Asserting that the taxpayer, Jeffrey E. Horvitz, had changed his domicile from Florida to Massachusetts effective September 2, 1991, the defendant Commissioner of Revenue (commissioner) assessed personal income taxes against him from that date to December 31, 1992. Horvitz paid the assessed amount, but denied that he had changed his domicile and applied for an abatement in full.
1. Procedural history. The board held evidentiary hearings, during which it heard five witnesses (including Horvitz) and received extensive documentary exhibits. Subsequently, the board determined that the commissioner had correctly assessed Horvitz for personal income taxes as a domiciliary of Massachusetts and denied his abatement claims. Pursuant to G. L. c. 58A, § 13, Horvitz requested findings of fact and a report, and thereafter the board provided a comprehensive statement.
In the opinion section of its findings of fact and report, the board characterized the case as a statutory tax abatement proceeding under G. L. c. 62C, § 39, and ruled that therefore the party seeking the abatement (Horvitz) had the burden of proof. This meant that Horvitz was assigned the burden of persuading the board with respect to the ultimate issue, i.e., whether he changed his domicile to Massachusetts on September 2, 1991. The board then found that a change of domicile from Florida to Massachusetts had occurred in accordance with the commissioner’s determination, thereby justifying the assessment of personal income taxes against Horvitz.
Horvitz appealed, arguing essentially two points: (1) that the board erred in placing upon him the burden of proving that he had not changed his domicile from Florida to Massachusetts; and (2) that the board’s finding that a change of domicile had occurred was not supported by substantial evidence.
2. Material facts. For the most part the board’s subsidiary findings, set out below in summary form along with other uncontroverted evidence, do not appear to be genuinely disputed. A native of Ohio, Horvitz married Linda Hill in California in 1973. The couple lived in California until 1980, when they moved to Florida. They lived in Florida from 1980 through their separation in 1989, and then lived separately in Florida until 1991.
Two daughters were bom of the marriage: Christina in 1984
When Horvitz and his wife separated in November, 1989, Linda retained custody of the. children by agreement.
During 1990 and 1991, Horvitz took a variety of steps to move his former wife and his two children to the Boston area. He purchased a large house for Linda and the children in the Pride’s Crossing area of Beverly. For himself Horvitz purchased, renovated and furnished another luxurious house in Beverly Farms. He enrolled Christina in the Shore Country Day School in Beverly for the 1991-1992 school year. In letters to officials at Miami Country Day School, where Christina earlier had been enrolled, he stated that “[w]e have decided to move to the Boston area” and “the family will in fact be moving to Boston.” In a second addendum to the post-nuptial agreement (see note 2, supra), Horvitz and Linda stated, “[t]he Husband and Wife agree that they desire to reside and to have their minor children reside in the ‘Beverly-Manchester’ Massachusetts area.”
On September 2, 1991, Horvitz, Linda, and their two
In September, 1991, a company of which Horvitz was an officer leased office space in Beverly for his use. Horvitz relocated one of his two secretaries from Florida to Massachusetts to work for him there. He transferred many business and personal records from Florida to the Beverly office.
Throughout the period at issue, Horvitz visited his children in Massachusetts as often as possible. When present in Massachusetts, he often saw the children every day.
Following the Horvitzes’ separation, Linda retained physical custody of the children. Horvitz saw the children often, but did not have unlimited visitation rights. While Horvitz had considerable contacts with Massachusetts during this period, he also maintained extensive personal and business ties to Florida. When Horvitz and Linda separated, Horvitz purchased and renovated a luxury condominium in North Miami Beach, Florida. He employed a full-time housekeeper at this residence. In addition, he made offers on other Florida residential properties. In partial satisfaction of a claim against a developer
Horvitz continued to vote in Florida, retained his Florida driver’s license, and filed tax returns as a Florida resident. There was evidence that he maintained an active social life in Florida; he testified that during that period he had had a half-dozen “serious or active” dating relationships there. By contrast, he apparently had few social contacts and attended few social events in Massachusetts. He continued to serve on the boards of directors of two non-profit organizations in Florida, and was a volunteer consultant to a third.
