95-0129
Income Tax
10/10/95
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX, )
:
Petitioners, : ORDER
:
v. : Appeal No. 95-0129
:
AUDITING
DIVISION OF THE : Account Nos. XXXXX
UTAH STATE TAX
COMMISSION, : and 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, Assistant Attorney General, and XXXXX, XXXXX, and XXXXX of the Auditing
Division.
Petitioners
are appealing assessment of tax, penalties and interest relating to their Utah
individual income tax for the tax years XXXXX through XXXXX. Petitioners had not filed a Utah individual
income tax return for the XXXXX tax year but had filed a federal return as
married filing jointly. In XXXXX they
filed a federal return and Petitioner XXXXX filed a non-resident Utah individual
income tax return with her filing status as Head of Household. In XXXXX and XXXXX Petitioner XXXXX filed
Utah returns as a resident of Utah with filing status as Head of
Household. Petitioner XXXXX did not file
state tax returns for XXXXX through 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 Admin. RuleR865-9I-2(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 through XXXXX. A taxpayer’s
domicile is a question of fact.
The
facts in this case as presented were that Petitioners had been Utah residents
who owned a home in XXXXX. Late in
XXXXX Petitioners left Utah with their minor children so that Petitioner XXXXX
could work in XXXXX as a civilian employee.
Petitioner did not sell or lease their home in XXXXX, instead
Petitioners’ adult children lived there during the audit period. While in XXXXX Petitioners lived off base in
apartments that they rented.
Petitioners and their children received health care in XXXXX. Petitioners retained their XXXXX drivers
licenses because they needed them to obtain XXXXX drivers licenses.
Respondent
asserts that Petitioners remained domiciled in XXXXX during the years in
question, pointing out that in order to change domicile there has to be an
abandonment of the XXXXX domicile and the intent and establishment of a new
domicile. Respondent’s representative
stated that Petitioners retained sufficient ties in XXXXX to show that there
was no abandonment of XXXXX as their domicile.
Petitioners retained ownership and maintained their home in XXXXX during
the audit period. Petitioners were
listed in the phone directory at the home in XXXXX. They retained XXXXX drivers licenses and they moved back to XXXXX
to the same home in XXXXX after the audit period. Further, Respondent asserted that Petitioners did not establish a
new domicile pointing to the fact that Petitioners did not subject themselves
to XXXXX income tax laws.
Penalties
of 10% for late filing and 10% for late payment were also assessed against
Petitioners for each of the tax years at issue. Petitioner XXXXX explained that he had prepared his own taxes
during the period in question and did not understand fully what he was suppose
to do to comply with the tax laws.
DECISION AND ORDER
The
weight of the evidence indicates that Petitioners retained sufficient ties with
the State of Utah to show that they did not abandon their Utah domicile. Furthermore, the Commission feels that a new
domicile was not established in 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 through XXXXX. The Tax
Commission sustains the Statutory Notices of Deficiency issued for each of
these tax years as they pertain to tax and interest. Because Petitioners were relying on a good faith interpretation
of the law the penalties are waived for each of the years at issue.
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 10th 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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