Tax Type
Individual Income Tax
Description
Taxpayer abandoned his Virginia domicile and established a new domicile in State A
Topic
Domicile
Federal Conformity
Residency
Date Issued
11-12-2010
November 12, 2010
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the "Taxpayer") for the taxable year ended December 31, 2007.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that third-party financial documents for the 2007 taxable year were sent to the Taxpayer at a Virginia address. A review of the Department's records indicated that the Taxpayer had not filed a Virginia individual income tax return. The Department requested an explanation or a tax return from the Taxpayer. When no response was received, an income tax assessment was issued. The Taxpayer appeals the assessment, contending he was domiciled in ***** (State A) during the 2007 taxable year.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 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 another state, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia. Concurrently, that person must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely.
In order to change from one legal domicile to another legal domicile, there must be (1) actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The burden of proving that the domicile has been changed lies with the person alleging the change.
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 or domicile.
The Department concedes that it is difficult to know whether a taxpayer intends to return to his or her original domicile. The Department determines a taxpayer's intent through the information provided. In this case, the Taxpayer has the burden of proving that he established domicile in State A and abandoned his Virginia domicile. If the evidence is inadequate to meet this burden, the Department must conclude that the Taxpayer intended to maintain his Virginia domicile.
The Taxpayer had been a long-time domiciliary resident of State A when he moved to Virginia in 2000. In November 2006, he returned to live in State A. He took a number of actions indicating an intent to reestablish his domicile in State A. He established a permanent place of abode and obtained a driver's license in State A. Further, his business interests were located in State A. In addition, he spent the vast majority of his time in State A during 2007. The only evidence linking the Taxpayer to Virginia for the 2007 taxable year was a Virginia address on the third-party information statements provided to the IRS.
Based on a review of the facts in this case, I find that the Taxpayer abandoned his Virginia domicile and established a new domicile in State A prior to the 2007 taxable year. Accordingly, the assessment for the 2007 taxable year has been abated.
The Code of Virginia section cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Linda D. Foster
Deputy Tax Commissioner
- Linda D. Foster
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AR/1-4554166831.E
Rulings of the Tax Commissioner