# The Absurd Lengths Billionaires Go to Not “Live” in NYC Channel: Half as Interesting Source: https://www.youtube.com/watch?v=veJfMypXWtc Recap page: https://rapidrecap.app/video/veJfMypXWtc Generated: 2025-07-10T04:34:29.262+00:00 --- ## Quick Overview New York State aggressively audits wealthy individuals to determine tax residency, collecting over $1 billion in revenue from 2013-2017. Auditors use five domicile factors (home, active business involvement, time spent, items near and dear, family connections) and two statutory residency factors (permanent place of abode, 184-day rule) to prove residency, often requiring meticulous documentation of time spent outside the state to avoid significant tax liabilities. ## Summary **Key Points:** - New York State's residency auditors generated $1 billion in revenue from 2013-2017 by enforcing tax residency rules. - New York residents pay taxes on all income earned globally, while non-residents only pay on income earned within the state. - Auditors determine domicile based on five factors: home, active business involvement, time spent, items near and dear, and family connections. - Individuals can be deemed a 'statutory resident' if they maintain a permanent place of abode in New York and spend more than 183 days in the state. - A single minute spent in New York counts as a full day for the 184-day rule, with limited exceptions for medical care or transit. - Wealthy individuals like Julian Robertson have gone to extreme lengths, such as meticulously tracking their time and scheduling travel to avoid counting days in New York, to prevent multi-million dollar tax liabilities. - Taxpayers can use specialized apps and strategic planning to track their days and provide evidence of non-residency during audits. **Context:** New York State has a robust and aggressive tax residency audit program designed to ensure individuals pay their fair share of taxes. Unlike non-residents who are only taxed on income earned within the state, New York residents are subject to taxes on their worldwide income, making residency status a critical determination for high-net-worth individuals. The state's auditors employ a comprehensive set of criteria to establish an individual's true domicile and statutory residency, often delving into personal habits and financial records. ## Detailed Analysis New York State employs over 300 residency auditors who generated $1 billion in revenue from 2013 to 2017 by scrutinizing individuals' tax residency. New York residents pay taxes on all worldwide income, while non-residents only pay on income earned within New York. Residency audits are notoriously difficult, intrusive, and document-intensive. Auditors determine domicile based on five primary factors: the location of one's most significant home (largest, most valuable, most 'homey'), active business involvement (where primary business activities occur), time spent (where one spends the most days, even if not a majority of the year), items near and dear (where sentimental and valuable possessions are kept), and family connections (where spouse and children reside). If an individual is not domiciled in New York, they can still be deemed a statutory resident if they maintain a permanent place of abode in New York for at least 10 months of the tax year and spend more than 183 days in the state. A single minute spent in New York counts as a full day, with exceptions for inpatient medical care and pass-through travel. Auditors assume presence in New York unless proven otherwise with flight records, credit card statements, phone usage, or toll charges. Famous cases like Martha Stewart and Julian Robertson highlight the extreme lengths individuals go to avoid New York taxes and the detailed evidence auditors require. Stewart failed to avoid residency despite renovations, while Robertson successfully avoided $27 million in taxes by meticulously tracking his days and leaving the city before midnight. The video suggests using day-tracking apps and avoiding certain tax claims to prevent accidental residency. ### New York Residency Audits Overview - New York State's 300+ residency auditors collected $1 billion in revenue from 2013-2017 - Residents pay taxes on all income earned globally, while non-residents only pay on income earned in New York - Residency audits are described as difficult, intrusive, and document-intensive, often compared to a colonoscopy. ### Determining Domicile (5 Factors) - Home: Auditors assess the largest, most valuable, or most 'homey' property, often visiting residences - Active Business Involvement: Significant personal involvement in New York-based businesses or social responsibilities indicates domicile - Time: Auditors consider where an individual spends the most time, even if not a majority of the year, across all locations - Items Near and Dear (Teddy Bear Test): Keeping sentimental or valuable items in New York suggests it is one's true home; moving valuable items via U-Haul is a red flag - Family Connections: The primary residence of one's spouse and children is a strong indicator of domicile. ### Determining Statutory Residence (2 Factors) - Permanent Place of Abode: Maintaining an inhabitable place in New York for at least 10 months of the year, even if not continuously occupied - 184-Day Rule: Spending more than 183 days in New York during the tax year, where any calendar day with a single minute spent in New York counts, with exceptions for medical care or transit. ### Notable Residency Audit Cases - Martha Stewart: Attempted to claim Connecticut residency due to renovations in her Hamptons home but failed because her property was deemed habitable and her author bio stated New York residency - Julian Robertson: Successfully avoided a $27 million tax bill by meticulously tracking his days, leaving New York before midnight, and flying in after 6 AM to avoid counting travel days. ### Strategies to Avoid Accidental Residency - Individuals can use day-tracking apps to record their whereabouts and avoid exceeding the 183-day limit - Avoid claiming tax credits or exemptions exclusive to New York residents - Do not claim a change of domicile on January 1st, as this is a red flag for auditors - Schedule private jet arrivals and departures to avoid counting specific days in New York. ![Screenshot at 0:00: Person scrolling through phone calendar](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-00-00.png) ![Screenshot at 0:06: Busy Times Square street scene](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-00-06.png) ![Screenshot at 0:21: Person counting money with $1 Billion text](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-00-21.png) ![Screenshot at 0:36: Cartoon woman with 'You're Being Audited' text](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-00-36.png) ![Screenshot at 0:55: Cartoon woman with $326,753,263 text](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-00-55.png) ![Screenshot at 1:08: Document titled 'What to Expect in a Residency Audit'](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-01-08.png) ![Screenshot at 1:56: Graphic showing 'The 5 Factors in Determining Domicile'](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-01-56.png) ![Screenshot at 3:14: Graphic showing 'Items Near and Dear' factor](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-03-14.png) ![Screenshot at 4:14: Graphic showing 'The 2 Factors in Determining Statutory Residence'](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-04-14.png) ![Screenshot at 5:24: Lawyer at desk with corkboard of evidence](https://ss.rapidrecap.app/screens/veJfMypXWtc/00-05-24.png)