living apartment.

We promptly filled out paperwork revoking his property tax exemption, since the argument was lost. By not listening to us, he cost himself several thousand dollars a year in property taxes.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
bsteiner
Posts: 9210
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by bsteiner »

RickBoglehead wrote: Mon Apr 26, 2021 9:00 am
bsteiner wrote: Mon Apr 26, 2021 8:12 am
She lived in Florida and had a stroke. I don't recall the specifics of her case (it was many years ago), but if she was brought there as opposed to making her own decision to go there, her domicile may have remained in Florida. We get cases from time to time where someone in one state ends up in a nursing home or an assisted living facility in another state. Each one turns on its own facts. Did the person move to the new place with the intention of making it his/her permanent home?
That's a good word, intention.

A few years back, my in-laws moved to independent living, then assisted living. All within the same state, but they left their home of decades behind. In our state, as in many, there is a tax exemption for primary residences. My father in-law stated to everyone who asked, "I'm going back to my house when I'm better". He intended to do so. It was unlikely, and more unlikely as time went on.

Fast forward maybe 2 years. Despite being told by his daughter to not sign ANYTHING without her and I reviewing it, he registered to vote when his independent living building had a voter registration drive. Therefore, he pretty clearly intended that his primary residence was now his independent living apartment.

We promptly filled out paperwork revoking his property tax exemption, since the argument was lost. By not listening to us, he cost himself several thousand dollars a year in property taxes.
It's harder for a taxpayer than for the state to argue that changing or keeping voter registration shouldn't control. However, other factors would also be considered.

I had an estate where the decedent rented an apartment in another state near her daughters and spent most of her time there, but continued to vote in person in her old state. We took the position that she was domiciled in her new state. I thought that a helpful fact would be that she had a moving van move her important possessions. The old state didn't audit her nonresident estate tax return, so we don't know what would have happened if they had.
User avatar
RickBoglehead
Posts: 7877
Joined: Wed Feb 14, 2018 8:10 am
Location: In a house

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by RickBoglehead »

bsteiner wrote: Mon Apr 26, 2021 9:42 am
RickBoglehead wrote: Mon Apr 26, 2021 9:00 am
bsteiner wrote: Mon Apr 26, 2021 8:12 am
She lived in Florida and had a stroke. I don't recall the specifics of her case (it was many years ago), but if she was brought there as opposed to making her own decision to go there, her domicile may have remained in Florida. We get cases from time to time where someone in one state ends up in a nursing home or an assisted living facility in another state. Each one turns on its own facts. Did the person move to the new place with the intention of making it his/her permanent home?
That's a good word, intention.

A few years back, my in-laws moved to independent living, then assisted living. All within the same state, but they left their home of decades behind. In our state, as in many, there is a tax exemption for primary residences. My father in-law stated to everyone who asked, "I'm going back to my house when I'm better". He intended to do so. It was unlikely, and more unlikely as time went on.

Fast forward maybe 2 years. Despite being told by his daughter to not sign ANYTHING without her and I reviewing it, he registered to vote when his independent living building had a voter registration drive. Therefore, he pretty clearly intended that his primary residence was now his independent living apartment.

We promptly filled out paperwork revoking his property tax exemption, since the argument was lost. By not listening to us, he cost himself several thousand dollars a year in property taxes.
It's harder for a taxpayer than for the state to argue that changing or keeping voter registration shouldn't control. However, other factors would also be considered.

I had an estate where the decedent rented an apartment in another state near her daughters and spent most of her time there, but continued to vote in person in her old state. We took the position that she was domiciled in her new state. I thought that a helpful fact would be that she had a moving van move her important possessions. The old state didn't audit her nonresident estate tax return, so we don't know what would have happened if they had.
Right. In a similar timeframe, his daughter was handling his finances with POA, and eventually was making his medical decisions. We felt we had pushed it enough, because it was obvious to all but him that he was never returning to his home.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
criticalmass
Posts: 2843
Joined: Wed Feb 12, 2014 9:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by criticalmass »

NS_Bane wrote: Mon Apr 26, 2021 6:56 am
criticalmass wrote: Mon Apr 19, 2021 9:35 am
NS_Bane wrote: Sun Apr 18, 2021 10:17 pm
protagonist wrote: Fri Apr 16, 2021 2:26 pm
bsteiner wrote: Fri Apr 16, 2021 2:08 pm

Each case turns on its own facts. Try to make the facts as good as you can in case you're audited.


