Nasuti v. Comm'r

• Decision Date: 13 December 2016
• Docket Number: No. 15–P–1588.,15–P–1588.
• Citation: 90 Mass.App.Ct. 1120,65 N.E.3d 33 (Table)
• Parties: Matthew J. NASUTI v. COMMISSIONER OF REVENUE.
• Court: Appeals Court of Massachusetts

90 Mass.App.Ct. 1120

65 N.E.3d 33 (Table)

Matthew J. NASUTI

v.COMMISSIONER OF REVENUE.

No. 15–P–1588.

Appeals Court of Massachusetts.

December 13, 2016.

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Matthew J. Nasuti appeals from the final decision of the Appellate Tax Board (board) upholding, in part, the denial of his requests for the abatement of personal income taxes assessed for tax years 2006, 2007, and 2008. We affirm.

Many of the issues raised in Nasuti's briefs are beyond the scope of our limited review. See Schussel v. Commissioner of Rev., 472 Mass. 83, 86–87 (2015). Where, as here, the board proceedings were not officially reported, the sufficiency of the evidence underpinning the board's decision is not subject to challenge. See G.L. c. 58A, § 10 ; Coomey v. Assessors of Sandwich, 367 Mass. 836, 839–840 (1975). Absent a transcript, the board's findings of fact are final. See G.L. c. 58A, § 13 ; Minchin v. Commissioner of Rev., 393 Mass. 1004, 1005 (1984). On review, we are precluded by statute from considering any legal issue that does not appear to have been raised before the board, including the defense of bar based on the parties' 2009 settlement agreement. See G.L. c. 58A, § 13 ; Schussel v. Commissioner of Rev., supra at 87; RHI Holdings, Inc. v. Commissioner of Rev., 51 Mass.App.Ct. 681, 684–685 (2001). We are also unable to reach the merits of any claims of error that rely upon documents and facts not contained in the record. See Mass.R.A.P. 16(e), as amended, 378 Mass. 940 (1979); Mass.R.A.P. 18(a), as amended, 425 Mass. 1602 (1998); 831 Code Mass. Regs. § 1.28(1) (2007). We need not address any issues that so far as appears from the abbreviated record were not properly preserved below, such as the filing fee issue.² See Shawmut Community Bank, N.A. v. Zagami, 30 Mass.App.Ct. 371, 372–373 (1991), S.C. 411 Mass. 807, 811 (1992).

1. Indigency issues. Nasuti claims that the board erred by failing to accommodate his needs as an indigent taxpayer. We find no merit to these arguments.

First, having received no timely requests for an official report by a stenographer, the board did not order the proceedings to be officially recorded.³ See G.L. c. 58A, § 10. No taxpayer, including an indigent one, has the right to obtain a copy of the unofficial transcript, which was for the information of the board only. See G.L. c. 58A, § 10 ; 831 Code Mass. Regs. § 1.28(3) (2007).

Second, Nasuti has failed to establish any abuse of discretion in the denial of his motion to assign his case for a hearing in Northampton. See 831 Code Mass. Regs. § 1.19(4) (2007). With its limited staff and resources, the five member board processes a significant number of appeals each year.⁴ See G.L. c. 58A, § 1. At most, the informational materials published by the board show that hearings are held "periodically" in cities and towns far from Boston. No regulation or statute imposes a legal duty on the board to hold a regional hearing in any given case.

2. Deductions. Nasuti's challenges to the board's adverse legal rulings regarding his claimed deductions are unpersuasive. As the board explained to Nasuti, Massachusetts tax law is not coextensive, in material respect, with Federal tax law. See G.L. c. 62, § 2(d)(1). Given the more restrictive nature of deductions allowable under G.L. c. 62, the board was not bound by the Internal Revenue Service's audit determinations. The board's finding, based on its review of the evidence, that Nasuti had a law practice in 2007, but not in 2008, was final. To the extent Nasuti claims error of law in that determination, he misstates the governing legal standard. See Commissioner of Internal Rev. v. Groetzinger, 480 U.S. 23, 35 (1987).

3. Desk audit. The board properly rejected Nasuti's assertion that the Commissioner of Revenue (commissioner) was required to conduct a field audit as opposed to a desk audit. The Legislature empowered the commissioner to determine, through "the verification of a return or otherwise," that the full amount of taxes has been assessed; and in the event it has not, to issue a deficiency assessment.⁵ See G.L. c. 62C, § 26(b). The methodology to be used in the verification and assessment process is not mandated by any statute or regulation. The procedural details necessary to carry out these functions were left to the discretion of the commissioner. See G.L. c. 62C, §§ 2 and 3 ; Commonwealth v. Cerveny, 373 Mass. 345, 354 (1977), overruled on other grounds by Commonwealth v. Crocker, 384 Mass. 353, 360 (1981) ; Alliance to Protect Nantucket Sound, Inc. v. Department of Pub. Utils. (No. 1), 461 Mass. 166, 187 (2011).

Although Nasuti was not entitled to the audit of his choice, he was entitled to a fair process. Nasuti has failed to show that he was harmed by the auditing process employed here. Nasuti informed the Department of Revenue's (DOR) auditing division that he lacked the means to copy his records, and that he could not "risk mailing [DOR] the originals." Acting on the board's order, the commissioner ultimately arranged for Nasuti to bring his books and records to the DOR's Springfield office to be copied at no expense to him. Submitted to the board, this substantial file of documents served as the evidentiary basis for the board to allow many of Nasuti's claimed business expenses.

4. Procedural errors. We discern no procedural grounds to overturn the board's decision. Nasuti's argument that the board impermissibly "changed its decision" was unsupported. Where Nasuti's consolidated appeal covered assessments in three different tax years, the commissioner was entitled to the clarification of the board's first decision "for the appellant." The revised decision issued on October 17, 2014, merely supplemented that decision. Generated at Nasuti's request, the board's twenty-three page "findings of fact and report" explain the revised decision. See G .L. c. 58A, § 13 ; 831 Code Mass. Regs. § 1.32 (2007). All three decisions are consistent.

The board did not exceed the scope of its authority by issuing its May 14, 2012, order. See Assessors of Provincetown v. Vara–Sorrentino Realty Trust, 369 Mass. 692, 694 (1976) ("In the matter of ‘discovery’ much must be left to the judgment and discretion of the Appellate Tax Board."). Although the board did exceed the statutory time limits in making its decision and in...