Hedge fund honcho wins $27 million tax fight with NYC

Billionaire hedge fund manager Julian Robertson won a $27 million tax case after convincing a a judge that he wasn't a resident of New York City in the year 2000 -- and it all came down to four days.

The way the law works is that anyone who spends more than half the year living in New York City is subject to the jurisdiction's taxes -- in 2000, the top tax rate was 3.78%, meaning that Mr. Robertson must have earned around $700 million in the year 2000.

The New York State Department of Taxation and Finance argued that because he couldn't provide proof that he didn't spend more than half the year in New York City, he had to pay the tax. Robertson and his lawyers, family, and his assistants spent countless hours pouring over schedules, calendars, tickets, etc. to convince a judge that he spent less than half the year in NYC proper -- with a good chunk of the rest of his time spent on Long Island.


According (subscription required) to The Wall Street Journal, "At issue was Mr. Robertson's whereabouts on four days during that leap year: April 15, July 23, July 31 and Nov. 16. The other 362 days were accounted for, with documentary proof of 183 days spent in the city and 179 spent outside."

By convincing a judge that those four days were spent outside of the city, Robertson was able to tip the scales to 184 days outside the city and 183 within its limits. . . thereby saving himself $27 million by slumming it on Long Island for one extra night.

I guess the takeaway is this: If you earn a lot of money and want to live in New York City, get a house close by and spend half the year there.

Video: How to Amend Taxes that Are Already Filed

Many people make mistakes when filling out their tax returns, but it's not the end of the world. Watch this video to learn more about amending past tax returns.

Read More

Brought to you by TurboTax.com

Video: TurboTax Is Easy and Accurate Tax Software

When it comes to taxes, TurboTax knows there's nothing more important than getting it right the first time.

Read More

Brought to you by TurboTax.com

Video: Guide to Schedule B: Interest and Dividend Income

Did you earn more than $1,500 in interest or dividend income? Or cash in a U.S. savings bond? You may be able to exclude some of this interest from your 1099-INT form. Watch this video to find out more about Interest and Dividend income.

Read More

Brought to you by TurboTax.com

Video: How To Reduce Errors on Your Tax Return

Did you know that errors on your tax return can affect the amount of your tax bill and the amount of time it takes to get a refund? Fortunately, TurboTax helps you avoid errors AND be sure you're getting all the tax deductions and credits you deserve

Read More

Brought to you by TurboTax.com
Read Full Story