96-0756

Income

Signed 3/19/97

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, :

Petitioner, : ORDER

v. : Appeal No. 96-0756

AUDITING DIVISION OF THE : AUDIT PERIODS: 1990, 1991, 1992

UTAH STATE TAX COMMISSION, : and 1993

Respondent. : Account No. #####

_____________________________________

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 February 11, 1997. Gail S. Reich, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner was PETITIONER. Present and representing Respondent were Dan Engh and Frank Hales of the Auditing Division.

This matter involves 1990, 1991 and 1992 income tax years. Petitioner did not file a Utah return for 1990 and 1991. Petitioner did file for 1992 but excluded income she had earned overseas. Petitioner contends that she is not required to file a Utah Individual Income Tax Return for 1990 and 1991 and that her 1992 return was correct. Petitioner was employed by the XXXXX in a civilian capacity as a teacher overseas. Petitioner states that she was employed overseas and that her income should not be taxable income. Petitioner further states that she had contacted the Utah State Tax Commission concerning whether or not she needed to file returns and claims that she was told that her overseas income was not taxable to Utah. Petitioner has been a teacher in Utah in the 1950's and left in the late ‘50's or early ‘60's to commence employment with the XXXXX. In 1983 she went to XXXXX on assignment. Petitioner has stated that the Tax Commission had informed her in September of 1988 that she did not have tax liability for the income generated in XXXXX. In 1989, 1990 and 1991, she continued in the same place for the same reasons and assumed she had no tax liability. During the period in issue Petitioner continued to use her XXXXX address on all of her tax forms for the federal government. She maintains a Utah Driver’s License which she indicated she needed when she returns to Utah for visits. She had her federal tax prepared in Utah during the years in issue. Although a civilian employee XXXXX she maintained a home of record in Utah. She did not pay taxes in any other jurisdiction or any other country. She travels on a United States Passport and retains United States Citizenship. She maintains a bank account in Utah, conducted all her financial business from Utah. She obtained a user license for driving in foreign countries based on her Utah Driver’s License. For 1990 Petitioner has $$$$$ of tax due with $$$$$ of penalty imposed and approximately $$$$$ of interest having accrued. For 1991 Petitioner has $$$$$ of tax due with $$$$$ of penalty and approximately $$$$$ of interest having accrued. For 1992 Petitioner has $$$$$ of tax imposed with no penalty having been entered and approximately $$$$$ of interest having accrued. Upon retirement on July 1, 1992, Petitioner returned to Utah.

It is Respondent’s position that Petitioner left for the purpose of employment only and maintained Utah as the home of record and official domicile without abandoning it for another.

According to Utah State Tax Commission Administrative Rule R865-9-2I(D) domicile is defined as follows:

“Domicile means the place where an individual

has a true, fixed, permanent home and principal

establishment, and to which place he has

(whenever he is absent) the intention of re-

turning. It is the place in which a person has

voluntarily fixed the habitation of himself and

family, not for mere special or temporary

purpose, but with the intention of making a

permanent home. After a 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.”

The Commission Rule incorporates the common law requirement that, in order to change domicile, there must be an abandonment of the former domicile and an establishment of a new one. A domicile once established is presumed to continue until a new one is established, the burden of proving a change in domicile rests on the person who asserts it unless shown by substantial evidence. In order to establish a domicile a party must show both actual residence in a locality and intent to remain there permanently. In the instant case there is no evidence the Petitioner established a true, fixed, permanent home and principal establishment that was not for a mere special or temporary purpose but rather with the intent to make a permanent home. An absence from one’s domicile because of work or employment does not bring about a change of domicile.

DECISION AND ORDER

The Commission has reviewed the entire matter and the positions of both the Petitioner and Respondent. Based upon the information presented at the hearing and the records of the Tax Commission, the Commission finds that Petitioner has not established an abandonment of the Utah domicile and that state tax was due for the years in issue. However, Petitioner has provided credible testimony of previous Tax Commission error regarding her status which in these circumstances justifies waiver of the penalty and interest.

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 19 day of MARCH, 1997.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

W. Val Oveson Richard B. McKeown

Chairman Commissioner

Joe B. Pacheco Alice Shearer

Commissioner Commissioner