Could a taxpayer obtain late reconsideration of a 2014 domicile ruling or avoid 2015 Virginia residency with evidence of a 2016 out-of-state condo?

Plain-English summary

A taxpayer sought late reconsideration of a 2014 Virginia domicile ruling and separately challenged a 2015 assessment using evidence of a condo bought elsewhere in 2016.

Both challenges failed: the first was outside 45 days, and the later condo did not prove abandonment of Virginia during 2015.

Two separate reasons

The 2014 reconsideration request came months after the 45-day deadline, leaving the prior ruling final.

For 2015, Virginia license, vehicle, voter, and return-to-Virginia facts continued. The taxpayer's 2016 purchase and family reason for returning did not establish that her Virginia domicile had ended during the earlier year.

Filing could correct the amounts

Virginia directed the taxpayer to file resident returns for both years. The Department would adjust its best-information assessments as appropriate, including any valid other-state tax credit.

What this means for you

• A reconsideration request has its own 45-day deadline.
• Later property purchases may not prove domicile in an earlier year.
• Sympathetic reasons for returning do not replace objective domicile evidence.
• File returns to replace estimates even after residency is decided.

Common questions

Q: Could Virginia extend the reconsideration deadline?

A: The ruling treated the late request as barred and the prior determination as final.

Q: Did the condo establish State A domicile for 2015?

A: No. It was purchased in 2016 and did not overcome the continuing Virginia ties.

Citations and references

• 23 VAC 10-20-165(F) — reconsideration period
• Va. Code §§ 58.1-111, 58.1-332(A) — assessment and credit
• Prior determination discussed: P.D. 18-156

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 19-28

Original ruling text

April 8, 2019

Re: § 58.1-1821 Appeal: Individual Income Tax

Dear *:

This will respond to your letter in which you seek reconsideration of the Department’s determination letter, issued as Public Document (P.D.) 18-156 (8/8/2018). You also appeal the individual income tax assessment issued to * (the “Taxpayer”) for the taxable year ended December 31, 2015.

FACTS

In P.D. 18-156, the Department found that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2014 taxable year. Subsequently, an assessment was issued to the Taxpayer for the 2015 taxable year as well. The Taxpayer requests that the Department reconsider its determination, contending she was a resident of * (State A).

DETERMINATION

Reconsideration – Taxable Year 2014

Under Title 23 of the Virginia Administrative Code (VAC) 10-20-165 F, a taxpayer who disagrees with the Tax Commissioner’s final determination may request a reconsideration of the determination within 45 days. The Taxpayer’s request for reconsideration is dated November 20, 2018, and was not received by the Department until December 20, 2018, both well after the 45-day period expired. Therefore, P.D. 18-156 is upheld, and the assessment for the 2014 taxable year remains due and payable. This letter constitutes the Department’s final determination as to the assessment for the 2014 taxable year.

Appeal – Taxable Year 2015

In P.D. 18-156, the Department found that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2014 taxable year because she failed to abandon her Virginia domicile. The Department cited factors such as the Taxpayer’s Virginia vehicle registration, Virginia driver’s license, Virginia voter’s registration, and the Taxpayer’s relocation back to Virginia as evidence of her Virginia domicile. Those factors continued to exist for the 2015 taxable year as well.

The Taxpayer provided additional evidence with her appeal, showing that she purchased a condo in State A in 2016. The Taxpayer also states that she only returned to Virginia because of a family member’s illness. While I am sympathetic to the circumstances surrounding the Taxpayer’s return to Virginia, the new information provided is insufficient for the Department to reach a different conclusion for the 2015 taxable year than for the 2014 taxable year. The Taxpayer, therefore, remained taxable as a domiciliary resident of Virginia during the 2015 taxable year.

CONCLUSION

For the reasons outlined in P.D. 18-156, the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2014 and 2015 taxable years. The assessments at issue were made based on the best information available pursuant to Virginia Code § 58.1-111. The Taxpayer, however, may have information that better represents her Virginia income tax liability for the taxable years at issue. Therefore, she should file both a 2014 and a 2015 Virginia resident individual income tax return to more accurately reflect her Virginia tax liability. The Taxpayer should be aware that she may claim a credit on her Virginia return for taxes paid to another state pursuant to Virginia Code § 58.1-332 A. Instructions for claiming the credit can be found in P.D. 18-156.

The returns should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *. Upon receipt, the returns will be reviewed, and the assessments will be adjusted, as appropriate. If the returns are not received within the allotted time, the assessments will be adjusted based on the information available.

The Code of Virginia sections, public document and regulation cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s web site. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

Related Documents

12-139

14-136

18-156