Tax Type
Individual Income Tax
Description
Residency; Change of domicile
Topic
Taxpayers' Remedies
Date Issued
08-26-1996
August 26, 1996
Re: § 58.1-1821 Application: Individual Income Tax
Dear**********
This will reply to your letter of September 22, 1995, in which you and your wife (the "Taxpayers") seek the correction of your individual income tax assessment for 1992, and a determination of the filing requirements for the 1993 tax year. I apologize for the delay in responding.
FACTS
In 1987 the Taxpayers moved from Virginia to a foreign country to work for a private company. From 1989 through 1994, the husband took a position overseas as a temporary contracted employee of the United States Government. The Taxpayers state they intended to work overseas indefinitely and remain there after retirement. The Taxpayers' accountant advised them it was not necessary to file a Virginia tax return for 1992 or 1993 since the husband's employment status required them to pay import taxes on goods, value added tax, and taxes on their car. The Taxpayers did file Virginia returns for tax years prior to 1992. In 1994, the Taxpayers returned to Virginia.
The department contacted the Taxpayers regarding their 1992 filing deficiency. The Taxpayers were considered domiciliary residents of Virginia, and an assessment was issued. The Taxpayers contest the assessment based on their intent to remain overseas.
DETERMINATION
Code of Virginia § 58.1-302, copy enclosed, sets forth two classes of residents, namely, a domiciliary resident and an actual resident. Domiciliary residents are those whose legal domicile is Virginia. The determination of a bona fide intention to change one's domicile is a factual matter which must be resolved on an individual case basis. See Virginia Regulation 630-2-302, copy enclosed.
In making this determination consideration is given to a number of factors including, but not limited to, sites of real and tangible property, location of banking accounts, motor vehicle registration and licensing, profession or employment, location of schools attended by children, and reason for abandoning or acquiring domicile. A simple declaration of intent to abandon domicile, or physical presence elsewhere, is insufficient to rescind Virginia domicile.
Several factors indicate the Taxpayers did not abandon their Virginia domicile with the intent of establishing one elsewhere. They maintained their residence in Virginia, continued to vote as Virginia residents, sustained Virginia banking accounts, and paid local property taxes during the years in question. Further, the Taxpayers' children attended Virginia public schools and remained at the Virginia residence until they entered the armed forces. Finally, the Taxpayers returned to Virginia upon the termination of the husband's employment overseas.
Based on the information provided, there is no basis to conclude the Taxpayers intended to abandon Virginia as their domiciliary residence when they moved to a foreign country. Consequently, the assessment for 1992 was properly issued. In addition, a return for 1993 should be filed; forms and instructions are enclosed.
Accordingly, your request for relief must be denied. An updated bill will be issued as shown on the enclosed schedule. Interest has been accrued through the date of the appeal letter. The assessment should be paid in full within 60 days to avoid the accrual of additional interest. Please remit your payment to the attention of ********Virginia Department of Taxation, Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880. If additional information is needed, you may contact her at****************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10376M
Rulings of the Tax Commissioner