This was not the “happy ending” William Halby was looking for.
The 77-year-old Brooklyn lawyer owes tens of thousands of dollars in back taxes for wrongly deducting more than $300,000 in prostitutes, porn, sex toys and erotic massages, a state tax judge ruled yesterday. The ruling came despite the meticulous efforts of Halby – a tax lawyer – to prove the deductions were reasonable medical expenses in his effort to fight depression and erectile dysfunction brought on by age.
“I was depressed,” Halby, who’s divorced, semi-retired and living alone in a Bay Ridge apartment, told The Post yesterday. “I live a solitary life. I have no social life. I needed that release.”
Halby said he found his “sex surrogates” – preferably brunettes – through ads in The Village Voice and sometimes visited them several times a week. “Over the years, I’ve been with dozens of girls for full-body massage with . . . happy ending,” he said.
All told, Halby spent about $322,000 to satisfy his desires, according to court papers.
In 2002 alone, Halby deducted $111,364 for “therapeutic sex” and massages “to relieve osteoarthritis and enhance erectile function through frequent orgasm.”
He claimed another $2,173 on porn “to enhance sexual performance in lieu of taking Viagra.”
In 2003, his $101,930 in deductions included $162 for “sexual performance aids” such as lubes, condoms and nipple clamps, the court papers said.
But the Department of Taxation and Finance roundly rejected the deductions, leaving the septuagenarian sex addict with a $24,271 state tax bill.
“It must be noted that portions of [Halby’s] ‘sex therapy’ were, in fact, sex for a fee, in violation of penal law,” Administrative Law Judge Brian Friedman wrote.
Halby, who faces similar action by the IRS, said he will appeal.
A former counsel for the Equitable Life Insurance Society of the United States, Halby represented himself through the proceedings. He meticulously recorded each liaison in a notebook titled “Tax Journal,” including the cost and practitioners’ first names.
When auditors challenged the expenses, he produced books and articles demonstrating the health benefits of sex, including a 2001 New York Post article about the use of sex workers in Danish nursing homes. A state auditor dryly rejected the arguments.
“Illegal treatments cannot be included in expenses,” the auditor said. “In addition to being illegal in New York state, these expenses are not substantiated with receipts.”
Halby is “of counsel” with the Larchmont law firm McMillan, Constabile, Maker & Perone.
Halby infrequently assists the firm with tax issues. A firm partner, Stewart McMillan, had not heard of Halby’s tax troubles.
“He seems like a nice man,” McMillan said. “He’s thought of as a good tax lawyer.”