99-0809

INCOME TAX

Signed 7/26/00

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, ) FINDINGS OF FACT,

) CONCLUSIONS OF LAW,

Petitioner, ) AND FINAL DECISION

)

v. ) Appeal No. 99-0809

) Acct. No. #####

AUDITING DIVISION OF )

THE UTAH STATE TAX ) Tax Type: Income Tax

COMMISSION, )

) Judge: Davis

Respondent. )

_____________________________________

Presiding:

G. Blaine Davis, Administrative Law Judge

Pam Hendrickson, Commissioner

Appearances:

For Petitioner: PETITIONER

For Respondent: Mr. Brian Tarbet, Assistant Attorney General

Ms. Becky McKenzie, from the Auditing Division

STATEMENT OF THE CASE

This matter came before the Utah State Tax Commission for a Formal Hearing on June 29, 2000. Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is income tax.

2. The years in question are 1995 and 1996.

3. Petitioner filed a Utah Resident Income Tax Return for the 1995 tax year. He reported a total of $$$$$ taxable income for that year.

4. For the 1995 tax year, the Internal Revenue Service received a form 1099 from Key Bank reporting that Key Bank had discharged Petitioner from a debt of $$$$$. This debt was discharged because of the sale of Petitioner's condominium in Boca Raton, Florida. Petitioner could not sell the condominium without a clear title, so the purchaser of the condominium negotiated a settlement with Key Bank. As a result of the settlement, Key Bank agreed to forgive Petitioner's debt in an amount of $$$$$.

5. The Internal Revenue Service added that amount to Petitioner's adjusted gross income for 1995, and information was then received by the Tax Commission of such adjustment. The Auditing Division thereafter made a similar adjustment to Petitioner's gross income for 1995 of an amount of $$$$$.

6. For the calendar year 1996, Petitioner received commissions for homes which he had sold while working as a sales representative for Intermountain Cedar Homes in Salt Lake City, Utah. Those commissions were received while his employment was based in Salt Lake City, Utah and while his mailing address was Salt Lake City, Utah. Further, Petitioner had filed a resident income tax return for the prior year, and later returned to Utah after having left the state during the year 1996. However, the Commission finds that his domicile remained in Utah. His mail continued to be received in Utah, and there is no evidence that he either abandoned his domicile in Utah or established a domicile elsewhere.

7. Petitioner did not file a 1996 Utah Individual Income Tax Return, and consequently did not report the commissions earned while working in Salt Lake City, Utah.

APPLICABLE LAW

1. A resident individual means an individual who is either domiciled in this state for any period of time during the taxable year, or who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate 183 or more days of the taxable year in this state. (Utah Code Ann. '59-10-103(1)(j).)

2. "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 returning. It is the place in which a person has voluntarily fixed the habitation of himself and family, not for a mere special 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 Administrative Code R865-9I-2.D.

3. A person's intentions are determined by his or her actions, and not by verbal declarations.

DECISION AND ORDER

Based upon the foregoing, the Tax Commission finds that Petitioner was domiciled in Utah in 1995 and 1996. Petitioner had income for 1995 which was not included on his 1995 income tax return, and that Petitioner had income from within the State of Utah which required the filing of a Utah Individual Income Tax Return for 1996, but Petitioner failed to file such a return. Based thereon, the Commission sustains the audit assessment made by Respondent, and denies the Petition for Redetermination of Petitioner. It is so ordered.

DATED this __26___ day of ____July________, 2000.

______________________________________

G. Blaine Davis

Administrative Law Judge

BY ORDER OF THE UTAH STATE TAX COMMISSION:

The Commission has reviewed this case and the undersigned concur in this decision.

DATED this __26___ day of __July__________, 2000.

Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner

Palmer DePaulis Marc B. Johnson

Commissioner Commissioner

Notice of Appeal Rights: You have twenty (20) days after the date of this order to file a Request for Reconsideration with the Tax Commission Appeals Unit pursuant to Utah Code Ann. '63-46b-13. A Request for Reconsideration must allege newly discovered evidence or a mistake of law or fact. If you do not file a Request for Reconsideration with the Commission, this order constitutes final agency action. You have thirty (30) days after the date of this order to pursue judicial review of this order in accordance with Utah Code Ann. ''59-1-601 and 63-46b-13 et. seq.