George & Sandra Schussel v. Commissioner of Revenue (March 4, 2013)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


GEORGE & SANDRA SCHUSSEL        v.	 	COMMISSIONER OF REVENUE
 							 		
   
Docket No. C298869				 	Promulgated:
							 	March 4, 2013
	
				   
This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 62C, § 39(c) from the refusal of the appellee, Commissioner of Revenue ("Commissioner"), to grant an abatement of personal income taxes assessed to George and Sandra Schussel ("appellants"), for the calendar years 1993 through 1995 ("tax years at issue").
Commissioner Scharaffa heard this appeal and was joined by Chairman Hammond and Commissioners Rose, Mulhern and Chmielinski in a decision for the appellee.  
The findings of fact and report are made pursuant to requests by the appellants and the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.  

Francis J. DiMento, Esq. and Frank W. Tessitore, Esq. for the appellants.	

Celine E. Jackson, Esq. and Andrew M. Zaikis, Esq. for the appellee.  

FINDINGS OF FACT AND REPORT
On the basis of an Agreed Statement of Facts, a Supplemental Agreed Statement of Facts and the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On May 15, 2007, the Commissioner issued to the appellants a Notice of Failure to File pertaining to income tax returns for the tax years at issue.  On June 19, 2007, the appellants filed a Massachusetts Nonresident Income Tax Return ("Form 1 - NR") for each tax year at issue and they paid the amounts of tax which they reported to be due.  By Notice of Assessment ("NOA") dated June 27, 2007, the Commissioner assessed amounts of interest and penalty for the tax years at issue, based on the amounts shown on the appellants' returns.  The appellants paid those amounts.  However, based on information that subsequently arose from the criminal indictment of George Schussel, the Commissioner made subsequent assessments of additional taxes, interest and penalties by NOA dated August 7, 2007.  That NOA also included double-assessment penalties pursuant to G.L. c. 62C, § 28.  
By Application for Abatement/Amended Return (Form CA-6) filed on February 21, 2008, the appellants sought abatement of the additional taxes, interest and penalties relating to the August 7, 2007 NOA.  On October 10, 2008, the Commissioner issued a Notice of Abatement Determination denying the appellants' abatement request.  On December 8, 2008, the appellants filed a Petition Under Formal Procedure with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction over the instant appeal.   
The appellants were also the subject of a federal tax audit.  Based on information shared by the Internal Revenue Service ("IRS"), specifically the information contained in IRS Letter 692 and Form 4549-A, which were issued on January 20, 2009, subsequent to the filing of this appeal, the Commissioner again adjusted the appellants' taxable incomes to reflect the adjustments made by the IRS.  
On February 25, 2009, the Commissioner inadvertently issued to the appellants a Tax Amnesty Notice.  The Tax Amnesty Notice offered the appellants a waiver of unpaid penalties if they paid the Amnesty Balance Due in full by the deadline of April 30, 2009.  Pursuant to the Tax Amnesty Notice, the appellants made full payment of the outstanding tax liability that was listed on the Tax Amnesty Notice.  According to the Tax Amnesty Notice, the appellants benefitted from an Amnesty Savings of penalties assessed under G.L. c. 62C, § 33.  The appellants, however, contend that they should have been offered amnesty for the double-assessment penalties as well.  
The parties stipulated that the following are the amounts of personal income taxes and double-assessment penalties at issue if the appellants are found to have been Massachusetts residents during the tax years at issue, not including interest:
Tax year	Amount of personal income tax at issue	Double-assessment penalties	
1993	$ 98,871.69	$197,743.37	
1994	$140,111.61	$280,223.22	
1995	$198,841.15	$397,682.29	
TOTAL:	$437,824.45	$875,648.89	

Background information.
George Schussel ("Mr. Schussel") was born as a British citizen in Nice, France in 1941.  He immigrated to the United States at the age of 2, and as a young child, he lived in various places within the United States and Mexico.  After receiving his Bachelor's Degree from the University of California in 1961, Mr. Schussel attended graduate school in Massachusetts at Harvard University, where he earned a Master's Degree and then a Ph.D. in 1966.
Sandra Schussel ("Mrs. Schussel") was born and raised in Lynn, Massachusetts.  She attended the Peter Bent Brigham Hospital nursing school in Boston, Massachusetts and graduated in 1962.  She practiced as a registered nurse at The Children's Hospital in Boston, but after six months, she left and began working for American Airlines as a flight attendant, starting in 1963.  
The appellants met on an airplane in 1964 and married the following year in 1965.  They lived in Cambridge, Massachusetts while George completed his education.  As Mr. Schussel gained employment, the couple subsequently moved, first to southern California, then to Alabama and then to New Jersey.  The appellants' first daughter, Stacey, was born in 1970 in New Jersey.  In her testimony before the Board, Mrs. Schussel explained that, after the birth of their first child, it became more important for them to be near family.  Later that same year, Mr. Schussel secured a job at American Mutual Insurance Company ("American Mutual") in Wakefield, Massachusetts, and the appellants moved back to Massachusetts.  
In 1971, shortly after moving to Massachusetts, the appellants purchased a home at 3 Durham Drive in Lynnfield.  Mr. Schussel testified that Lynnfield was the perfect location for his family for a number of reasons, including: a good school system; proximity to his mother-in-law's Polish community of Salem, Massachusetts; a strong labor pool for his business; and easy access to Logan International Airport in Boston.   
Mr. Schussel testified that he had been "moonlighting" teaching seminars during his employment with American Mutual, and he eventually left American Mutual to pursue this endeavor full-time.  In 1979, Mr. Schussel founded his own company, Digital Consulting, Inc. ("DCI") which he incorporated in Massachusetts.  He originally operated DCI from the basement of the appellants' home in Lynnfield, but he subsequently moved the operation to an office located in Andover, Massachusetts during the tax years at issue.  DCI organized, promoted and conducted trade shows and conferences, which were designed to teach attendees about the latest technology advancements and how to utilize new technologies to solve business and government problems.  DCI held events in major cities in the United States and in foreign countries. 

The appellants' physical presence in Massachusetts.
At the hearing of this appeal, Mr. Schussel testified that during the tax years at issue, he was in Massachusetts on average about 70 days a year, with 95 days a year traveling for business, 80 days a year in Florida and 120 days a year in New Hampshire.  However, at his earlier deposition, Mr. Schussel testified that he was in Massachusetts for about a third of each year, approximately 120 days.  Either way, the evidence did not establish that Mr. Schussel spent at least 183 days in Massachusetts so as to cause him to be treated as a Massachusetts resident.  See G.L. c. 62, § 1(f).  Therefore, the question of the appellants' residency turned on whether he was domiciled in Massachusetts during the tax years at issue, based on the facts and circumstances.