Where is your dog? No dog.

Where are your artworks? I would anticipate both places. I like art. The place in MA has more walls so it would prob have more art.

Which home is the nicer one? That's subjective but the one in MA is worth more. Like I said, if I got to the point where I wanted to declare FL my primary I would still envision myself living in both places almost equally.

When you come home from your trips to France, NYC and Maine, where do you come home to? France, to MA since I go there in the summer. NYC, randomly but it is certainly an easier trip from MA (fiancee will spend a lot of time in FL as well). ME prob. from MA since it is a short drive.

Where do you go to church, synagogue or mosque? I don't.

Where are you involved in community organizations? Presumably both at that point.

Where do you get together with your family for holidays? NY metro area.

See the New York nonresident audit guidelines shown above. Massachusetts isn't bound by them but the concepts should be similar.
I think they are.

My point here is that I would not (in my mind) have one clear primary residence....I would have to choose one for practical purposes (voting, driving, taxation). Of course, given the option, I would choose FL because of the tax and estate advantage, but not out of dishonesty.
Based on these facts, your domicile would be in MA.
What facts above are you using (no dog? vacationing lb France?, size of summer home?), and which Massachusetts Gerneral Laws are you relying on to make this claim?
This is not complicated and most people are overthinking this (how would "no dog" mean a person's domicile is in Florida?). Based on the facts above:
- home in MA has more art
- home in MA is worth more
- when returning from regular trips to France, goes to MA
What facts are you relying on in the Massachusetts General Laws and tax code to suggest that "more art" supersedes the 183 day test that IS in 62 MGL?
Assuming the OP is not Dennis Kozlowski or acting like Kozlowski to defraud tax on art, that is not a relevant claim.

How much the home is worth isn't worth much either for residency facts. You can rent full time in Massachusetts and own a chalet in North Conway, New Hampshire but that doesn't make you a NH resident. Or for two owned houses, your residency doesn't change each time an appraisal indicates one is now worth more than the other in a given month, as homes in different states (towns, streets, lots) do not appreciate in value identically over time. If my home is suddenly damaged due to a hurricane that lowers the value, not the residency.

Similarly, where your vacation travels take you does not make you a resident either. Heck, I take the Paris - Boston route too because it is shorter and usually cheaper, than I can stay in New England for a few days or maybe even weeks. That doesn't make me a resident. Stay with the legal definitions.

Best to stick with the facts AND the law for residency definition before inventing ad hoc creative tests on the internet.
JackoC
Posts: 4714
Joined: Sun Aug 12, 2018 11:14 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by JackoC »

criticalmass wrote: Mon Apr 26, 2021 11:48 am
NS_Bane wrote: Mon Apr 26, 2021 6:56 am

This is not complicated and most people are overthinking this (how would "no dog" mean a person's domicile is in Florida?). Based on the facts above:
- home in MA has more art
- home in MA is worth more
- when returning from regular trips to France, goes to MA
What facts are you relying on in the Massachusetts General Laws and tax code to suggest that "more art" supersedes the 183 day test that IS in 62 MGL?
Assuming the OP is not Dennis Kozlowski or acting like Kozlowski to defraud tax on art, that is not a relevant claim.

How much the home is worth isn't worth much either for residency facts. You can rent full time in Massachusetts and own a chalet in North Conway, New Hampshire but that doesn't make you a NH resident. Or for two owned houses, your residency doesn't change each time an appraisal indicates one is now worth more than the other in a given month, as homes in different states (towns, streets, lots) do not appreciate in value identically over time. If my home is suddenly damaged due to a hurricane that lowers the value, not the residency.

Similarly, where your vacation travels take you does not make you a resident either. Heck, I take the Paris - Boston route too because it is shorter and usually cheaper, than I can stay in New England for a few days or maybe even weeks. That doesn't make me a resident. Stay with the legal definitions.

