Tenants Submitted False Tax Returns in High-Rent Deregulation Proceeding

(Decision submitted by Joshua G. Losardo of the Manhattan law firm of Belkin Burden Wenig & Goldman, LLP, attorneys for the landlord.) Facts: Landlord applied in 2005 for high-rent/high-income deregulation of tenants' apartment. Tenants claimed that their income was below the deregulation threshold. Tenants, husband and wife, both filed income tax returns for 2003. Only the wife had filed a return for 2004. The husband had filed for an extension. Tenant later stated that he had filed his 2004 return. The New York State Department of Taxation and Finance (DTF) couldn't verify that tenants had filed any income tax returns for 2003 and 2004. The DRA asked tenants to obtain verification from the DTF. Eventually, the DTF verified that tenants had filed New York State income tax returns for 2004 from a Connecticut address. But the DTF was able to verify only that the wife had filed in 2003. The DTF found no proof in its files that the husband had filed in 2003. The DRA ruled for landlord and deregulated tenants' apartment. Tenants appealed. DHCR: Tenants lose. Tenants didn't provide accurate income verification information to the DRA. Instead, tenants gave the DHCR false and inaccurate information concerning the filing of their tax returns. The copies of tax returns that tenant submitted to the DRA listed the apartment as their address.

Merker: DHCR Adm. Rev. Docket No. UK410029RT (2/8/07) [7-pg. doc.]