The appellants' family relationships. 
The appellants both testified that a major turning point in their lives occurred in 1979, when Mrs. Schussel's father passed away.  Mr. Schussel testified that, after this event, his mother-in-law, Harriet Kudzi ("Mrs. Kudzi"), "wanted to live with us and did better living with us than by herself," and Mrs. Schussel likewise testified that "living on her own would have been really tough."  Mr. Schussel also testified that at about the same time, Mrs. Schussel decided that the appellants should have a nicer, more spacious home in Lynnfield.  Mrs. Kudzi sold her home, contributed her life's savings to the appellants, and the appellants built a house at 5 Kimberly Terrace in Lynnfield.  The home at Kimberly Terrace was completed in 1980 and the appellants and their two young daughters, Stacey and Jennifer, together with Mrs. Kudzi, moved into the home.  Mr. Schussel testified that Mrs. Kudzi took care of the appellants' children while Mrs. Schussel helped him build the business of DCI.  Mrs. Kudzi continued to live at the Kimberly Terrace home during the tax years at issue and until her death in 2010.  Mr. Schussel testified consistently that the appellants "took care of [Mrs. Kudzi] for the rest of her life."
In her testimony, however, Mrs. Schussel attempted to create distance between herself and her mother.  She testified that, once her daughters were out of the house, she began spending more time in New Hampshire, "just because it was more comfortable for my mother and it was more comfortable for me, and it was more comfortable for George."  The appellants thus portrayed Mrs. Kudzi as living alone in the Lynnfield home, claiming that she was self-sufficient and that it was Mr. Schussel who would check in on her, generally on Tuesday evenings after work.  However, there were inconsistencies in their testimonies, as Mrs. Schussel later admitted that she would also stay with her mother, particularly when she needed to take her to a doctor's appointment as "she was getting older."  Moreover, a sentencing memorandum submitted to the United States District Court for the District of Massachusetts, regarding Mr. Schussel's 2007 criminal conviction for federal tax evasion, contains this statement from Mrs. Kudzi:  "I have lived with George and Sandy, my daughter, for 28 years, having moved into their home shortly after being widowed.  How many son-in-laws would willingly, happily, take their mother-in-law into their own homes to share their living room, kitchen, and life with for several decades."  
Mrs. Schussel testified that Mrs. Kudzi did not often venture up to New Hampshire.  She explained that her mother did not like to visit there in part because Mrs. Kudzi "was a person that liked to stay put," but also because New Hampshire harbored many sad memories for Mrs. Kudzi, particularly regarding Mrs. Kudzi's deceased husband.
  The appellants' two daughters, Stacey Schussel Griffin and Jennifer Schussel Storer, both attended Lynnfield schools, including Lynnfield High School, from which they graduated in 1987 and 1990, respectively.  Stacey and Jennifer both attended college and graduate school in Massachusetts.  Stacey Schussel Griffin was married in 1991 and during the tax years at issue, she lived with her husband in a home in Lynnfield.  The appellants had assisted Stacey and her husband in purchasing their Lynnfield home.  Stacey testified at the hearing of this appeal that she never possessed a New Hampshire driver's license.  
Jennifer Schussel Storer lived on a college campus in Massachusetts until her graduation in 1994.  Upon graduation, she taught for a year at a school in Mount Hermon, Massachusetts, and she then moved back to her parent's Lynnfield home.  In 1996, Jennifer and her husband purchased the home that was then owned by Stacey and her husband, with financial assistance from the appellants.
During the tax years at issue, Mr. Schussel's mother and brother (until 1994 when he passed away) lived in France.  Mrs. Schussel's family members were settled on the "North Shore," in Lynn and Salem, during the tax years at issue, and none of the appellants' family members lived in New Hampshire.

The appellants' Lynnfield home and other Massachusetts properties.

During the tax years at issue, the appellants continued to own and occupy their family home on Kimberly Terrace in Lynnfield.  The home originally had four bedrooms.  During the tax years at issue, Stacey was married and lived with her husband in their home.  Jennifer finished college, then lived and worked in Mount Hermon, Massachusetts, came back to live briefly at Kimberly Terrace, and then she left home to live with her new husband.  Since the two daughters were no longer living at the appellants' home, the appellants had their two bedrooms combined into a larger bedroom for Mrs. Schussel's mother, Mrs. Kudzi.  During the tax years at issue, the assessed value of the Kimberly Terrace property was $346,820.00.  
The appellants also owned other Massachusetts properties during the tax years at issue.  The appellants owned Lot 2AA, Hillside Road in North Andover, which they had purchased in 1986.  The appellants also possessed an ownership interest in the Marland Mill Building, a 30,000 square foot mill located at 204 Andover Street in Andover, which served as the offices of DCI, through their wholly-owned corporation, Jellicle Investors, Inc. ("Jellicle"), a New Hampshire corporation registered to do business in Massachusetts, of which the appellants were the sole owners.

