Tax Type
Individual Income Tax
Description
Residency; Former military personnel
Topic
Taxpayers' Remedies
Date Issued
11-08-1996
November 8, 1996
Re: § 58.1-1821 Application: Individual Income Tax
Dear*********
This will reply to your letter in which you seek the correction of individual income tax assessments against you and your wife (the "Taxpayers") for the taxable years 1990, 1991, 1992, and 1993. I apologize for the delay in responding .
FACTS
In 1989, the husband was discharged from active duty in the military. He began working for an airline in January 1990. The wife maintained employment in Washington, D.C. and resided in Virginia. No Virginia returns were filed by the Taxpayers.
The department contacted the Taxpayers regarding this filing discrepancy. Based on evidence collected by the department, the Taxpayers were considered domiciliary residents of Virginia, and assessments were issued for the taxable years 1990, 1991, 1992, and 1993.
The Taxpayers agree that the wife is a Virginia resident and is liable for filing Virginia income tax returns. The husband, however, contends that he was an Illinois resident during the time in question, and is contesting the assessments.
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. An actual resident is any individual who is not domiciled in this state, but who actually maintains a place of abode in Virginia for more than 183 days during the taxable year.
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.
The husband contends that he is an Illinois resident. As an airline pilot, he is required to travel on a continuous basis. The department has determined that the address declared as the husband's Illinois residence is a rented mailbox address where, at the renter's discretion, the box number can be specified as an apartment, suite, or floor. Further, the Taxpayers have only documented ownership of rental property in Illinois. No other evidence has been provided to connect the husband to an Illinois abode.
Conversely, the Taxpayers own a home in Virginia where the wife resides. The Taxpayers are jointly listed in the Virginia phone directory and both have Virginia driver's licenses. In addition, information provided by the Internal Revenue Service shows that the majority of the federal information returns (W-2 forms, 1099 forms, etc.) were issued to the Virginia address. Finally, both Taxpayers' W-2 forms show state taxes withheld for Virginia, including those issued by the airline.
The husband further contends he is an Illinois resident because of his home of record at the time of enlistment. Under the Soldiers and Sailors Civil Relief Act (50 U.S.C.A. § 574) the military pay of active duty individuals, who are domiciled in another state, is exempt from Virginia taxation when in the state because of military orders. The husband was discharged from active duty military in 1989. After which, he commenced employment with an airline, had Virginia taxes withheld from his wages, and maintained a home in Virginia where his wife resided.
As requested on several occasions, the husband has not provided adequate documentation to indicate he is not subject to tax as a Virginia resident. He has not provided copies of the 1991 through 1993 state returns filed with Illinois. There is no evidence of a home in Illinois other than the rental property and rented mailbox address as previously discussed. Moreover, Virginia taxes were withheld from the husband's wages for military reserve duty and airline employment. Finally, the copy of the 1990 Illinois return that was provided by the Taxpayers, shows that the tax assessed was completely offset by a credit claimed for Virginia taxes paid on the same income. The 1990 Virginia return, however, was not filed by the Taxpayers until 1995; the 1990 Illinois return was dated and signed August 1991.
Pursuant to Code of Virginia § 58.1-111, copy enclosed, the department has the authority to estimate tax liability when a person refuses to file a valid return. Further, Code of Virginia § 58.1 -205, copy enclosed, provides that any assessment shall be deemed prima facie correct. Additionally, Code of Virginia § 58.1-312, copy enclosed, provides that an assessment can be issued at any time if a return is not filed.
The Taxpayers agree that the wife is a Virginia resident. The husband contends that he is a resident of Illinois. The Taxpayers have not, however, provided sufficient evidence to document the husband's Illinois residency. Thus, the department has no alternative but to consider both Taxpayers domiciliary residents of Virginia and to require the filing of Virginia resident income tax returns for the taxable years 1990, 1991, 1992, and 1993.
Accordingly, the assessments are upheld. Your file will remain open for an additional 60 days so that you may forward the information as requested in the department's letter dated August 21, 1996. Otherwise, no changes can be made to your bills. A schedule of the outstanding assessments is enclosed for your convenience. Interest has been updated through the date of your appeal. The bills should be paid within 30 days to avoid the accrual of additional interest charges. Please forward payment to ******Virginia Department of Taxation, Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880. Should you have any questions, please contact her at ******
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10998M
Rulings of the Tax Commissioner