December 1, 2016
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek reconsideration of the Department's determination letter issued as Public Document (P.D.) 16-19 (3/8/2016) to ***** (the “Taxpayer”) for the taxable year ended December 31, 2012.
FACTS
In P.D. 16-19, the Department upheld an assessment against the Taxpayer when she failed to respond to multiple requests for information. The Taxpayer has provided some additional information and requests that the Department reconsider its determination.
DETERMINATION
Reconsideration
Title 23 of the Virginia Administrative Code 10-20-165 F provides that a taxpayer who disagrees with the Tax Commissioner's final determination issued pursuant to Va. Code § 58.1-1822 may request a reconsideration of the determination. In order for the Tax Commissioner to grant a request for reconsideration, the request must be received by the Department no later than 45 days after the date of the determination letter, and the taxpayer must meet one of four specific requirements set forth in that section.
The Taxpayer must demonstrate that the original determination misstated the facts presented in the appeal, or the policies used in making the determination changed, or documentation that was not available to the Taxpayer at that time the determination was made available. Because the Taxpayer has presented evidence that was not considered in the original review, the Department will review its determination findings.
Residency
The Taxpayer contends that she only resided in Virginia to be with her husband, a military service member assigned to a Virginia duty station. The Taxpayer asserts that, after divorcing the service member, she moved to ***** (State A) in 2012, then to ***** (State B) in 2013. The Taxpayer has provided a copy of her State B driver's license to support her claim.
The Department's records show the Taxpayer filed Virginia income tax returns as resident for taxable years 2006 through 2011 and as a nonresident in 2013. Virginia Employment Commission (VEC) records show unemployment taxes remitted on behalf of the Taxpayer for all four quarters of the 2012 taxable year, and a portion of the 2013 taxable year. In addition, all payments were made by the same employer. The Taxpayer has been on record with Virginia's Department of Motor Vehicle (DMV) since 2006, and she renewed her Virginia driver's license in January 2011. Information provided by the Taxpayer shows the Virginia driver's license was surrendered to State B in June 2013.
Under Virginia Code § 46.2-323.1 states, “No driver's license ... shall be issued to any person who is not a Virginia resident.” In fact, this section states that every person applying for a driver's license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. Further, any applicant who knowingly makes a false statement to DMV is subject to penalties under Va. Code § 46.2-348. The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver's license. See Public Document (P.D.) 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver's license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002).
Although the Taxpayer has made several assertions regarding her domiciliary status for the 2012 taxable year, she has provided no evidence of residing outside of Virginia during the taxable year at issue. The Department sent a domicile questionnaire, but the Taxpayer has failed to respond with all of the requested information.
In such cases, Va. Code § 58.1-111 grants the Department authority to make an estimate of income tax based on information made available. Further, Va. Code § 58.1-205 states that in any proceeding relating to the interpretation of the tax laws of the Commonwealth of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayer to show an assessment is erroneous. Based on the information provided, the Taxpayer has failed to show the Department's assessment is incorrect.
Accordingly, the assessment for the 2012 taxable year is correct as issued and remains due and payable. An updated bill will be issued shortly. This letter constitutes the Department's final determination on this matter.
The Code of Virginia sections, and public documents cited are available on-line at ww.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/693.D