The appellants' New Hampshire properties. 
Mrs. Schussel testified that, during the early days of their marriage, she knew that her husband had been looking for employment opportunities in California and seemed to be putting more effort into the resumes and cover letters sent to the California prospects than to those in Massachusetts.  Mrs. Schussel testified that she believed that introducing Mr. Schussel to the beauties of New Hampshire's great outdoors would be her only chance of keeping him in the New England area.  Therefore, she surreptitiously planned the purchase of a recreation home in New Hampshire by bringing her husband on a weekend trip to visit some friends who had a camp there.  Both appellants were passionate about outdoor recreational activities, including boating, skiing, hiking and motorcycling.  Mrs. Schussel's plan worked, and as Mr. Schussel testified, he "fell in love" with New Hampshire. During 1974, while the appellants were living on Durham Drive in Lynnfield, they purchased what Mr. Schussel called a "recreation property," a small cabin in Meredith, New Hampshire with about 100 feet of frontage on Lake Winnipesaukee.  Mr. Schussel testified that during his years spent working at American Mutual, he considered the New Hampshire home to be a "vacation venue" for the family, where he and his family would spend weekends, vacations and holidays, engaging in the sorts of outdoor recreational activities that they loved.    
Over time, however, Mr. Schussel became more interested in purchasing "investment" property.  In 1977, he discovered an opportunity to purchase 125 acres with almost two miles of frontage on Lake Winnipesaukee.  Despite a disagreement with his wife over the purchase, Mr. Schussel purchased 102 acres of this property in 1977.  He explained that once Mrs. Schussel agreed and signed on to the joint tenancy, the appellants began to develop the property, raising money for the construction by selling off about seven acres of the property.  
The appellants began construction on what became their New Hampshire residence in 1979, and the house was ready for the appellants to occupy by 1980.  Mrs. Schussel testified that a "new wing" was also constructed for the house sometime during the tax years at issue.  The Meredith, New Hampshire residence was a six-bedroom, six-bathroom dwelling, spacious enough to accommodate large family gatherings and able to comfortably house the appellants and their two daughters and their families during holidays and other family gatherings.  During the tax years at issue, the family continued to spend their recreation time at the Meredith residence, including weekends, holidays and vacations.  Mr. Schussel also testified, however, that while their Meredith residence was winterized, they nonetheless closed portions of it for winter by draining water from all but the first floor bedrooms, the laundry room, kitchen and living area, stating, "[w]e shut down portions of it for sure."  
Mr. Schussel explained that the appellants noticed that, while their New Hampshire home was beautiful and modern, their Durham Drive home in Lynnfield was not.  He testified that the development of a spacious vacation home was at least part of the appellants' motivation to purchase "something a little nicer" in Lynnfield, and this decision happened to coincide with the death of Mrs. Schussel's father and the decision to have Mrs. Kudzi move in with the appellants.
In addition to the Meredith residence, the appellants also purchased investment property in Meredith, New Hampshire on Powers Road, which they subsequently sold for a profit, and additional properties that they called "conservation" properties, consisting mainly of wetlands.  Mr. Schussel explained that the appellants entered into an agreement with the state of New Hampshire not to develop the land and, in return, they obtained a lower property tax rate for that property.
The appellants enjoyed many recreational activities at their Meredith residence, as indicated by their registration of recreational vehicles there, including a Porsche convertible, two Honda three-wheel OHRVs, two Ford Ranger trucks, motorcycles, and boats.  Mr. Schussel testified that the appellants also spent their holidays in New Hampshire, and that they hosted two wedding receptions at the home, one in 1986 for the daughter of Mrs. Schussel's cousin and one in 1991 for their daughter, Stacey.  In 1996, their daughter, Jennifer, had her wedding reception at another residence owned by the appellants, located in Key West, Florida.

The appellants' business ties. 
Starting at or near its inception in 1980, Mrs. Schussel helped Mr. Schussel run DCI.  Mrs. Schussel testified that she never received a salary from DCI, but from the beginning, in addition to running DCI with Mr. Schussel, Mrs. Schussel travelled with him to some of the DCI events.  While Mrs. Schussel was traveling or otherwise away from home working for DCI, Mrs. Schussel's mother, who was living with the family, took care of the appellants' two daughters in the Lynnfield home.  After the daughters matured and graduated college, Stacey took a job at DCI where she met her husband, who was also an employee of DCI.  Stacey's duties included editing a DCI newsletter known as The Downsizing Journal, and Mrs. Schussel assisted her with this task.  Mrs. Schussel testified that during the tax years at issue, she often traveled extensively for DCI, but that she came to the DCI offices in Andover to work with Stacey on The Downsizing Journal.
Mrs. Schussel testified that, in her mind, a shift in domicile occurred for her on September 21, 1992 when Mr. Schussel appointed a fellow DCI executive, Ron Gomes, to replace him as president of DCI and Mr. Schussel became the Chairman.  Mr. Schussel testified that in his capacity as Chairman, he chaired two annual events held by DCI, conducted research in Silicon Valley in California, traveled around the world with his database work, and published The Downsizing Journal.  Mr. Schussel attempted to portray himself as the absent figurehead, offering into evidence a copy of a portrait of himself, given to him as a gift that hung in his DCI office, which included the caption:  "Our father who art in New Hampshire."  However, by all accounts, even after his appointment as Chairman, Mr. Schussel was very dedicated and spent a great deal of time building his self-made business.  When asked how many days he spent in Massachusetts, Mr. Schussel testified: "If I was in the State of Massachusetts, I was probably in the office.  That would include weekends.  For me, seven days is seven days.  It isn't like Sunday is a day of rest or Saturday is the Sabbath."  Mrs. Schussel's testimony corroborated Mr. Schussel's dedicated work ethic and his tendency to come to the Andover office, even when he was traveling extensively:  "Seriously, he works.  He went back and forth [to the Massachusetts office] a lot."  
Mr. Schussel testified that during the tax years at issue, he was traveling for business extensively during the year, but he reduced his travel in the summers so as to spend time in New Hampshire.  He testified that Mrs. Schussel was living full-time in New Hampshire in the summer, and typically he would be the one to check in on Mrs. Kudzi at the Lynnfield home, spend Tuesday night there, work a half-day at the Andover office the next day and then return to New Hampshire by early Wednesday afternoon.  When asked if she checked in on her aging mother, Mrs. Schussel testified that, during the summer, she would come to Lynnfield once a week, but not every week, to check in on Mrs. Kudzi, "to make sure that she had any doctor's plans or anything like that at those times when I would come down," and also to help her daughter, Stacey, with The Downsizing Journal.
In addition, appellants were the sole owners of Jellicle, a corporation that owned the Andover property occupied by DCI and received rental income from DCI in each of the tax years at issue.

The appellants' friendships and social lives.
Mr. Schussel testified that the appellants entertained in New Hampshire but not in Massachusetts, and that they engaged in various recreation activities in New Hampshire.  By contrast, Mr. Schussel explained that Massachusetts was "where I work, it's my office."  Mr. Schussel further testified that the appellants had social friends only in New Hampshire, including the Billingses, the Smiths, Chuck Thorndike, the Currans, the Melansons, the Versards, and the Reisters.  Mr. Schussel admitted, however, that the Reisters were actually from Lynnfield and that Mrs. Schussel knew John Curran from their childhood upbringing in Lynn, Massachusetts; Mr. Schussel also admitted that the Melansons were friends from Lynnfield but he characterized their friendship as hosting weekend visits for them at their Meredith, New Hampshire residence or "meet[ing] them for dinner somewhere in the lakes region."  The appellants did not call any of their friends to testify at the hearing of this appeal.    

