Zacher v. Michael ( 1983 )

Determination of respondent New York City Commissioner of Finance, dated March 17, 1982, assessing petitioner under the city’s Unincorporated Business Income Tax Law (Administrative Code of the City of New York, § S46-2.0) in the principal amount of $87,744.69, plus interest (less a credit of $6,297.42 for personal income tax overpayment), is confirmed, without costs. The critical question in the case is whether the respondent’s determination that petitioners’ testator (hereinafter petitioner) was not an employee of CBS (and certain other companies) during the tax years was supported by substantial evidence. Although there is ample evidence that petitioner was an employee, there is sufficient in the record to meet the minimal test for judicial confirmation of the administrative determination that he was not, i.e., that the determination was supported by substantial evidence. The evidence supporting respondent’s determination that petitioner was engaged in conducting an unincorporated business and was not an employee includes the following: Petitioner reported his income from these activities on his tax returns on schedule C, entitled “Profit or (Loss) from Business or Profession,” referring to the business as operated under the name “Arthur Godfrey Productions”; on those forms he deducted business expenses of a type not usually incurred by an employee. He had two full-time business employees, one or two part-time business employees whom he paid out of his own pocket. He paid occupancy and commercial rent tax. His vacations were essentially unpaid for, as he was paid only for actual performances or pretaped programs. While petitioner agreed, as would be normal for an employee, not to advertise on his television (non-CBS) programs products competitive with those on his CBS radio program, CBS agreed (in a provision quite unusual in dealing with an employee) that CBS (the employer) would not accept advertising for petitioner’s CBS radio program for products competitive with those advertised on petitioner’s television (non-CBS) programs, if petitioner notified CBS of the products. Petitioner contends that he is entitled to credit (and that respondent has so conceded) with respect to certain royalty payments received totaling $18,796, such payments constituting “passive income” not subject to the unincorporated business tax, citing Matter of Merrick v Tully (68 AD2d 289). The record is unclear as to whether there is such a concession and whether the determination under review has made appropriate allowance for that. If such a concession has been made and if the concession requires some change in the determination, the parties may move to resettle the order to provide for such change. Concur— Ross, J. P., Silverman, Lynch and Kassal, JJ.