Tax Estoppel

PH-105 Realty Corp v Elayaan, 2020 NY Slip Op 02971 [1st Dept. 2020]

The court improvidently exercised its discretion in failing to apply the doctrine of “tax estoppel.” Under that doctrine, defendants’ acts in filing corporate tax returns for the years 2010 through 2014, signed by defendant Elayan, which contained factual statements that plaintiff Jaber had a 75% ownership interest in Edgewater during that time period, and precludes defendants from taking a position contrary to that in this litigation (see Mahoney-Buntzman v Buntzman, 12 NY3d 415, 422 [2009]; Livathinos v Vaughan, 121 AD3d 485 [1st Dept 2014]; see also Man Choi Chiu v Chiu, 125 AD3d 824 [2d Dept 2015], lv denied 26 NY3d 905 [2015]). To the extent our decision in Matter of Bhanji v Baluch (99 AD3d 587 [1st Dept 2012]) has been interpreted as making the doctrine generally inapplicable with respect to factual statements of ownership in tax returns, we clarify that the doctrine applies where, as here, the party seeking to contradict the factual statements as to ownership in the tax returns signed the tax returns, and has failed to assert any basis for not crediting the statements (see Cusimano v Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 118 AD3d 542 [1st Dept 2014]; Stevenson-Misischia v L’Isola D’Oro SRL, 85 AD3d 551 [1st Dept 2011]; see also Matter of Elmezzi, 124 AD3d 886, 887 [2d Dept 2015]).

The bold is mine.

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