The appellants' miscellaneous connections.
Mr. Schussel testified that, after the completion of the New Hampshire home in 1980, he went into the Meredith Town Hall and "declared myself a New Hampshire resident and always thought of myself that way."  Mrs. Schussel testified, however, that their decision was made much later, when Mr. Schussel appointed Ron Gomes to be president of DCI towards the end of 1992.  She later testified vaguely, however, that their change in domicile was "a very fluid decision." 
During the tax years at issue, both appellants were registered to vote in Lynnfield.  At the hearing of this appeal, Mr. Schussel acknowledged, when reminded of his deposition testimony, that he had been present in Massachusetts "at least once" during the tax years at issue to vote in an election.  Mrs. Schussel testified that she was not registered to vote in New Hampshire during the tax years at issue. 
On October 24, 1994, Mr. Schussel made a $500.00 contribution to the Romney for US Senate Committee.  He listed his address on the contribution as Kimberly Terrace in Lynnfield.  When asked at the hearing why he used his Massachusetts address, Mr. Schussel testified that Mr. Romney had paid a visit to DCI's Andover office, representing Bain Capital, at which time Mr. Schussel made the contribution.  
During the tax years at issue, both appellants maintained and renewed their Massachusetts driver's licenses; Mr. Schussel renewed his on January 20, 1994 and Mrs. Schussel renewed hers on June 22, 1994.  Mr. Schussel was also issued a New Hampshire driver's license on October 27, 1994.  Mrs. Schussel never obtained a New Hampshire driver's license during the tax years at issue, nor did either of the appellants' daughters, Stacey or Jennifer.  Also during the tax years at issue, both of the appellants' frequently used vehicles, namely the Volkswagen and the Audi, were registered in Massachusetts.  
Also during the tax years at issue, the appellants maintained two bank accounts, one at Fidelity Investment in Boston and one at the Wakefield Co-operative Bank in Wakefield, Massachusetts.  When asked at the hearing why the appellants continued to maintain these Massachusetts-based bank accounts, Mr. Schussel testified that he did not actively bank at the Wakefield bank.  At any rate, he testified that, in his opinion, "banking is global," particularly with the ability to write checks and receive money from a national automatic teller machine, and therefore, he did not see the need to open and transfer his funds to a New Hampshire-based bank.    
	Finally, Mr. Schussel testified that the appellants had chosen their burial plot to be on the grounds of their New Hampshire home, but he did not testify when they had made this decision. The appellants also entered into evidence a photocopied photograph of a large wooden trellis, which Mrs. Schussel explained was a replica of one that had been built by her grandfather and erected at her grandparents' home in New Hampshire.  She explained that this replica trellis had been a gift from the DCI employees, including her daughter, Stacey, on the occasion of her fiftieth birthday and that she had chosen to have it installed at the appellants' New Hampshire home.  

The appellants' tax filings and Mr. Schussel's criminal conviction for federal tax evasion.

On February 26, 2004, Mr. Schussel was indicted in the United States District Court, District of Massachusetts, on one count of conspiracy and two counts of tax evasion.  The conspiracy charge related to Mr. Schussel's activities between January, 1988 and May, 1998, thus including the tax years at issue.  On January 25, 2007, Mr. Schussel was found guilty on all three counts, which related to his activities at DCI and to his filings of personal income tax returns.  In particular, Mr. Schussel was found guilty of filing a false and fraudulent United States Individual Income Tax Return for tax year 1995 with the IRS.  On his 1995 federal tax return, Mr. Schussel reported taxable income of $1,030,785.00, when in fact his taxable income was found to be $3,341,868.00.  Mr. Schussel served a prison sentence and was released from custody on supervised release, managed by the Federal Probation Office in Massachusetts.
According to the Commissioner's records, the appellants did not file any personal income tax returns with Massachusetts from calendar year 1989 forward, until the Commissioner issued the Notice for Failure to File on May 15, 2007.  The appellants then filed their Massachusetts returns for the tax years at issue with the Commissioner on June 19, 2007, after Mr. Schussel was found guilty of tax fraud.  The appellants filed returns that reported income amounts that included the 1995 amount which the United States District Court had found to be fraudulent, with a total under-reported amount of $5,558,736.00 for the three tax years at issue.  The Commissioner applied the double-assessment, immediate assessment and jeopardy assessment provisions of G.L. c. 62C, §§ 28, 26(d) and 29 against the appellants on January 20, 2009.