Best to stick with the facts AND the law for residency definition before inventing ad hoc creative tests on the internet.
I strongly second your idea in general on the last point. This forum has a tendency to talk itself out of tax savings. Also if people have some socio-political idea that one should pay more taxes than necessary, they should just be upfront about that, not present it as a supposed legal issue. And if they *are* upfront about that, those opinions should be respected in theory but dismissed as irrelevant to the question practically IMO.

That said, the poster bsteiner did post a detailed reference albeit for NY not MA, their audit guidelines. I'll relink once more:
https://www.tax.ny.gov/pdf/2014/misc/no ... s_2014.pdf
It goes on and on, though in somewhat equivocal language, about auditors considering various details like the relative price of the houses, what stuff is at each house (how many 'staff' are stationed at each house... giving a hint that these audits will generally go where the money is :happy ) and so forth. All that stuff is surely not in the text of the applicable NY law.

Ideally OP would find a similar document for MA. But in the absence of that it seems reasonable to assume auditors in high tax states with similar issue of residents seeking to relocate to FL for tax purposes but still live part time in the high tax state, will look at similar things.
NS_Bane
Posts: 117
Joined: Sat Mar 17, 2018 12:27 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by NS_Bane »

criticalmass wrote: Mon Apr 26, 2021 11:48 am What facts are you relying on in the Massachusetts General Laws and tax code to suggest that "more art" supersedes the 183 day test that IS in 62 MGL?
It's right there in the definition of "Resident" in 62 MGL (https://malegislature.gov/Laws/GeneralL ... 2/Section1): "any natural person domiciled in the commonwealth."
criticalmass wrote: Mon Apr 26, 2021 11:48 am Similarly, where your vacation travels take you does not make you a resident either. Heck, I take the Paris - Boston route too because it is shorter and usually cheaper, than I can stay in New England for a few days or maybe even weeks. That doesn't make me a resident. Stay with the legal definitions.
Most states generally apply the common-law concept of "domicile" which is a facts and circumstances test. But don't take my word for it - take it from the Massachusetts Department of Revenue https://www.mass.gov/technical-informat ... sachusetts:

A person who is domiciled in Massachusetts is considered a resident of Massachusetts. In the absence of a statutory definition of domicile, the Department looks to common law concepts in fashioning a definition. See Commonwealth v. Davis, 284 Mass. 41 (1933). Domicile is "the place which is an individual's true, fixed and permanent home, determined by established common law principles and the facts and circumstances in each case." 830 CMR 62.5A.1(2), Non-resident Income Tax. A domicile determination is largely a factual determination that takes into consideration many factors relating to a person's social, economic and political life.

Any first year law student (and it has been many years since I was one) is familiar with the concept of domicile. Under common law, everyone has a single domicile, and the interesting cases you hear about in law school are where someone's domicile was challenged and a court had to review all of the facts and circumstances presented to rule where the domicile was, and these are the wacky cases where someone proved it based on where they kept their favorite Van Gough painting or something similarly obscure and arbitrary.

Just look at the example of Paul and Linda in the MA Dept Revenue link I posted above. In that example, they spend less than 6 months in MA. However the MA Dept of Revenue considers them residents for tax purposes, because their driver's licenses, bank accounts and friends and family are all in MA.

Circling back to my earlier post that you tried to pounce on, OP didn't seem to like the concept that he has to pick a domicile. He does, and he has to establish it based on the facts and circumstances. When someone tried to helpfully suggest different facts and circumstances he could use to establish he live in FL, he said those all pointed to MA. Well if ever told a judge that then the judge would rule his domicile is in MA. He needs to be creative and think of facts and circumstances that would show his domicile is in FL. Furthermore, it would be his burden to make that showing because he is asserting that his domicile of origin had changed (See Commonwealth v. Davis, 284 Mass. 41 (1933)).
criticalmass wrote: Mon Apr 26, 2021 11:48 am Best to stick with the facts AND the law for residency definition before inventing ad hoc creative tests on the internet.
Look I don't blame you for not knowing the law, especially common law. It's complicated. But in this conversation you are achieving an interesting combination of being both wrong and also condescending about it.
Boglegrappler
Posts: 1489
Joined: Wed Aug 01, 2012 9:24 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by Boglegrappler »

The important thing for people in these circumstances to be aware of is that the states (in addition to having absolute power to assess and collect) have two bites at the apple to win.

