If you’re planning to leave Washington before the state’s new income tax arrives in 2028, you probably think the hard part is changing your domicile.
It isn’t.
The hard part is proving where you were on a random Tuesday years later.
Just ask Julian Robertson.
In Matter of Julian H. and Josephine Robertson (DTA No. 822004), the New York Division of Taxation issued a Notice of Deficiency asserting additional New York City personal income tax for the year 2000 of $26,702,341, plus interest. No penalties were asserted.
The fight lasted years.
In the end, it came down to four days.
Not four months.
Not four weeks.
Four days.
The issue wasn’t domicile
Most people assume residency audits are about domicile.
Sometimes they are.
But Robertson’s case was different.
New York asserted that Robertson was a “statutory resident” of New York City.
Under that framework, a taxpayer can be taxed as a resident even if domiciled elsewhere if two things are true:
First, the taxpayer maintains a permanent place of abode in New York City.
Second, the taxpayer spends more than 183 days there during the year.
Robertson admitted he maintained a permanent place of abode in New York City.
That left one question:
How many days was he actually in New York City?
Every day counts
This became a giant exercise in counting days.
Not estimating.
Counting.
The parties ultimately stipulated that Robertson was present in New York City on 183 specific days, and not present on 179 specific days.
That left four disputed days: April 15, July 23, July 31, and November 16, 2000.
If New York won any of those four days, Robertson lost.
If Robertson won all four, New York lost.
That’s how close residency audits can become.
The lesson most people miss
People planning a move tend to focus on the big events.
Buying the new house.
Selling the old one.
Changing driver’s licenses.
Moving family members.
Those things matter.
But the Robertson case illustrates something equally important: documentation.
When the government audits a residency change years later, memories are almost worthless.
Records matter.
The taxpayer who says, “I think I was in Florida that day,” is in trouble.
The taxpayer who produces travel records, calendars, receipts, phone records, and contemporaneous documentation is in a much stronger position.
Residency cases are often won before the audit begins.
They’re won when the records are created.
The Washington lesson
Washington has not historically generated the same volume of residency litigation as New York or California.
That may change.
Once Washington’s new income tax takes effect in 2028, high-income taxpayers who leave the state before a liquidity event should expect greater scrutiny regarding residency and domicile issues.
When that happens, Washington auditors will not need to invent a playbook.
New York and California have already spent decades developing one.
The Robertson case provides a preview of what that future may look like.
The dispute may start with a multimillion-dollar tax bill.
But it may end with a question as simple as:
Can you prove where you were on those four days?
The rule that actually matters
People assume residency audits are about legal arguments.
Often they’re about evidence.
Julian Robertson spent years litigating four days because four days were worth millions.
The taxpayers who survive these audits are rarely the ones with the cleverest arguments.
They’re the ones with the best records.