The Board's ultimate findings of fact for domicile.
The Board found that the appellants were not credible witnesses.  The appellants offered inconsistent and contradictory testimony concerning their contact with their Lynnfield home and with Mrs. Schussel's mother, Mrs. Kudzi.  On the one hand, they stated that Mrs. Kudzi was independent and they attempted to portray a somewhat tense relationship between Mrs. Schussel and her mother as the reason why it was just "more comfortable" for the appellants to live in New Hampshire and to
leave the Lynnfield home for Mrs. Kudzi.  However, they both unequivocally stated that Mrs. Kudzi did not want to live alone after being widowed, that she gave her entire life's savings to the appellants with the understanding that they would provide a home for her with them in Lynnfield, and that living on her own "wouldn't have been a good situation."  More to the point, their portrayal of their relationship with Mrs. Kudzi changed depending on the forum: in the sentencing memorandum for Mr. Schussel's federal criminal conviction, the appellants readily portrayed themselves as devoted to Mrs. Kudzi, whom they characterized as getting along in years and requiring doctors' appointments, but in these proceedings they contended that Mrs. Kudzi was able to live on her own, aside from brief check-ins from her son-in-law.  Moreover, the testimony as to how frequently Mrs. Schussel looked in on her mother was vague and contradictory; at one point, she testified that she checked in weekly, but then retracted and claimed to have left the check-ins for her husband.  
With respect to Mr. Schussel's supposed declaration of domicile in 1980 at the Town Hall in Meredith, New Hampshire, the Board found that testimony to be vague and unsubstantiated, as Mr. Schussel did not explain what he actually did to sever domicile in Massachusetts and to create a new domicile in New Hampshire, particularly while he was still enrolling his children in Lynnfield public schools at that time.
Further, appellants' testimony concerning their lack of personal ties to Massachusetts lacked credibility. The appellants had strong family ties in Lynnfield, including not only Mrs. Kudzi but also both of their daughters and their respective families.  Moreover, appellants' testimony that they only socialized with the Reisters and Melansons, who were also from Lynnfield, exclusively in New Hampshire lacked credibility and was not substantiated.  
Mr. Schussel's conviction for federal tax evasion, together with the fact that the appellants failed to file any Massachusetts returns, despite working in Andover for a Massachusetts company, until they received the Notice of Failure to File, seriously undercut his credibility.  Moreover, when they did file returns subsequent to that notice, the appellants reported only those amounts that were later found by the federal court to be a gross understatement of their actual taxable income.  
A comparison of the appellants' Massachusetts and New Hampshire ties reveals that the center of the appellants' domestic, social, civic and business lives was in Massachusetts.  On the New Hampshire side, the appellants spent much of their recreation time in New Hampshire, which offered the appellants the sort of outdoor activities that they enjoyed.  The New Hampshire home was also a six-bedroom, six-bathroom residence, as compared with their Kimberly Terrace home, which originally had four bedrooms, two of which were used as offices and two of which were then converted to one large bedroom for Mrs. Kudzi once the appellants' daughters moved to college and left home to get married.  The Board found, however, that the New Hampshire residence was built with the intention that it be able to accommodate large family visits that included their daughters and their respective families so that the entire family could be together during the holidays and for other gatherings.  Although it functioned as a family retreat, the appellants failed to show that it was intended to be, or was in fact, a permanent residence or the center of their personal and business ties.  In fact, as Mr. Schussel testified, part of the residence was shut down during the winter months. 
On the Massachusetts side, the appellants had strong business ties to Massachusetts, particularly DCI, to which Mr. Schussel was, by all accounts, very devoted "seven days" a week.  While Mr. Schussel attempted to portray himself as the absent figurehead "who art in New Hampshire," the Board instead found that he was closely involved with this business during the tax years at issue.  Even after the appointment of Ron Gomes as DCI President, the Board found that Mr. Schussel remained intimately involved in the operation of DCI's business.  Additionally, the appellants received income from their wholly owned corporation, Jellicle, which was registered to do business in Massachusetts and which received payments from DCI on its rental of the Andover property from which DCI operated. 
The appellants also had other connections to Massachusetts.  The appellants retained and renewed their Massachusetts driver's licenses during the tax years at issue and Mrs. Schussel never even obtained a New Hampshire driver's license, despite her claim that she was living full-time in New Hampshire during the summer, to the point that she hardly checked in on her mother but was leaving this task to her husband.  The appellants did not register to vote in New Hampshire and instead voted in Massachusetts at least once during the tax years at issue.  Moreover, the appellants registered their Volkswagen and Audi, their frequently used, as opposed to recreational, vehicles in Massachusetts.  Mr. Schussel also made a campaign contribution to a Massachusetts senatorial candidate using his personal Lynnfield address for the contribution.  The appellants also had social ties to Massachusetts, including friendships with at least two couples who also lived in Lynnfield.    
Finally, during the tax years at issue, the appellants had very strong family ties to Massachusetts, namely their two daughters, who were living in Lynnfield in homes that the appellants helped to purchase, as well as an elderly mother who was living in their home in Lynnfield and who did not want to live alone and did not do well living alone.  The appellants cannot credibly argue that their care and devotion to Mrs. Kudzi was a notable factor in their lives when convenient in Mr.  Schussel's sentencing memorandum in federal court, and then relegate their care of her to merely "checking in" from time-to-time when convenient for their domicile appeal.  Therefore, the Board found that, while the appellants enjoyed leisure and holiday time in New Hampshire, the appellants' strong business and familial ties kept them rooted in Massachusetts during the tax years at issue.
Accordingly, the Board found and ruled that the appellants were domiciled in Massachusetts during the tax years at issue and therefore were not entitled to an abatement of the taxes at issue in this appeal.  

The Commissioner's assessment of double-assessment penalties.

The appellants contended that they did not knowingly file false or fraudulent returns, but instead had a good faith basis for believing that they had changed their domicile to New Hampshire during the tax years at issue.  However, the appellants did not file Massachusetts non-resident returns until receiving a notice of failure to file, even though they had income from Massachusetts business, and they did not file New Hampshire interest/dividend returns, even though they had earned intangible income amounts exceeding $4,800, which would be taxable in New Hampshire if, as appellants claimed, they were New Hampshire residents.  Moreover, Mr. Schussel was convicted of federal tax fraud in part for his filing of fraudulent federal returns, and the appellants used these same fraudulent amounts to file their late-filed Massachusetts returns.  The Board thus found that the appellants' failure to file Massachusetts returns and their gross underreporting of their taxable income on their late-filed returns amounted to more than a mere act of negligence and instead constituted, at a minimum, reckless indifference to the obligation to file accurate taxes.  Therefore, to the extent that it is a finding of fact, the Board found that the appellants knowingly filed false or fraudulent Massachusetts returns for the tax years at issue.

The Tax Amnesty Program.
A two-month Amnesty Program was established pursuant to Chapter 461 of the Acts of 2008 ("Chapter 461").  The Amnesty Program ended on June 30, 2009 and applied to individuals with existing personal income tax liabilities from tax years or periods ending on or before December 31, 2007.  Under the parameters of the Amnesty Program established under Chapter 461, if a taxpayer was notified by the Commissioner that he or she was eligible and the taxpayer paid the full amount of tax and interest due for any period as shown on the Tax Amnesty Notice, the Commissioner was authorized to waive all unpaid penalties, including those imposed for failure to timely file a return, failure to file a proper return, and failure to timely pay a tax liability. Chapter 461, however, contained a specific limitation: "The commissioner's authority to waive penalties during the amnesty period shall not apply to any taxpayer who, before the start date of the amnesty program selected by the commissioner, was the subject of a tax-related criminal investigation or prosecution."  
On February 25, 2009, the Commissioner issued a Tax Amnesty Notice to the appellants, despite the January 25, 2007 criminal conviction of Mr. Schussel.  The Tax Amnesty Notice indicated that if the appellants paid the "Amnesty Balance Due" listed by a certain date, the Commissioner would waive the unpaid penalties, identified on the Tax Amnesty Notice as the "Amnesty Savings."  This Amnesty Savings did not include the double assessment amount imposed under G.L. c. 62C, § 28. The appellants made payment in full pursuant to the Tax Amnesty Notice and enjoyed a savings of penalties assessed under G.L. c. 62C, § 33. 
To the extent that it is a finding of fact, and as will be discussed more fully in the following Opinion, the Board found that the appellants were not entitled to abatement of the double-assessment penalties pursuant to the Tax Amnesty Program.

