A New York City Administrative Law Judge held that a taxpayer’s real property transfer tax returns were not false or fraudulent and therefore the Department of Finance could not reopen the closed three-year statute of limitations period for assessment. Matter of Steuben Delshah, LLC (Jan. 9, 2018). The ALJ rejected the Department’s claim that the reporting position taken on the returns – that the transfers were exempt transfers by or to a charitable organization – was itself a basis for finding fraud. The ALJ found that, in order to be fraudulent, the returns must contain a fraudulent misrepresentation or omission of a material fact. Here, the ALJ concluded that the returns substantially complied with the law because they contained the information requested, noting that “[i]t is axiomatic that information cannot be concealed if that information is neither asked for, nor required to be reported.”

Steuben Delshah, LLC was represented by Morrison & Foerster LLP in this matter. Please contact Irwin M. Slomka or Kara M. Kraman with any questions regarding this decision.

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