A Year in Review: Client Victories Abound -

The past year will be remembered as exciting for many tax, as well as non-tax, reasons. From the tax standpoint, we are happy to report that our clients had many victories. While most victories were achieved without the need to file a challenge in court and, therefore, are not publicly known, a number of successes were public.

In New York, we successfully litigated a combination case in Matter of Astoria Financial Corporation & Affiliates. In that case, the New York City Department of Finance sought to combine Astoria Bank with its investment subsidiary that principally held non-New York mortgage loans. The New York City Tax Appeals Tribunal (“Tribunal”) affirmed the determination of the Chief Administrative Law Judge that held that the subsidiary had a business purpose apart from tax benefits, had economic substance, and conducted its transactions with Astoria Bank at arm’s length. The Tribunal also held that the 2011 New York State Tax Appeals Tribunal decision in Matter of Interaudi Bank, in which the New York State Tax Appeals Tribunal found distortion resulting from a “mismatch of income and related expense” between a bank and its investment subsidiary, was inapplicable because the facts were materially distinguishable.