The seven-year look-back period.
The Board found that the appellants' ownership of and employment by a Massachusetts business gave them reasonable cause to know that they had a filing responsibility for Massachusetts, irrespective of whether they were domiciled in Massachusetts.  Moreover, the appellants' use on their Massachusetts returns of income amounts determined to be fraudulent in Federal court, evidenced a willful neglect to file returns, if not a willful failure to file returns with the intent to avoid taxes.  Therefore, to the extent that it is a finding of fact, the Board found that the Commissioner was not bound by the seven-year look-back established by the Commissioner pursuant to Technical Information Release 01-8 ("TIR 01-8").
For the reasons stated in these Findings, and as will be further explained in the following Opinion, the Board found that the Commissioner properly assessed the taxes and penalties at issue in these appeals.  Accordingly, the Board issued a decision for the appellee in this appeal.
OPINION
The appellants were Massachusetts residents for tax purposes  during the tax years at issue.

Under G.L. c. 62 § 2, Massachusetts residents are taxed, with certain limitations not relevant here, on all of their income from whatever sources derived.  In contrast, Massachusetts taxes non-residents only on income from Massachusetts sources.  See G.L. c. 62, § 5A.  A "resident" for Massachusetts tax purposes is defined as:
(1) any natural person domiciled in the Commonwealth, or (2) any natural person who is not domiciled in the commonwealth but who maintains a permanent place of abode in the commonwealth and spends in the aggregate more than one hundred eighty-three days of the taxable year in the commonwealth, including days spent partially in and partially out of the commonwealth.

G.L. c. 62, § 1(f).  The main issue presented in this appeal is whether the appellants met their burden of proving that they had changed their domicile from Massachusetts to New Hampshire before the tax years at issue.  
Domicile has been defined as "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."  McMahon v. McMahon, 31 Mass. App. Ct. 504, 505 (1991). A person's domicile is primarily a question of fact, but the elements to be considered in locating a domicile present a question of law.  Reiersen v. Commissioner of Revenue, 26 Mass. App. Ct. 124, 124-25 (1988).  While domicile may be a difficult concept to define precisely, the hallmark of domicile is that it is "'the place where a person dwells and which is the center of his domestic, social and civil life.'" Id. at 125 (quoting Restatement (Second) of Conflict of Laws § 12 (1969)).   When a taxpayer has multiple residences, the Board must weigh the evidence and determine where it is that the taxpayer has his "home," that is, the center of the taxpayer's major life interests.  See id.   Having more than one residence can lead to factors on more than one side of the "domicile ledger."  Id. at 127.  Therefore, a determination of domicile depends upon a comprehensive facts-and-circumstances analysis. See, e.g, Roarke v. Hanchett, 240 Mass. 557, 561 (1922) (finding that proof of domicile "depends upon no one fact or combination of circumstances, but from the whole taken together it must be determined in each particular case.").  
"A change of domicile occurs when a person with capacity to change his domicile is physically present in a place and intends to make that place his home for the time at least; the fact and intent must concur."  Reiersen, 26 Mass. App. Ct. at 125 (citing Hershkoff v. Board of Registered Voters of Worcester, 366 Mass. 570, 577 (1974)).  Moreover, "[i]t is a general rule that the burden of showing a change of domicile is upon the party asserting the change."   Mellon Nat'l Bank & Trust Co. v. Comm'r of Corporations and Taxation, 327 Mass. 631, 638 (1951); Horvitz v. Commissioner of Revenue, 51 Mass. App. Ct. 386, 394 (2001).  See also Commonwealth v. Davis, 284 Mass. 41, 49 (1933) ("The burden of proof that his domicile was changed rested on the defendant because he is the one who asserted that such change had taken place.").
In the instant appeal, the appellants' "considerable financial resources" enabled them to establish residences for themselves in Massachusetts as well as in New Hampshire and in Florida "in each of which [they] carried on important parts of [their] lives."  Horvitz v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2002-252, 256, aff'd, 60 Mass. App. Ct. 1103 (2002).  However, because only one of those locations can be the appellants' domicile for purposes of taxation, the Board must weigh the evidence and determine whether the appellants had actually abandoned their Massachusetts domicile in favor of a new domicile in New Hampshire during the tax years at issue.  
Massachusetts follows the common law rule that a person with legal capacity is considered to have changed his or her domicile by satisfying two elements: the establishment of physical residence in a different state and the intent to remain at the new residence permanently or indefinitely.  McMahon, 31 Mass. App. Ct. at 505.  "The determination of intent goes beyond merely accepting the taxpayer's expression of intent and instead requires an analysis of the facts closely connected to the taxpayer's major life interests, including family and social relations, business connections, and civic and religious activities in order to determine his true intent."  Swartz v. Commissioner, Mass. ATB Findings of Fact and Reports 2010-252, 268 (citing Reiersen, 26 Mass. App. Ct. at 125 (citing Hershkoff, 366 Mass. at 576-577)).  "A man cannot elect to make one place his home for the general purpose of life, and another place his home for the purpose of taxation."  Davis, 284 Mass. at 50. 
The Board found that the testimony of both appellants lacked credibility.  They offered contradictory testimony regarding Mr. Schussel's presence at DCI and the attention each paid to Mrs. Kudzi.  The Board thus found and ruled that the appellants' overall testimony lacked credibility.  The Board also considered, for purposes of weighing Mr. Schussel's credibility in this state tax appeal, the federal and state tax return filing history of both appellants and Mr. Schussel's federal tax fraud conviction on January 25, 2007.  See Commonwealth v. Harris, 443 Mass. 714, 720 (2005) ("ʽOne who has been convicted of crime is presumed to be less worthy of belief than one who has not been so convicted.'")(quoting Brillante v. R.W. Granger & Sons, 55 Mass. App. Ct. 542, 545 (2002)) (other citations omitted).  
The Board found that the appellants had strong personal ties to Massachusetts.  The appellants' two children, with whom they were close, lived in Lynnfield, in homes purchased during the tax years at issue with financial assistance from the appellants.  Neither of their daughters ever obtained a New Hampshire driver's license.  Moreover, Mrs. Kudzi -- who, in a sentencing memorandum before a federal court, praised Mr. Schussel for taking her into his home -- resided in Lynnfield, in a home that the appellants built with the help of her life's savings because she did not want to live alone and because both appellants understood that it "wouldn't have been a good situation" to leave her alone.  The Board found that the appellants' testimony as to their contact with Mrs. Kudzi and their Lynnfield home was inconsistent and contradictory.  The Board also found that the appellants had established friendships in Massachusetts, particularly with two couples from Lynnfield. 
The Board further found that the appellants had strong business ties to Massachusetts, particularly their involvement in DCI, to which Mr. Schussel was, according to his wife, devoted "seven days a week."  While Mr. Schussel attempted to portray himself as an absent figurehead at DCI, the Board found that he was directly involved in his business.  The appellants' ownership of Jellicle, a corporation registered to do business in Massachusetts and which owned the Andover property from which DCI operated, constituted an additional strong business tie to Massachusetts.
Other ties on the Massachusetts side of the "domicil ledger" include the appellants' retention and renewal, during the tax years at issue, of their Massachusetts drivers' licenses.  In fact, Mrs. Schussel never obtained a New Hampshire driver's license, nor did either of their children, who attended school in Massachusetts and/or worked in Massachusetts during the tax years at issue.  Moreover, while the appellants registered their recreational vehicles in New Hampshire, they registered their commonly used vehicles in Massachusetts.  Neither appellant ever voted in New Hampshire, and Mrs. Schussel even admitted that she never bothered to register to vote in New Hampshire, while Mr. Schussel admitted that he voted at least once in Massachusetts during the tax years at issue.  Furthermore, while the appellants' New Hampshire home featured Mrs. Schussel's trellis and was spacious enough to host large family gatherings, Mr. Schussel admitted to closing down portions of the home for the winter.  Mr. Schussel also demonstrated interest in the outcome of Massachusetts political contests by  making a contribution to a Massachusetts senatorial candidate in 1994 using his Lynnfield address.   The Board found that all of these facts stacked up on the Massachusetts side of the "domicile ledger," and thus weighed against the appellants' meeting their burden of proving that New Hampshire had become the new center of their domestic, family, social and civic life.  Moreover, despite claiming to be New Hampshire residents, the appellants never filed any interest/dividend returns with New Hampshire to account for their earnings of dividend income above the reporting threshold. 
"It is a general rule that the burden of showing a change of domicile is upon the party asserting the change."  Mellon Nat'l Bank, 327 Mass. at 638.  In addition, the burden of proof is on the taxpayers to prove that they are entitled to abatement.  See, e.g., William Rodman & Sons, Inc. v. State Tax Commission, 373 Mass. 606, 610 (1977); Stone v. State Tax Commission, 363 Mass. 64, 65-66 (1973); Commissioner of Corp. & Tax. v. Filoon, 310 Mass. 374, 376 (1941); Staples v. Commissioner of Corp. & Tax, 305 Mass. 20, 26 (1940).  In the instant appeal, the Board found and ruled that the appellants failed to meet their burden of proving that they had abandoned their Massachusetts domicile in favor of a domicile in New Hampshire during the tax years at issue.  Therefore, the Board found and ruled that the appellants were Massachusetts residents for tax purposes during the tax years at issue.