First they look to see if you are still domiciled in their state. When you still maintain a residence there, they now look to the ancillary items like church, club membership status, doctors, dentists, other activities and involvements, voting, licenses, etc. If they can win on domicile, then you lose.

But......if they lose on that point and you're clearly domiciled elsewhere, then they start counting your days present in the state. (If they win, then you are a "statutory resident" for the year in question.) You'll have to prove that you were somewhere else for at least 183 days. They will look at cellphone records, EZ passes, credit card charges, cable tv charges, delivery records from UPS and Fedex, ATM withdrawals, all checks written, and anything else they can think of. As the Mass audit document notes, they send auditors to your residence, or building and interview neighbors and/or doormen. It is tempting to say that the state won't go to that bother, but you can be sure that they will. I've seen it.

Anyone with material income (and maintaining two places of abode) who thinks that he's getting taxed as a Floridian Tennesseean, or Texan instead of as a New Yorker needs to understand this. As this thread demonstrates clearly, there is plenty of ignorance and generally wrong information that circulates.

Finally, and worth noting, because of the way governments work, it's likely that if you lose a case like this it will be a three year or more tax bill, depending on what the statue of limitations is for the audit. BSteiner can weigh in on this, but I'm guessing that most of the audits aren't initiated quickly and usually pick up several years worth of "years in question" rather than just the first year after the change. I'd be interested to know how often that happens.
JackoC
Posts: 4714
Joined: Sun Aug 12, 2018 11:14 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by JackoC »

Boglegrappler wrote: Tue Apr 27, 2021 7:44 am The important thing for people in these circumstances to be aware of is that the states (in addition to having absolute power to assess and collect) have two bites at the apple to win.

First they look to see if you are still domiciled in their state. When you still maintain a residence there, they now look to the ancillary items like church, club membership status, doctors, dentists, other activities and involvements, voting, licenses, etc. If they can win on domicile, then you lose.

But......if they lose on that point and you're clearly domiciled elsewhere, then they start counting your days present in the state. (If they win, then you are a "statutory resident" for the year in question.) You'll have to prove that you were somewhere else for at least 183 days. They will look at cellphone records, EZ passes, credit card charges, cable tv charges, delivery records from UPS and Fedex, ATM withdrawals, all checks written, and anything else they can think of. As the Mass audit document notes, they send auditors to your residence, or building and interview neighbors and/or doormen. It is tempting to say that the state won't go to that bother, but you can be sure that they will. I've seen it.

Anyone with material income (and maintaining two places of abode) who thinks that he's getting taxed as a Floridian Tennesseean, or Texan instead of as a New Yorker needs to understand this. As this thread demonstrates clearly, there is plenty of ignorance and generally wrong information that circulates.

Finally, and worth noting, because of the way governments work, it's likely that if you lose a case like this it will be a three year or more tax bill, depending on what the statue of limitations is for the audit. BSteiner can weigh in on this, but I'm guessing that most of the audits aren't initiated quickly and usually pick up several years worth of "years in question" rather than just the first year after the change. I'd be interested to know how often that happens.
I'd just note again that while this would generally apply to OP, an MA resident now who may seek to be considered a FL resident for tax purposes while maintaining a home in MA, it does not apply to literally anybody 'maintaining two places of abode who thinks he's getting taxed as a Floridian...instead of a NY'er'. The NYS audit guidelines (and according to NS_Bane's it's the same in MA) explicitly say the burden of proof is on the party claiming residency has changed. Thus if you're a FL resident who lives part time in NY, not a previous NY resident, NY has to prove you were there *more than* 183 days (which is the criterion, misstated by a day in a number of posts, albeit a nitpick) to declare you have become a statutory resident of NY (or likewise in theory at least *they* could seek to prove you've become constructively a resident based on the same common low concepts [social, medical, religious, etc connections] whereby a previous NY resident might have to prove they were not still a NY resident). I think it's worth reiterating if it's time for a grand summary and open ended statements about 'wrong information' in the thread.
MarkNYC
Posts: 2999
Joined: Mon May 05, 2008 7:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by MarkNYC »

JackoC wrote: Tue Apr 27, 2021 8:59 am
The NYS audit guidelines (and according to NS_Bane's it's the same in MA) explicitly say the burden of proof is on the party claiming residency has changed. Thus if you're a FL resident who lives part time in NY, not a previous NY resident, NY has to prove you were there *more than* 183 days (which is the criterion, misstated by a day in a number of posts, albeit a nitpick) to declare you have become a statutory resident of NY ...
I think it's worth reiterating if it's time for a grand summary and open ended statements about 'wrong information' in the thread.
That statement is not correct. The burden of proving "not more than 183 days in NY" lies with the taxpayer.

