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Julian Robertson’s Cinderella complex: Out of the city by midnight

By Laurie Bennett

November 2, 2010 at 7:55am

Hedge funder Julian Robertson has saved $27 million in taxes, with a tribunal finding that he spent more than half of the year 2000 outside New York City.

The lengthy ruling by the New York State Tax Appeals Tribunal is fascinating - not only for its insight into the daily life of a billionaire, but for the taxman’s tenacity.

At issue were several days in 2000, when Robertson claimed to have been out of New York.

By law, any individual who spends more than 183 days in the city during a calendar year is considered a resident. The state is quite specific about this: Even a few minutes inside the city limits, unless it’s travel time between two points outside New York, is considered a day of residency.

Robertson, the founder of Tiger Management, had his office in Manhattan. He and his wife maintained an apartment on Central Park South, a house on Long Island and a vacation home in Sun Valley, Idaho. They also rented a summer place in the Hamptons.

As the tribunal noted, Robertson was aware of the rules and planned to spend at least half his days outside the city limits. He often would leave the office on Friday afternoon and travel to his home on Long Island to “earn a tax day” on Saturday.

An assistant was assigned to keep track of Robertson’s whereabouts and report to him periodically on the tax day tally.

The goal, no matter what his Friday evening activities were, was to be out of the city before midnight. In cases where the car service went to the wrong address or refused to transport the Robertsons’ large dog, a cab was called.

When Josephine Robertson was being treated for breast cancer in 1998 and 1999, the couple spent much more of their time in the city, and acknowledged being city residents during those years. (Josephine Robertson died last June. )

With so much money at stake, state authorities closely questioned Robertson, his wife, his employees and his friends.

They also scrutinized Robertson’s electronic calendar, which was maintained by an assistant. Describing himself as “computer illiterate,” Robertson said he had never seen the calendar. (Better question than residency: How can a computer illiterate manage billions of dollars in today’s economy?)

The dispute boiled down to just four days, with Robertson’s comings and goings examined in detail - through car receipts, flight logs, phone records and calendar entries. At one point the count hinged on whether the pilot used Greenwich Mean Time or New York local time to record a flight arrival.

While the amount at issue would justify actions by the tax authorities, you have to wonder about tax laws that place so much importance on a few flight logs and car service slips.

Never mind the bad PR for Manhattan. The Wall Street Journal wrote about the case last year under this headline: “27 Million Reasons to Leave New York.”

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