Horvitz retained the bulk of his investment activity in Florida. He kept his primary bank account there, maintained all of his brokerage accounts there, and remained a passive investor in a number of Florida partnerships. He also continued to maintain a business office in Florida at which he employed his second, part-time, secretary. And he continued his art collection and art dealing activities, maintaining approximately ninety percent of his collection in Florida, while continuing to lend items to Florida art museums. There is also evidence that during the period at issue he obtained most of his personal services in Florida, including those of physicians, his attorney, his accountant, his travel agent, his florist and his barber. He patronized two Florida health clubs.
Horvitz met Carol Sunday in Florida in December, 1990. The relationship developed while they lived in Florida, and in May, 1992, Carol and her son moved into Horvitz’s Florida condominium. Carol also visited Horvitz a number of times at his Massachusetts residence during 1992.
3. Ultimate findings. The board found that Horvitz “intended to make Massachusetts his home for an indefinite period, and was physically present in the Commonwealth. His intent to remain in Massachusetts indefinitely was unchanged throughout the relevant time period.” Accordingly, the board concluded that Horvitz had in fact changed his domicile to Massachusetts ef
In arriving at its conclusion, the board focused particularly upon Horvitz’s concern for his children’s welfare and his desire to be with them to the greatest extent possible. “The tie that bound him to his daughters appeared, from all the evidence, to exert the strongest pull of any single factor on [Horvitz’s] home life.” In this regard, the board observed that Horvitz had considerable misgivings regarding his estranged wife’s ability to care for the children even while he was orchestrating their move to Massachusetts. Under the circumstances, the board reasoned that Horvitz was cognizant of the fact that he would have to be present in Massachusetts oh a continuing basis if the move were to succeed. It followed, according to the board, that he purposefully shifted the center of his social and domestic life to Massachusetts.
The board discounted Horvitz’s stated intent to remain a Florida domiciliary, as well as his effort to obtain legal advice to accomplish that result. Characterizing his Florida connections as “rather more form than substance,” the board concluded that “[s]uch factors were entitled to less weight than the indicators placing his domicile in Massachusetts.”
4. Burden of proof. The board allocated to Horvitz the burden of proof — and specifically the burden of persuasion — on the issue of change of domicile. Allowing that the commissioner was required to produce evidence of a domicile change upon a prima facie showing by the taxpayer that his domicile originally was elsewhere (a showing plainly made here), the board nevertheless ruled that the burden of persuasion on the issue would remain throughout with the taxpayer. This latter ruling was error.
The board may have been misled by a somewhat less than crystal clear treatment of burden of proof in prior tax cases. It has frequently been said that the burden is upon the taxpayer to establish his right to an abatement. See Staples v. Commissioner of Corps. & Taxn.,
However, in practice the allocation of the burden of proof where a taxpayer seeks relief from imposition of a tax has been far from uniform. In DiStefano v. Commissioner of Rev.,
Likewise, in New England Trust Co. v. Commissioner of Corps. & Taxn.,
What distinguishes one category of cases from the other is not apparent. Contrast, for example, Towle v. Commissioner of Rev.,
However, with the above as background, we turn to the specific question of allocating the burden of proof where the validity of a tax assessment depends upon the taxpayer’s domicile. The rules governing determinations of domicile are generally accepted. Domicile is “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,
The principle that one who asserts that a domicile has changed has the burden of proving that fact is applicable to tax cases. Thus, in Mellon National Bank & Trust Co. v. Commissioner of Corps. & Taxn., supra, where it was undisputed that the decedent was previously domiciled in Pennsylvania, the court held that “[h]ere the burden [of showing the change in domicile] is upon the commissioner who seeks to establish the tax.” This was so notwithstanding that it was the decedent’s executor that had petitioned the Probate Court for a binding declaration of domicile. See also Hopkins v. Commissioner of Corps. & Taxn., supra, wherein the commissioner attempted to impose an inheritance tax on the ground that the deceased had changed his domicile from New Hampshire to Massachusetts. The court stated, “[t]he determination of domicil is mainly a question of fact. . . . The burden of proof was upon the commissioner who seeks to establish the tax . . . Id. at 173. Should it be the taxpayer who asserts a change of domicile, then it is the taxpayer who must shoulder the burden on that issue. See Commonwealth v. Davis, supra at 48-49 (taxpayer alleged change of domicile from Massachusetts to Texas inspired by divine guidance).
