Biondi said that because he anticipated the state would challenge the action, he prepared the framework for the argument  to appeal the eventual notice of deficiency,based on the law as it existed in 2010 and in 2014.

New York state tax officials responded exactly as Biondi anticipated they would by issuing a determination of tax deficiency. Taxes due: $462,546.18, plus interest, totaling about $530,000, based solely on the value of the QTIP Biondi had excluded from the 2014 estate tax return.

Biondi instructed Hogan to pay the tax bill, based on his legal opinion that the 2014 QTIP assessment could be challenged.

Wiggin and Dana LLP law firm partners Robert Benjamin and Helen Heintz, representing the estate of Evelyn Seiden in October 2018, filed an application to vacate the notice of tax deficiency. The attorneys argued that since the trust property was not subject to federal taxation in 2010, it should not be subject to state taxation upon the death of the surviving spouse in 2014.

Legal papers report that attorney John Miller, representing the New York State Department of Taxation and Finance, argued that any reference to the federal Internal Revenue Code should be the United States Internal Revenue Code of 1986, with all amendments enacted on or before July 22,1998.

Mella, the surrogate’s court judge, sided with Benjamin and Heintz, finding for the estate.

“The Tax Department analysis is incorrect,” the judge wrote in her ruling.

Mella ordered that the New York state notice of deficiency imposed against the estate be vacated and that the state issue a refund.

One day after Biondi received the state notification that the estate would receive the court-ordered tax refund, he received it in the mail on December 14.

Biondi said that in his opinion, New York legislators were to blame for not taking legislative action in response to the 2010 federal estate tax repeal as it affects state-only QTIPs, or anytime a federal estate tax return is not required to be filed and a New York return is, which happens whenever the federal estate tax exemption threshold is higher than the state's.