The NYS audit guidelines state that "the burden of proving a change of domicile is upon the party asserting the change." But the issue of domicile is separate from the issue of statutory residency, and the 183 day rule applies only to statutory residency, not domicile.

In the Statutory Residency section, the audit guidelines state -

"A taxpayer who is maintaining a permanent place of abode bears the burden of proving that he spent less than 184 days in NY State or City for such year of the audit period."

This guideline is supported by the recordkeeping requirements of NY State tax law 20 NYCRR 105.20(c)-

"Any person domiciled outside NY State who maintains a permanent place of abode within NY State during any taxable year, and claims to be a nonresident, must keep and have available for examination by the Dept. of Taxation and Finance adequate records to substantiate the fact that such person did not spend more than 183 days within NY State."
Boglegrappler
Posts: 1489
Joined: Wed Aug 01, 2012 9:24 am

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by Boglegrappler »

QED.

Nice clarifying post.

I have a number of friends who I fear may not understand this properly.
criticalmass
Posts: 2843
Joined: Wed Feb 12, 2014 9:58 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by criticalmass »

NS_Bane wrote: Tue Apr 27, 2021 3:53 am
criticalmass wrote: Mon Apr 26, 2021 11:48 am What facts are you relying on in the Massachusetts General Laws and tax code to suggest that "more art" supersedes the 183 day test that IS in 62 MGL?
It's right there in the definition of "Resident" in 62 MGL (https://malegislature.gov/Laws/GeneralL ... 2/Section1): "any natural person domiciled in the commonwealth."
criticalmass wrote: Mon Apr 26, 2021 11:48 am Similarly, where your vacation travels take you does not make you a resident either. Heck, I take the Paris - Boston route too because it is shorter and usually cheaper, than I can stay in New England for a few days or maybe even weeks. That doesn't make me a resident. Stay with the legal definitions.
Most states generally apply the common-law concept of "domicile" which is a facts and circumstances test. But don't take my word for it - take it from the Massachusetts Department of Revenue https://www.mass.gov/technical-informat ... sachusetts:

A person who is domiciled in Massachusetts is considered a resident of Massachusetts. In the absence of a statutory definition of domicile, the Department looks to common law concepts in fashioning a definition. See Commonwealth v. Davis, 284 Mass. 41 (1933). Domicile is "the place which is an individual's true, fixed and permanent home, determined by established common law principles and the facts and circumstances in each case." 830 CMR 62.5A.1(2), Non-resident Income Tax. A domicile determination is largely a factual determination that takes into consideration many factors relating to a person's social, economic and political life.

Any first year law student (and it has been many years since I was one) is familiar with the concept of domicile. Under common law, everyone has a single domicile, and the interesting cases you hear about in law school are where someone's domicile was challenged and a court had to review all of the facts and circumstances presented to rule where the domicile was, and these are the wacky cases where someone proved it based on where they kept their favorite Van Gough painting or something similarly obscure and arbitrary.

Just look at the example of Paul and Linda in the MA Dept Revenue link I posted above. In that example, they spend less than 6 months in MA. However the MA Dept of Revenue considers them residents for tax purposes, because their driver's licenses, bank accounts and friends and family are all in MA.

Circling back to my earlier post that you tried to pounce on, OP didn't seem to like the concept that he has to pick a domicile. He does, and he has to establish it based on the facts and circumstances. When someone tried to helpfully suggest different facts and circumstances he could use to establish he live in FL, he said those all pointed to MA. Well if ever told a judge that then the judge would rule his domicile is in MA. He needs to be creative and think of facts and circumstances that would show his domicile is in FL. Furthermore, it would be his burden to make that showing because he is asserting that his domicile of origin had changed (See Commonwealth v. Davis, 284 Mass. 41 (1933)).
criticalmass wrote: Mon Apr 26, 2021 11:48 am Best to stick with the facts AND the law for residency definition before inventing ad hoc creative tests on the internet.
Look I don't blame you for not knowing the law, especially common law. It's complicated. But in this conversation you are achieving an interesting combination of being both wrong and also condescending about it.
Not to worry, I have knowledge of the law that successfully keeps me well out of trouble. Not sure why you prefer to be condescending or why you are trying to change circumstances from what I wrote to here. Perhaps that is a new Boglehead common law. :) Clearly, if a person has driver's licenses in MA as in your example, they are likely a Massachusetts resident, regardless of how many nights she slept in Massachusetts last year.

