Tax Type
Individual Income Tax
Description
Abandonment of domicile residency
Topic
Persons Subject to Tax
Taxpayers
Date Issued
10-05-2000
October 5, 2000
Re: § 1821 Application: Individual Income Taxation
Dear ****
This will reply to your letter in which you contest the assessment of additional income tax, penalty and interest against * * * (the "Taxpayers") for the 1995 and 1996 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayers, a husband and wife, were both domiciliary residents of the Commonwealth who jointly owned and lived in a Virginia home. The husband separated from the wife and moved to another State ("State A") for employment purposes in 1984. The wife continued to reside with the Taxpayers' children in the Virginia home. In June 1998, the husband reconciled with the wife, and returned to reside in the Virginia home.
While in State A, the husband leased an apartment. In 1994, the husband surrendered his Virginia driver's license and acquired a State A driver's license. The husband registered to vote in State A in 1993, and served on a jury in State A in 1995. Both the Taxpayers' children attended State A public universities and paid in-state tuition.
The Taxpayers did not file a Virginia individual income tax return for 1995 or 1996. The wife is a homemaker, and had no earned or unearned income in 1995 or 1996. Under audit, the department determined that the husband was a domiciliary resident of Virginia for the 1995 and 1996 taxable years and assessed tax, penalty, and interest. The Taxpayers contend that the assessments for 1995 and 1996 should be abated because the husband changed his domicile from Virginia to State A in 1984.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to Virginia, that person must intend to abandon his old domicile with no intention of returning to that same domicile. Concurrently, that person must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation.
In determining domicile, consideration may be given to the individual's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, profession or employment, income sources, residence of spouse, marital status, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine the person's domicile. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The department concedes that it is difficult to know whether a taxpayer intends to return to Virginia. The department determines a taxpayer's intent through the information provided. The taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. If the information is inadequate to meet his or her burden, the * * * Commissioner must conclude that he or she intended to return to Virginia.
Based on the facts provided, the Taxpayers have demonstrated the husband's intent to abandon his Virginia domicile and establish a State A domicile. The husband established connections in State A by registering an automobile, leasing an apartment and acquiring a State A driver's license. The husband did not own or register any vehicles in Virginia during that time period and surrendered his Virginia drivers' license in 1994. In addition, both of the Taxpayers' children attended State A public universities and paid tuition at in-state rates.
There are a number of actions which indicate the husband's intent to maintain a Virginia domicile. The husband owned a house in Virginia where the wife and children lived and where third party returns were mailed. Given the fact that the wife remained in Virginia with the children, it is reasonable under those specific facts and circumstances that the home and some of the husband's possessions in Virginia would remain for their benefit and use.
After reviewing the evidence and circumstances as a whole, the department has determined that the husband was not a domiciliary resident of Virginia for the 1995 and 1996 taxable years. Accordingly, the assessments for the 1995 and 1996 taxable years will be abated in full. If you have any questions regarding this determination, you may contact * * * at * * *
Danny M. Payne
Tax Commissioner
Re: § 1821 Application: Individual Income Taxation
Dear ****
This will reply to your letter in which you contest the assessment of additional income tax, penalty and interest against * * * (the "Taxpayers") for the 1995 and 1996 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayers, a husband and wife, were both domiciliary residents of the Commonwealth who jointly owned and lived in a Virginia home. The husband separated from the wife and moved to another State ("State A") for employment purposes in 1984. The wife continued to reside with the Taxpayers' children in the Virginia home. In June 1998, the husband reconciled with the wife, and returned to reside in the Virginia home.
While in State A, the husband leased an apartment. In 1994, the husband surrendered his Virginia driver's license and acquired a State A driver's license. The husband registered to vote in State A in 1993, and served on a jury in State A in 1995. Both the Taxpayers' children attended State A public universities and paid in-state tuition.
The Taxpayers did not file a Virginia individual income tax return for 1995 or 1996. The wife is a homemaker, and had no earned or unearned income in 1995 or 1996. Under audit, the department determined that the husband was a domiciliary resident of Virginia for the 1995 and 1996 taxable years and assessed tax, penalty, and interest. The Taxpayers contend that the assessments for 1995 and 1996 should be abated because the husband changed his domicile from Virginia to State A in 1984.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to Virginia, that person must intend to abandon his old domicile with no intention of returning to that same domicile. Concurrently, that person must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation.
In determining domicile, consideration may be given to the individual's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, profession or employment, income sources, residence of spouse, marital status, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine the person's domicile. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The department concedes that it is difficult to know whether a taxpayer intends to return to Virginia. The department determines a taxpayer's intent through the information provided. The taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. If the information is inadequate to meet his or her burden, the * * * Commissioner must conclude that he or she intended to return to Virginia.
Based on the facts provided, the Taxpayers have demonstrated the husband's intent to abandon his Virginia domicile and establish a State A domicile. The husband established connections in State A by registering an automobile, leasing an apartment and acquiring a State A driver's license. The husband did not own or register any vehicles in Virginia during that time period and surrendered his Virginia drivers' license in 1994. In addition, both of the Taxpayers' children attended State A public universities and paid tuition at in-state rates.
There are a number of actions which indicate the husband's intent to maintain a Virginia domicile. The husband owned a house in Virginia where the wife and children lived and where third party returns were mailed. Given the fact that the wife remained in Virginia with the children, it is reasonable under those specific facts and circumstances that the home and some of the husband's possessions in Virginia would remain for their benefit and use.
After reviewing the evidence and circumstances as a whole, the department has determined that the husband was not a domiciliary resident of Virginia for the 1995 and 1996 taxable years. Accordingly, the assessments for the 1995 and 1996 taxable years will be abated in full. If you have any questions regarding this determination, you may contact * * * at * * *
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner