95-1490
Income Tax
Signed 7/25/96
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
XXXXX,
Petitioner, : ORDER
:
v. : Appeal No. 95-1490
:
AUDITING
DIVISION OF THE : Account No. XXXXX
UTAH STATE TAX COMMISSION, :
:
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. G. Blaine Davis, Administrative Law Judge,
heard the matter for and on behalf of the Commission. Present and representing Petitioner was XXXXX, Certified Public
Accountant. Present and representing
Respondent were XXXXX of the Auditing Division.
For
the year XXXXX, Petitioner XXXXX was a non-resident of Utah, and Petitioner
XXXXX was a part-year resident of Utah.
For the XXXXX tax year, Petitioners XXXXX filed a joint federal income
tax return. For that year, XXXXX filed
a part-year resident return as a separate return and received a refund of
$$$$$. That return contained the social
security number of XXXXX instead of XXXXX.
Petitioners were then advised that they should have filed a married
filing joint return on form TC-40NR.
Following those instructions, Petitioners then filed a joint non-resident/part-year
resident return on XXXXX. That return
showed a balance due of $$$$$ plus interest and a late payment penalty for a
total amount due of $$$$$, and payment was made of that amount, except for $$$$$,
on XXXXX.
Thereafter,
Petitioner XXXXX filed an amended return which was on the same basis as the
original return. That amended return
would have provided a refund but Respondent recommended that the amended return
be disallowed.
The
issue in this case is whether or not Petitioner was entitled to use
"Special Instruction II" where one spouse is clearly a non-resident
and the other spouse was only a part-year resident.
The
position of Petitioners is that they should be entitled to file a separate
return for XXXXX and to apply Special Instruction II on a part-year resident
return. They argue that this is
allowable by the provisions of Utah Code Annotated §59-10-503(2), which
provides as follows:
If either husband or wife is a resident and the other is a
non-resident, they shall file separate income tax returns in this state on such
forms as may be required by the Commission, in which event their tax liability
shall be several. They may elect to
determine their joint taxable income as if both were residents, in which event
their tax liability shall be joint and several.
Special
Instruction II as set forth in the instruction booklet for the filing of income
tax returns is based upon the above statute.
Petitioners argue that the statute does not limit the availability of
those provisions to only full-time residents, so it must include part-year
residents as well as full-year residents.
The
title to the Special Instruction II set forth in the Individual Income Tax
Forms and Instructions for XXXXX, on page 8 of those instructions, states as
follows: "PROCEDURE WHEN ONE SPOUSE IS A RESIDENT AND THE OTHER IS A
NONRESIDENT OR PART-YEAR RESIDENT."
In
the view of the Commission, the instruction is sufficiently clear in
distinguishing which provisions apply to residents and which provisions apply
to part-year residents. In all cases in
which instructions are given for part year residents, the term "part-year
resident" is used. Without
exception the term "resident" is used to define taxpayers who are
deemed to be residents of the state of Utah for the full year, and who are not
residents of any other state for any portion of the year for income tax
purposes. Accordingly, the Commission
determines that Special Instruction II is available only where one spouse is a
full-year resident, and the other spouse may be either a non-year resident or a
part-year resident. Special Instruction
II is not available when one spouse is a non-resident and the other spouse is a
part-year resident.
DECISION AND ORDER
Based
upon the information presented at the hearing, and the records of the Tax
Commission, the Commission finds that the determination of the Auditing
Division to disallow the amended return of Petitioners in which Special
Instruction II was utilized was a correct determination by the Auditing
Division, and the Petition for Redetermination filed herein by Petitioners
should be, and hereby is denied.
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 25 day of July, 1996.
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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