Tax Type
Individual Income Tax
Description
Change of Domicile.
Topic
Taxpayers
Date Issued
03-18-1985
March 18, 1985
Dear ****
This is in reply to your letter of July, 1984 in which you submit an application for correction of the assessments for individual income tax, penalties and interest assessed against your client for taxable years 1972-1981.
FACTS
Taxpayer moved to Virginia in 1968 to accept employment with a large multi-national firm headquartered in Richmond. He resided and was employed in Virginia from 1968 until May, 1974. At that time he was assigned to work with a foreign affiliate in Italy. Taxpayer has resided there continuously from 1974 to date, only returning to the United States for vacations and business meetings.
The Department of Taxation contacted the taxpayer concerning his failure to file a 1981 Virginia income tax return after he filed a 1981 federal income tax return with a Virginia address. In the course of the department's investigation, it was discovered that the taxpayer had not filed a Virginia income tax return since 1971. Assessments were issued for Virginia income tax, penalty and interest for taxable years 1972-1981.
DETERMINATION
Since there are two issues involved in this application, I will address each issue separately.
First, the taxpayer maintains that he previously filed and paid his Virginia income tax for 1972, 1973 and 1974. He puts forth no factual evidence to support his position that the returns were previously filed. The department has a record of each income tax return processed for the three years in question. After a thorough and diligent search of those records, we are convinced that no Virginia income tax returns were processed for this taxpayer in any of the years for which the department has issued an assessment.
Virginia Code Section 58.1-312 provides:
You have provided the department with proof that the taxpayer had Virginia income tax withheld from his salary in 1972, 1973 and 1974. Even after the tax liability for 1972 and 1973 is reduced by the amount of Virginia income tax withheld for each year, a tax liability remains. After crediting the 1974 Virginia income tax with the amount of income tax withheld for that year, an overpayment is indicated.
You suggest in your application that, even if the taxpayer concedes the fact that he had not previously filed, the assessments should be abated because the sum of the Virginia income tax withheld by his employer for the three years exceeds the sum of the tax assessed for the three years. Due to the statutory requirements for overpayments, this cannot be done.
The disposition of an overpayment is controlled by Virginia Code Section 58.1-499, which provides:
The second issue involves the taxpayer's liability for Virginia income tax for the years 1975 through 1981. The taxpayer asserts that he changed his domicile to Italy in 1974 when he was transferred to his company's foreign subsidiary. The assessments for the years were based on the premise that the taxpayer changed his residence, but not his true domicile when he moved to Italy.
Domicile has a broader and more comprehensive meaning than residence. Residence, together with the requisite intent to remain, is necessary to preserve a domicile after it is once acquired. Consequently, one may be a resident of one jurisdiction while having a domicile in another. The State Supreme Court stated the following in State-Planters Bank v. Commonwealth of Virginia 174 Va. 289, 6 S. E. 2d 629 (1940):
Based on the information that you have provided, the department now concurs that the taxpayer changed his domicile to Italy. I am ordering that the assessments for taxable years 1974 through 1981 be abated in full. After credit is allowed for the Virginia income tax withheld, the assessments for taxable years 1972 and 1973 will be revised to reflect a tax due of ***and ***respectively. The applicable late filing penalty, late payment penalty and interest at the statutory rate will be computed on these revised amounts and reflected in the revised assessments.
Dear ****
This is in reply to your letter of July, 1984 in which you submit an application for correction of the assessments for individual income tax, penalties and interest assessed against your client for taxable years 1972-1981.
FACTS
Taxpayer moved to Virginia in 1968 to accept employment with a large multi-national firm headquartered in Richmond. He resided and was employed in Virginia from 1968 until May, 1974. At that time he was assigned to work with a foreign affiliate in Italy. Taxpayer has resided there continuously from 1974 to date, only returning to the United States for vacations and business meetings.
The Department of Taxation contacted the taxpayer concerning his failure to file a 1981 Virginia income tax return after he filed a 1981 federal income tax return with a Virginia address. In the course of the department's investigation, it was discovered that the taxpayer had not filed a Virginia income tax return since 1971. Assessments were issued for Virginia income tax, penalty and interest for taxable years 1972-1981.
DETERMINATION
Since there are two issues involved in this application, I will address each issue separately.
First, the taxpayer maintains that he previously filed and paid his Virginia income tax for 1972, 1973 and 1974. He puts forth no factual evidence to support his position that the returns were previously filed. The department has a record of each income tax return processed for the three years in question. After a thorough and diligent search of those records, we are convinced that no Virginia income tax returns were processed for this taxpayer in any of the years for which the department has issued an assessment.
Virginia Code Section 58.1-312 provides:
-
- A. The tax imposed by this chapter may be assessed at any time if:
- 1. No return is filed;
- 1. No return is filed;
- A. The tax imposed by this chapter may be assessed at any time if:
You have provided the department with proof that the taxpayer had Virginia income tax withheld from his salary in 1972, 1973 and 1974. Even after the tax liability for 1972 and 1973 is reduced by the amount of Virginia income tax withheld for each year, a tax liability remains. After crediting the 1974 Virginia income tax with the amount of income tax withheld for that year, an overpayment is indicated.
You suggest in your application that, even if the taxpayer concedes the fact that he had not previously filed, the assessments should be abated because the sum of the Virginia income tax withheld by his employer for the three years exceeds the sum of the tax assessed for the three years. Due to the statutory requirements for overpayments, this cannot be done.
The disposition of an overpayment is controlled by Virginia Code Section 58.1-499, which provides:
-
- No refunds under this section, however, shall be made for any overpayment of less than one dollar except on special written application of the taxpayer, nor shall any refund of any amount under this section be made, whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return, or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, whichever is later. (Emphasis added.)
- No refunds under this section, however, shall be made for any overpayment of less than one dollar except on special written application of the taxpayer, nor shall any refund of any amount under this section be made, whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return, or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, whichever is later. (Emphasis added.)
The second issue involves the taxpayer's liability for Virginia income tax for the years 1975 through 1981. The taxpayer asserts that he changed his domicile to Italy in 1974 when he was transferred to his company's foreign subsidiary. The assessments for the years were based on the premise that the taxpayer changed his residence, but not his true domicile when he moved to Italy.
Domicile has a broader and more comprehensive meaning than residence. Residence, together with the requisite intent to remain, is necessary to preserve a domicile after it is once acquired. Consequently, one may be a resident of one jurisdiction while having a domicile in another. The State Supreme Court stated the following in State-Planters Bank v. Commonwealth of Virginia 174 Va. 289, 6 S. E. 2d 629 (1940):
-
- If . . . a person is abiding at a particular place and while so abiding forms and intention to make it his home permanently or for an indefinite period, and continues to remain there in pursuance of such intent he thus acquires to a new domicile.
- If . . . a person is abiding at a particular place and while so abiding forms and intention to make it his home permanently or for an indefinite period, and continues to remain there in pursuance of such intent he thus acquires to a new domicile.
Based on the information that you have provided, the department now concurs that the taxpayer changed his domicile to Italy. I am ordering that the assessments for taxable years 1974 through 1981 be abated in full. After credit is allowed for the Virginia income tax withheld, the assessments for taxable years 1972 and 1973 will be revised to reflect a tax due of ***and ***respectively. The applicable late filing penalty, late payment penalty and interest at the statutory rate will be computed on these revised amounts and reflected in the revised assessments.
Rulings of the Tax Commissioner