You may have missed that the OP is contemplating changing domicile, and mentioned changing driver license, voter registration, and voting registration to the new domicile. That is what I am referring to, not your interpretation or alternative examples. My bank accounts are with Schwab (Nevada) and Ally (Utah). I wish anyone good luck trying to tell me or any state department of taxes that I am a Nevada or Utah resident, I haven't stepped into either place in years, except perhaps to change planes. Keep the mailing address at your chosen domicile. I also have friends and family in Massachusetts and throughout the United States, Canada, and Europe, but my domicile remains. I note that you needed to go back to 1933 to find your case which ironically just confirms that if you claim a domicile without actually living there very much you are afoul of Massachusetts.

But more importantly, when you carefully reviewed the case you cited, you would have noted that Edgar was attempting to claim a domicile in Massachusetts DESPITE that he "spent little time in Texas and continued to be in the city and other places in this Commonwealth (MASSACHUSETTS) as much as he always had been; and that he made no change in his general mode of living and activities."

That's not the facts or circumstances that the OP contemplates, nor is it what I mentioned earlier and now.

In your other example above, also note that the couple Paul/Linda already consider their domicile to be Massachusetts, so there is no dispute or concern.

Yes, if you try to cheat the system, Massachusetts DOR will throw the book. Nobody says otherwise, certainly not me. But you CAN maintain domicile in Florida and maintain property in Massachusetts (and Minnesota, and Corsica, and Alaska) that you visit from time to time. Just don't be like the seven Northwest pilots that attempted to claim "residency" in Florida that was actually an uninhabitable shack while living in Minneapolis. The state tax authorities were not impressed. Some got significant tax bills AND felony tax evasion charges. Have a great day!
FIREGuy88
Posts: 282
Joined: Sun Nov 29, 2020 9:56 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by FIREGuy88 »

This is a great thread. Thanks all for your thoughtful replies.

Has anyone ever done the reverse? I am currently a FL resident, but considering getting an apartment in NYC for 3-4 months a year. While I certainly have domicile in FL, and I wouldn't come close to 184+ days, I still want to avoid even a chance of getting audited by NY.

What's the best way to avoid getting audited by NY? If you're simply renting an apartment and you sign up for cable, gas and electric, do you go into a database somewhere? Would subletting a place and staying out of their database be less of a hassle?
User avatar
NavyIC3
Posts: 333
Joined: Wed Jan 10, 2018 1:18 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by NavyIC3 »

How are interest, dividends and capital gains handled?
FIREGuy88
Posts: 282
Joined: Sun Nov 29, 2020 9:56 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by FIREGuy88 »

NavyIC3 wrote: Sat Aug 14, 2021 9:19 am How are interest, dividends and capital gains handled?
I'd be curious to know this as well.
Tanelorn
Posts: 2370
Joined: Thu May 01, 2014 9:35 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by Tanelorn »

NavyIC3 wrote: Sat Aug 14, 2021 9:19 am How are interest, dividends and capital gains handled?
They are sourced to your domicile state unless you are a part year resident moving between states. So if you stay a full time FL resident, your investment related income would all (not be) taxed there. If you have K1’s from business investments that do business in NY, you might end up with NY sourced income and potentially have to file a tax return there related to that income.
wrongfunds
Posts: 3187
Joined: Tue Dec 21, 2010 2:55 pm

Re: Snowbirds establishing FL residency from Northeast- Residency audits

Post by wrongfunds »

When people seriously recommend burner phone, I just have to wonder if they would end up getting in trouble. True or not, terrorists are the people who use burner phones. I can almost guarantee that if any arm of the government end up looking at your affairs, having burner phone will be used against you.
Post Reply