Tax Type
Individual Income Tax
Description
No objective evidence to claim not a resident of Virginia for taxable year.
Topic
Domicile
Federal Conformity
Records/Returns/Payments
Date Issued
07-16-2012
July 16, 2012
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter contesting the Virginia individual income tax assessments issued to ***** (the "Taxpayer") for the taxable years ended December 31, 2007 through 2008. I apologize for the delay in responding to your letter.
FACTS
The Department received information from the Internal Revenue Service that tax documents for the 2007 and 2008 taxable years were sent to the Taxpayer at a Virginia address. The Department requested additional information from the Taxpayer to determine if the Taxpayer's income was subject to Virginia individual income tax. When the Taxpayer did not respond to the information requests, the Department issued an assessment to the Taxpayer for the taxable years at issue.
The Taxpayer appealed both assessments and provided additional information. Based on the evidence provided, the 2008 assessment was abated. The Taxpayer contends that he was not domiciliary resident of Virginia for the 2007 taxable year; therefore, the assessment is erroneous and should be abated.
DETERMINATION
Two classes of residents, a domiciliary resident and any actual resident, are set forth in Va. Code § 58.1-302. The domiciliary residence of a person means 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. 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.
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 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 Tax Commissioner must conclude that he or she intended to remain indefinitely in Virginia.
In this case, the Taxpayer filed Virginia resident income tax returns for the 2003 through 2005 taxable years. He did not file Virginia income tax returns for the 2006 and 2007 taxable years, but began filing returns as a nonresident in 2008.
For 2007, the Taxpayer's employer attributed all of his wages and withholding to Virginia. In addition, the Taxpayer Used a Virginia address to receive federal tax information returns. The information provided by the Taxpayer is not sufficient to prove that the Taxpayer's domiciliary residence for the 2007 taxable year was anywhere other than Virginia. Without any other evidence, the Department cannot determine that the Taxpayer changed his domicile from Virginia to another jurisdiction. Accordingly, there is no basis to revise the assessment for the 2007 taxable year.
By letter dated March 15, 2012, the Department requested additional information to ascertain the Taxpayer's domiciliary status for the taxable year at issue. As of the date of this letter, the Taxpayer has provided no objective evidence to substantiate his claim that he was not a resident of Virginia for the 2007 taxable year.
Virginia Code § 58.1-205 provides that in any proceeding relating to the interpretation of the tax laws 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 he was not subject to income tax in Virginia.
I will, however, grant the Taxpayer one final opportunity to provide sufficient evidence regarding his domicile for the 2007 taxable year. Such evidence should be provided within 30 days from the date of this letter to: Virginia Department of Taxation, Appeals and Rulings, Attention: *****, Post Office Box 27203, Richmond, Virginia 23261-7203. If the requested information is not provided within the allotted time, the 2007 assessment will become due and payable.
The Code of Virginia sections cited 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, please contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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Craig M. Burns
Tax Commissioner
AR/1-4923311225.D
Rulings of the Tax Commissioner