98-038
Response
May 26, 1998
REQUEST
LETTER
May
6, 1998
Dear
Ms. Solarczyk:
I
am writing you in regards to a matter that was discussed with an auditor at the
Tax Commission several weeks ago. I was
advised to write you so that I might obtain a letter of finding. The issue is the tax status of my ex-wife
and I from 1992 to 1995. We had resided
in Utah since 1981 and were married in 1988.
From 1991 to 1995 I attended medical school in STATE while my ex-wife
(NAME) worked for XXXXX. During this
period we owned and maintained our home at ADDRRESS in CITY. We returned to it
whenever our schedules permitted which was generally 1-3 times a year. In addition, we registered our vehicles,
held and renewed drivers licenses,
insured the vehicles, voted by absentee ballot, paid property taxes,
received mail, and maintained bank accounts within the State of Utah during
this period of time. I did not work
during this period due to the demands
of medical school, but filed a joint tax return with NAME. We did not file a return with the State of
Utah, but did pay income tax in the State of STATE.
It
had always been our stated intent to return to Utah following the completion of
my medical
training.
In 1994 I experienced marital difficulties with NAME which subsequently
resulted in
filing
for divorce in 1995 despite my genuine desire to save our marriage.
I returned to Utah to
begin
my internship at XXXXX in June 1995, but NAME stayed in STATE. Since that
time
there has been tremendous legal strife over who has jurisdiction in the matter. NAME's
attorney
has maintained that we had no connections with the State of Utah and that all
matters
should
be settled by a STATE court. In an
attempt to force me to yield to his wishes he has
used
visitation with my son as a lever. This matter is now before the courts and
therefore, it
would
be extremely helpful to know the position of the Tax Commission as to our
residency
status
with regards to taxes during this period of time. I await your reply and
will happily answer any questions that you might have.
Sincerely,
NAME
May
26, 1998
NAME
ADDRESS
CITY
STATE ZIP
RE: Advisory
Opinion - Residency Status for Income Tax Purposes
Dear
NAME,
We have received your request for an
advisory opinion concerning your residency status for purposes of Utah income
taxes for the years 1992 through 1995.
Utah Code Ann. §59-10-103(1)(j) provides that an individual is a
resident of Utah for income tax purposes if he or she is domiciled for any
period of time during the taxable year.
For purposes of determining whether an individual is domiciled in this
state, Utah Admin. Code R865-9I-2 provides that "domicile" shall
mean:
(D) the place where an individual has a true, fixed,
permanent home and principal establishment, and to which place he or she has
(whenever he or she is absent) the intention of returning. It is the place in which a person has
voluntarily fixed the habitation of himself or herself and family, not for a
mere special or temporary purpose, but with the present intention of making a
permanent home.
From the facts you present, it
appears that you were domiciled in Utah prior to attending medical school in
STATE in 1991. Your specific request
concerns the period you attended medical school. Rule R865-9I-2(D) provides that once 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 or her domicile,
a new domicile must be shown.
Determination of domicile is one of
fact. O’Rourke v. State Tax Comm’n,
830 P.2d 230 (Utah 1992). In
determining whether a party has residency under Utah law, a party’s activities
are given greater weight than his or her declaration of intent. Allen v. Greyhound Lines, Inc., 583
P.2d 613 (Utah 1978). Thus, in
determining your residency status, the Tax Commission would look at your actual
activities as evidence of your intent instead of your declarations of intent.
You have listed in your letter a
number of substantial contacts you and your ex-wife maintained with Utah during
the time you attended school in STATE.
These activities would all support a claim that you did not abandon your
Utah domicile.
However, you also indicate that,
during the years you attended school, income tax returns were filed in STATE,
not Utah. An income tax return is
required to be filed not only in the state where the income is earned, but also
in the state of domicile. Not filing a
tax return in Utah during these years is an action that could lend support to a
claim that you and your ex-wife abandoned your Utah domicile.
Nevertheless, the facts presented in
your letter, when considered in the whole, strongly suggest that you did not
abandon your Utah domicile. Based on
these facts alone, we would determine that you and your ex-wife were domiciled
in Utah during the years you attended school in STATE. But, this ruling is only valid for the facts
as presented in your letter. Should any
other facts or activities exist that are relevant to a determination of
domicile, they would need to be factored into our decision.
As mentioned earlier, any person domiciled
in Utah must file a Utah income tax return.
If you did not file a Utah return while domiciled in Utah, you should do
so now for each year you did not file.
Income taxes paid to STATE will be credited against any amounts that may
be owed to Utah.
Please contact us if you have any
other questions.
For
the Commission,
Joe
B. Pacheco
Commissioner
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