We see no reason to depart from these principles in an abatement case where the validity of the tax imposition is based wholly upon the question whether the taxpayer’s domicile has changed. The burden should continue to be on the party assert
The burden to which we refer is the burden of persuasion, not merely a burden of production. Those decisions casting the burden upon the party who asserts a change in domicile clearly contemplate that a burden of persuasion is being allocated. Furthermore, placing only a burden of production upon the commissioner would have little meaning in this context. “Domicil once acquired is not lost until a new one is obtained . . . and the original domicil is presumed to have continued in the absence of compelling evidence that it was changed.” Dane v. Registrars of Voters of Concord,
5. Effect of error. Having determined that the board improperly imposed the burden of persuasion upon Horvitz, we consider whether that error made a difference in the outcome of the appeal. “It is well established that the board’s findings of fact and its decision must be supported by substantial evidence.” Irving Saunders Trust v. Assessors of Boston,
We are mindful of the deference normally paid to determinations of an administrative agency in which the Legislature has vested primary responsibility for the making of decisions of this nature. However, we cannot ignore the fact that the board itself obviously viewed the allocation of burden of proof as important to the outcome of the appeal. Thus, the board, in the opinion section accompanying its findings, directly addressed the burden of proof, assigning it erroneously to the taxpayer. It is highly unlikely that the board would have addressed the subject to the same degree if the resolution thereof did not figure in its decision.
Our concern is compounded by the difficulty of deriving this taxpayer’s intent from the particular evidence and our conclusion, stated here, that reasonable fact finders could draw (i.e., there was substantial evidence supporting) either of opposite inferences from this record. 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. In deciding that on and after September 2, 1991, Horvitz was physically present in Massachusetts and that he intended to make Massachusetts his home for the time at least (see Hershkoff v. Registrars of Voters of Worcester,
6. Conclusion. The decision of the Appellate Tax Board is
So ordered.
Notes
The commissioner initially assessed $821,381.47 in taxes, interest and penalties. After Horvitz paid but before he applied for the abatement, the commissioner refunded him $88,656.83 in penalties and associated interest.
The parties had entered into a post-nuptial agreement which anticipated the possibility of their separation. The agreement provided in part that “unless there are compelling circumstances to the contrary, the parties will share parental responsibility for their minor children. In the event that the parties separate, the Wife shall serve as the residential parent. At the option of the non-residential parent, that parent shall have reasonable rights of access to the children .... [T]he parties shall consult with each other on all significant decisions involving the- childrenfs] best welfare.”
Linda, with the children, and Horvitz, separately, moved into leased quarters until their respective residences were ready for occupancy.
While the board made no finding on the subject, there was unrebutted testimony that some of those records were transferred in connection with Horvitz’s pending divorce proceedings in Massachusetts.
The board did not attempt to make a finding regarding the amount of time spent by Horvitz in Massachusetts as opposed to Florida or elsewhere. The only evidence with a bearing upon this were visitation schedules apparently prepared as a way of informing Linda in advance when Horvitz would be available to see the children. The schedules reflect planned visitation in Massachusetts on 41 days in November and December of 1991, and on 266 days in 1992. However, there was evidence that the visitation schedules often did not translate into actual visits.
Carol’s son had, in June, 1992, been enrolled in a private school in Canaan, New Hampshire, for which Horvitz paid the tuition expenses.
Contrary to the commissioner’s position, the allocation of burden of proof to the commissioner does not appear to have been a product of the court’s treatment of the case as a petition by a fiduciary for instructions. See id. at 642. Logic hardly compels a conclusion that the act of petitioning for instructions by itself automatically casts the burden of proof upon the adverse party. Rather, the court’s point was that the fact that the trustee commenced the action and sought relief did not of itself require that it shoulder the burden. The burden would be allocated “where general principles of law would naturally and logically cause it to fall.” Ibid.
In a case such as this, there is not in fact a substantial deviation. The taxpayer could not succeed in his petition for an abatement without, as an initial matter, making a prima facie showing of his past non-Massachusetts domicile — in essence, meeting his own burden of production.