94-1430
Income Tax
Signed 10/16/95
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioners, : ORDER
:
v. : Appeal No. 94-1430
:
AUDITING
DIVISION OF THE : Account Nos. XXXXX
UTAH STATE TAX COMMISSION, : XXXXX
:
Respondent. : Tax Type: Income Tax
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for an Initial Hearing
pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. Jane Phan, Administrative Law Judge, heard
the matter for and on behalf of the Commission. Present and representing Petitioners was XXXXX. Present and representing Respondent were
XXXXX of the Auditing Division. XXXXX,
Assistant Attorney General, was present and observing on behalf of Respondent.
Petitioners
are appealing the assessment of income taxes, penalties and interest for the
tax years XXXXX. Petitioners had not
filed or paid Utah individual income taxes for these years asserting that they
XXXXX. Prior to XXXXX Petitioners have
filed Utah resident individual income taxes.
Originally Petitioners included the XXXXX in their Petition for
Redetermination but the appeal for these years was dismissed for untimely
filing by Order dated XXXXX.
APPLICABLE LAW
It
is the intent of the state legislature to impose on each resident individual
for each taxable year a tax measured by the amount of his or her taxable
income. (Utah Code Ann. §59-10-102.)
A
resident individual is an individual who is domiciled in this state for any
period of time during the taxable year.
(Utah Code Ann. §59-10-103(1)(j)(i).)
Domicile
is defined as the place where an individual has a true, fixed, permanent home
and principal establishment, and to which place he or she has the intention of
returning whenever he or she is away.
It is the place in which a person has voluntarily fixed the habitation
of himself and family, not for a mere special or temporary purpose, but with
the present intention of making a permanent home. After domicile has been established, two things are necessary to
create a new domicile: first, an abandonment of the old domicile; and second,
the intention and establishment of a new domicile. The mere intention to abandon a domicile once established is not
of itself sufficient to create a new domicile; for before a person can be said
to have changed his domicile, a new domicile must be shown. (Utah Adman. Rule
R-9-2I(D).)
ANALYSIS
The
issue in this appeal is whether or not the Petitioners were
"domiciled" in the State of Utah for the purposes of Utah Code Ann.
§59-10-103(1)(j)(i) for the years XXXXX.
The facts in this case as
presented were that Petitioners had been Utah residents who XXXXX. In XXXXX Petitioners along with XXXXX left
Utah to XXXXX. Both Petitioners worked
in XXXXX as XXXXX.
Petitioners
did not XXXXX instead they XXXXX to XXXXX.
Petitioners explained that the reason they did not XXXXX was that the
XXXXX was XXXXX time. Petitioners XXXXX
with XXXXX, XXXXX XXXXX. Some items
were XXXXX, but seemed to be insignificant in amount. Petitioners attempted to XXXXX but encountered difficulties with
XXXXX and were eventually unable to XXXXX.
Instead they XXXXX. Petitioner
XXXXX did return to XXXXX during the audit period. Petitioners did not XXXXX during the years in question. They obtained XXXXX. XXXXX went to XXXXX in XXXXX. When the need XXXXX. Petitioners obtained XXXXX XXXXX. Petitioners did not renew Utah drivers'
licenses or register cars in Utah during the period in question.
Petitioners
did not pay an XXXXX tax in XXXXX, they asserted that under XXXXX not required
to do so, but they did pay the XXXXX.
Petitioners retained bank accounts in Utah but also had XXXXX. Petitioners filed federal income tax returns
for the years in question with the XXXXX listed as their address. Petitioners maintain that this was an error
on the part of their accountant.
Petitioner
XXXXX stated at the hearing that although they had not intended to XXXXX it was
their intent to XXXXX. However, they
did XXXXX and moved back XXXXX because of problems their XXXXX.
Respondent
asserts that Petitioners remained domiciled in Utah during the years in
question, pointing out that in order to change domicile there has to be an
abandonment of the Utah domicile and the intent and establishment of a new
domicile. Respondent's representative
stated that Petitioners retained sufficient ties in Utah to show that there was
no abandonment of Utah as a domicile.
Ties to the State of Utah presented were that Petitioners retained XXXXX
in Utah, visited Utah at least once XXXXX, kept a Utah bank account and owned
some Utah property. Further, Respondent
asserted that Petitioners had not intended to, and did not, establish a new
domicile XXXXX, did not subject themselves to XXXXX laws, did not XXXXX and
they XXXXX.
Penalties
and interest had also been assessed against Petitioners. Petitioners asserted that they had relied on
their accountant to prepare their taxes correctly.
DECISION AND ORDER
The
weight of the evidence indicates that Petitioners did not abandon their Utah
domicile and did not XXXXX XXXXX.
Important factors in making this determination are that Petitioners
XXXXX XXXXX, traveled on XXXXX.
Generally, a XXXXX must have a XXXXX XXXXX for tax purposes and domicile
is presumed to be the last address XXXXX.
Based
upon the information presented at the hearing, and the records of the Tax
Commission, the Commission finds Petitioners were domiciled in Utah during the
tax years XXXXX. The Tax Commission
affirms the assessment against Petitioners for the deficiency of individual
income tax and interest for the years ending XXXXX. The Commission waives the penalties assessed.
This
decision does not limit a party's right to a Formal Hearing. However, this Decision and Order will become
the Final Decision and Order of the Commission unless any party to this case
files a written request within thirty (30) days of the date of this decision to
proceed to a Formal Hearing. Such a
request shall be mailed to the address listed below and must include the
Petitioner's name, address, and appeal number:
Utah State Tax Commission
Appeals Division
210 North 1950 West
Salt Lake City, Utah 84134
Failure
to request a Formal Hearing will preclude any further administrative action or
appeal rights in this matter.
DATED
this 16th day of October, 1995.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val
Oveson Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Alice
Shearer
Commissioner Commissioner
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