"Le bon Dieu est dans le detail" - "God is in the details" said Gustave Flaubert in 1820. The expression morphed into "The devil is in the details."
In tax planning, attention to details is absolutely essential - dot the "i"s, cross the "t"s, and tie your shoe laces. Sidney W. Swartz tripped over his untied laces, and it cost him $890,103.54.
Sidney W. Swartz and Judith W. Swartz owned a house in Marblehead, a condominium in Brookline, a house in Delray Beach, Florida, and a condominium in Boca West. On October 13, 2004 they filed Declarations of Domicile in Florida. On October 14, 2004 Sidney registered to vote in Florida and Judith registered three weeks later. In the November 2004 election Judith voted in Marblehead by absentee ballot.
Cellphone bills were sent to Delray Beach, but the statement from the Boca West Golf club was sent to Marblehead, as were credit card statements and the Palm Beach County real estate tax bill. Sidney and Judith signed Florida estate planning documents, but not until 2005.
Sidney and Judith belonged to synagogues in both Massachusetts and Florida. Sidney belonged to a golf club in Massachusetts and one in Florida. Sidney and Judith had physicians in Massachusetts and Florida. Sidney and Judith had tickets to concerts and musical productions in Florida - Judith purchased a membership in the Massachusetts Museum of Fine Arts in September of 2004.
In 2004 Sidney sold stock in Timberline, a shoe manufacturer. He did not report the sale for Massachusetts purposes on the grounds that he was a Florida domiciliary. The Massachusetts Department of Revenue disagreed, and the case wound up in the Appellate Tax Board, which held for the Department of Revenue, because there were more circumstances supporting Massachusetts domicile than Florida domicile.
The question of domicile for tax purposes is tricky, often based on "facts and circumstances." A collection of small items can tip the scales. If Swartz had done a few things in addition, or done some things earlier, the decision might have gone the other way. We will be glad to help you plan your change of domicile so that it will withstand challenge from Massachusetts tax authorities.
