87-0055 - Sales





v.                                                                                 :

AUDITING DIVISION OF THE                                :

            UTAH STATE TAX COMMISSION,            :           INFORMAL DECISION

            Respondent.                                                     :           Appeal No. 87-0055



            This is an appeal to the Utah State Tax Commission from an audit deficiency determined by Respondent on the XXXXX purchase of a XXXXX by Petitioner.  An informal hearing was held on XXXXX in the offices of the Utah State Tax Commission.  David J. Angerhofer, Hearing Officer, heard the matter for the Tax Commission.  XXXXX represented themselves.  XXXXX, Field Audit Supervisor, represented the Respondent.  Petitioner stated that he purchased the subject vehicle for his wife and delivered the vehicle to XXXXX, the state of residence for his wife.  The vehicle was financed and registered in the state of XXXXX.  Petitioner stated that he was going through a divorce with his wife at the time and that he put the vehicle in both their names for the right of survivorship.  Petitioner remained in Utah after the purchase of the vehicle.  Respondent presented evidence of the nonresident affidavit; the XXXXX XXXXX telephone directory listing Petitioner at an address in XXXXX; a part-year resident individual income tax return for the state of Utah listing Petitioner with a XXXXX address; a W-2 form for Petitioner listing Petitioner with a Utah address; a federal income tax form for XXXXX for Petitioner, which return claimed a moving expense; and evidence of the same moving expense adjustment for Petitioner's Utah return for XXXXX.


            The imposition of the fraud penalty is the only issue in this case. There is no dispute as to the assessment of tax and interest.  Respondent had the burden of proof to establish fraud in this matter.  Respondent has presented clear and convincing evidence of fraud.  Petitioner's testimony at the hearing contradicts Petitioner's position in the petition for redetermination with respect to the nature of Petitioner's stay in Utah.  The petition states: "I do temporarily reside in Utah as my assignment at XXXXX is a temporary assignment, but my wife has chosen to stay and maintain our property in XXXXX."  Petitioner's actions in claiming a moving expense to Utah and in purchasing a home in Utah indicate an intent to establish residency in the state of Utah.  Furthermore, Petitioner presented no evidence of his separation or divorce from his wife.  The nonresident affidavit states that Petitioner was employed by XXXXX in XXXXX, yet Petitioner stated that he came to Utah in XXXXX--over a year prior to the date of purchase of the vehicle.  Petitioner also stated in question six that he was not a resident of Utah and had not been domiciled in Utah within the past 60 days (prior to XXXXX).


            Based on the foregoing, the Utah State Tax Commission hereby denies Petitioner's petition for redetermination.  The assessment of tax, penalty, and interest as determined by the Auditing Division of the Utah State Tax Commission (including the fraud penalty) is hereby affirmed.

            DATED this 3 day of August, 1988.