Tax Court: Sylvester and Yongjie Touhy v. Director, Division of Taxation, Docket No. 013607-2018; opinion by Bedrin Murray, J.T.C., decided March 1, 2022. For plaintiffs – Sylvester Tuohy and Yongjie Tuohy (Self-Represented); for defendant – Miles Eckardt, Deputy Attorney General (Matthew Platkin, Acting Attorney General of New Jersey, attorney).
Held: Defendant’s motion for summary judgment seeking dismissal of a complaint challenging the assessment of New Jersey gross income tax ("NJ GIT") for tax year 2014 is granted. Plaintiffs contend that defendant improperly added back into their gross income the following: (1) dividends, (2) capital gains, and (3) wages withheld to fund a § 403(b) retirement plan. In addition, plaintiffs argue that defendant erroneously calculated their resident tax credit under N.J.S.A. 54A:4-1 for income subject to tax in other states or political subdivisions. As to the resident tax credit calculation, the court holds plaintiffs are collaterally estopped from relitigating this issue because they unsuccessfully litigated the same issue in the Tax Court for a prior tax year. Even if the principle of collateral estoppel was not applied, plaintiffs’ allegations are without merit based on statutory, regulatory, and case law. With regard to plaintiffs’ challenge to the addition of dividends, capital gains, and certain wages to their 2014 gross income, the court finds their arguments to be unsupported by statutory or regulatory law, or precedent. Thus, plaintiffs have failed to overcome the presumption of validity accorded to defendant’s interpretation of the relevant NJ GIT statutes. Therefore, summary judgment in favor of defendant is appropriate.