The Commissioner was within her discretion to apply the double assessment, immediate assessment and jeopardy provisions. 

The appellants challenged the Commissioner's application of three provisions in her assessment of them.  First, G.L. c. 62C, § 28 provides that:
If a person who has been notified by the commissioner that he has failed to file a return or has filed an incorrect or insufficient return refuses or neglects within thirty days after the date of such notification to file a proper return, or if a person has filed a false or fraudulent return or has filed a return with a willful attempt in any manner to defeat or evade the tax, the commissioner may determine the tax due, according to his best information and belief, and may assess the same at not more than double the amount so determined, which additional tax shall be in addition to the other penalties provided by this chapter.

(emphasis added).   Second, G.L. c. 62C, § 26(d) provides that, "[i]n the case of a false or fraudulent return filed with the intent to evade a tax or of a failure to file a return, the commissioner may make an assessment at any time, without giving notice of his intention to assess, determining the tax due according to his best information and belief." (emphasis added).  Finally, G.L. c. 62C, § 29 provides that:


If the Commissioner believes that the collection of any tax will be jeopardized by delay, he shall, whether or not the time otherwise prescribed by law for making return and paying such tax has expired, immediately assess such tax together with all interest and penalties, as provided by law.  Such tax, penalties and interest shall thereupon become immediately due and payable, and immediate notice and demand shall be made by the commissioner for the payment thereof.  Upon failure or refusal to pay such tax, penalty and interest, the commissioner shall proceed forthwith to the collection thereof.

(emphasis added).  
The appellants contended that none of these provisions should have been applied to them, because they did not knowingly file false or fraudulent returns.  Rather, they contended, they had a good faith basis for believing that they had changed their domicile to New Hampshire and were domiciled there during the tax years at issue.  They argued that imposition of these provisions requires an intentional wrong-doing by the taxpayer with the specific purpose of evading a tax that he knew or believed was owed.  See Stolzfus v. U.S., 398 F.2d 1002 (3rd Cir. 1968).  
In an earlier appeal before the Board, Scagel v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1990-311, the Board found that the taxpayer had a good-faith basis for filing a joint nonresident return when he had disclosed all relevant facts related to his domicile to his accountant and then relied upon the accountant's advice in filing the nonresident returns.  Id. at 319-20.  In contrast with Scagel is Peter Ruggiero, Inc. v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1995-162.  In that appeal, a taxpayer filed monthly sales tax returns showing no taxable sales had been made and showing zero tax liability due.  The Board found that the appellant knew that the returns were inaccurate yet never followed through by seeking professional assistance nor filed amended returns or paid over the collected taxes to the Commissioner.  Id. at 166.  The Board found that "the appellant's conduct amounted to either an intent to evade taxes, or at least a reckless indifference to its tax-paying and reporting responsibilities which the board regards as tantamount to an intent to evade taxes."  Id.  
In the instant appeal, the Board found that the appellants' intent to evade taxes was evident from the fact that, despite working in Massachusetts for a Massachusetts company, the appellants failed to file any Massachusetts income tax returns, not even nonresident returns, from 1988 until June of 2007, when the appellants finally, upon receipt of the Failure to File Notice, filed returns for the tax years at issue.  When they did file their Massachusetts returns, the appellants first reported income amounts that were determined to be fraudulent in federal court and grossly under-reported the true amount of total income earned by over $5,500,000.00.  The Board thus found and ruled that the appellants' failure to file returns and gross underreporting of income earned amounted to more than a mere act of negligence as in Scagel and instead amounted to a reckless indifference to the obligation to file accurate taxes which constituted intent to evade taxes as the Board found in Ruggiero.  Therefore, the Board found and ruled that the appellants knowingly filed false or fraudulent returns and accordingly, the Commissioner was justified in applying both the double-assessment penalty in G.L. c. 62C, § 28 and the immediate assessment provision at G.L. c. 62C, § 26(d).  
The Board additionally found and ruled that the Commissioner was justified in applying the jeopardy assessment of G.L. c. 62C, § 29 in the circumstances surrounding this appeal, particularly where, contemporaneous with the assessment, one of the appellants had just been found guilty of tax evasion and conspiracy by a federal jury and was being sent to a federal penitentiary to serve his sentence.  See 830 CMR 62C.26.1(15)(e) (authorizing the Commissioner to use her discretion in determining when delay in assessment may jeopardize the collection of taxes).  The Board found that under the circumstances at issue, the Commissioner did not abuse her discretion in this regard. 

The appellants are not entitled to an abatement of the double assessment penalties pursuant to the Amnesty Program. 
 
In accordance with her authority under Chapter 461, the Commissioner implemented an Amnesty Program by issuing Technical Information Release 09-3 ("TIR 09-3").  As required by Chapter 461, TIR 09-3 provided that taxpayers who were the subject of a tax-related criminal prosecution or investigation prior to March 1, 2009 were not eligible for the Amnesty Program.  Despite this limitation, the Commissioner inadvertently issued a Tax Amnesty Notice to the appellants on February 25, 2009 and the appellants made payment pursuant to the Tax Amnesty Notice, resulting in a savings of penalties assessed under G.L. c. 62C, § 33.  The Commissioner acknowledged the error and did not request repayment of the savings enjoyed by the appellants.   The issue presented here is that the appellants also sought amnesty for the double-assessment penalties assessed by the Commissioner under G.L. c. 62C, § 28.
Pursuant to Chapter 461, the Amnesty Program was not available to taxpayers who, like Mr. Schussel, were the subject of a tax-related criminal prosecution prior to March 1, 2009.  Accordingly, Chapter 461 prohibited his eligibility for the Amnesty Program in its entirety, including amnesty for the double-assessment penalties.  Moreover, the Board has previously ruled that the denial of amnesty to a taxpayer who has neglected to meet his obligation under the applicable amnesty act to file returns and pay taxes does not amount to an abuse of the Commissioner's discretion.  See Fitch v. Commissioner of Revenue, Mass. ATB Findings of Facts and Reports 2012-605, 615.  The Board here found and ruled that the denial of amnesty to the appellants' double-assessment penalties was not an abuse of the Commissioner's discretion.  
The appellants' only other recourse for abatement of the double-assessment penalties is G.L. c. 62C, § 38, which specifically provides as follows:
No tax assessed on any person liable to taxation shall be abated unless the person assessed shall have filed, at or before the time of bringing his application for abatement, a return as required by this chapter for the period to which his application relates; and if he filed a fraudulent return, or having filed an incorrect or insufficient return, has failed, after notice, to file a proper return, the commissioner shall not abate the tax below double the amount for which the person assessed was properly taxable under this chapter. 

In the instant appeal, the appellants failed to file any returns for the tax years at issue.  After they received notice from the Commissioner, the appellants then filed incorrect/insufficient returns.  The filing of a proper return is a prerequisite to abatement of penalties under § 38.  See Joseph Insoft v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 1998-741, 748.  Therefore, pursuant to § 38, "the commissioner shall not abate the tax below double the amount" of the appellants' tax liability.
Accordingly, because the appellants were not entitled to either a waiver of penalties under the Amnesty Program or an abatement of penalties under G.L. c. 62C, § 38, the Board ruled that the appellants failed to meet their burden of proving that they were entitled to an abatement of the double-assessment penalties at issue.

The seven-year look-back period for non-filing taxpayers does not apply to the appellants.

G.L. c. 62C, § 26(d) provides as follows: 
In the case of a false or fraudulent return filed with intent to evade a tax or of a failure to file a return, the commissioner may make an assessment at any time, without giving notice of his intention to assess, determining the tax due according to his best information and belief. 

Thus, the statute of limitations on the assessment of taxes, interest and penalties does not begin to run where a taxpayer does not file a return. 
Notwithstanding the Commissioner's legal authority to make an assessment "at any time," the Commissioner has exercised the discretion to endorse a public written policy of limiting assessments against non-filing taxpayers to a seven-year period.  TIR 01-8 explains the Commissioner's policy to adhere to a seven-year time limitation for making assessments against taxpayers who failed to file returns.
The appellants contended that the Commissioner's assessments at issue violated her public written policy governing limitation periods for non-filing taxpayers.  However,  TIR 01-8 specifically provides that the Commissioner will apply the seven-year look-back period "subject to the exceptions described in Part VI."  Part VI provides those exceptions, in pertinent part, as listed below:
In certain instances described below, when a taxpayer has not filed tax returns, and the Commissioner believes that the taxpayer's circumstances do not merit the application of a look-back period of seven years or less, the Commissioner will assess such taxpayer for all taxable periods for which a return is due. In general, a taxpayer will be assessed for all taxable periods for which a return is due in each of the following instances, or in instances involving similarly egregious circumstances: 
... 
3. a knowing or willful failure to file returns with the intent to avoid the payment of tax;
4. a willful neglect to file returns despite reasonable cause to know of a filing responsibility;
...

According to the Commissioner's records, which the appellants did not dispute, the appellants did not file any personal income tax returns with Massachusetts from calendar year 1989 forward, until the Commissioner issued the Notice of Failure to File on May 15, 2007.  The Board found and ruled that the fact that the appellants owned and were employed by a Massachusetts company gave the appellants "a reasonable cause to know of a filing responsibility" with respect to, at least, nonresident tax returns.  By failing to file those income tax returns, the appellants displayed at least "a willful neglect to file returns," if not "a knowing or willful failure to file returns with the intent to avoid the payment of tax."  Accordingly, the Board found and ruled that the above exceptions to the seven-year look-back period were applicable in the instant appeal and the assessments at issue were timely according to the Commissioner's discretionary seven-year-look-back policy set forth in TIR 01-8.  

Conclusion
On the basis of the above Findings of Fact and Rulings, the Board issued a decision for the appellee upholding the assessments at issue.
  	 APPELLATE TAX BOARD

		  	      	 By:	________________________________
 	Thomas W. Hammond, Jr., Chairman

A true copy,
Attest: __________________________ 
	     Clerk of the Board

 As will be detailed below, the Amnesty Program was not available to Mr. Schussel, because he was the subject of a tax-related criminal investigation or prosecution.
 Moreover, despite their claim that they were New Hampshire residents, the appellants never filed any interest/dividend tax returns with New Hampshire.  

ATB 2013-106