Did a missionary remain domiciled in Virginia because he kept a Virginia license, voter registration, and mailing address while living abroad?

Subject

Missionary's foreign home and family outweighed Virginia license and mail ties

Plain-English summary

Virginia found that the missionary was domiciled abroad and abated his 2006 income-tax assessment. He had moved to the foreign country in July 2003, accepted full-time employment there, rented a permanent home, and lived there with his spouse and children.

He said he spent the entire 2006 year abroad and used his parents' Virginia address only for mail. Those facts supported the foreign domicile.

There were meaningful Virginia ties: tax documents went to the Virginia address, he had been registered to vote in Virginia since 1996, and he obtained a Virginia driver's license in 2003 and renewed it in December 2006. Virginia treated obtaining or renewing that license as a strong residency indicator.

After weighing everything, the Department concluded that the foreign home, work, family, and presence established domicile outside Virginia. It warned that keeping the Virginia license, using a Virginia address for primary financial documents, or developing other permanent-residence indicators would likely cause future contacts and could change later-year results.

What this means for you

• A foreign domicile can be established through full-time work, a permanent home, family residence, and sustained physical presence.
• A Virginia license, voting record, and mailing address remain serious contrary evidence.
• No single fact controls; the whole pattern of conduct and intent matters.
• Continuing Virginia ties can create recurring audit questions even after one favorable year.

Common questions

Was the taxpayer in Virginia during 2006?

He stated that he spent the entire year abroad.

Did the Virginia driver's license prevent relief?

No, but Virginia treated it as a strong contrary indicator.

What happened to the assessment?

It was abated.

Citations and references

• Va. Code §§ 58.1-302 and 46.2-323.1.
• Virginia Public Documents 00-151 and 02-149.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 10-53

Original ruling text

May 7, 2010

Re: § 58.1-18.21 Application: Individual Income Tax

Dear *:

This is in response to your letter in which you appeal the individual income tax assessment issued to * (the "Taxpayer") for taxable year ended December 31, 2006.

FACTS

The Department received information from the Internal Revenue Service that tax documents for the 2006 taxable year were sent to the Taxpayer at a Virginia address. Additional information indicated the Taxpayer maintained a Virginia driver's license and was also registered to vote in Virginia. The Department requested additional information from the Taxpayer in order to determine his residence for the tax year in question. When no response was received, the Department issued an assessment for income tax for the 2006 taxable year.

The Taxpayer contests the assessment, asserting that he has been an employee of a missionary organization in * (Country A) since 2003. The Taxpayer states his spouse and children resided with him in Country A, and he used his parents' address only to receive mail.

DETERMINATION

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Cede § 58.1-302. The domiciliary residence of a person means the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia.

In order to change from one legal domicile to another legal domicile, there must be (1) actual abandonment of the old domicile, coupled with intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and intent to remain there permanently or indefinitely. The burden of proving that the domicile has been changed lies with the person alleging the change.

In determining domicile, consideration may be given to the individual's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, profession or employment, income sources, residence of spouse, marital status, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine the person's domicile. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.

The Department determines a taxpayer's intent through the information provided. The taxpayer has the burden of proving that he or she has abandoned his or her original domicile. If the information is inadequate to meet this burden, the Commissioner must conclude that the taxpayer did intend to return to his or her original domicile.

The Taxpayer had previously established domicile in Country A in 2003. He moved to Country A in July 2003, he accepted full-time employment there, rented a permanent place of abode, and resided with his family in Country A. The Taxpayer states he was never in Virginia in 2006, spending the entire year in Country A.

The Taxpayer also engaged in several activities indicating a change to a Virginia domicile. He had tax documents mailed to a Virginia address. He was registered to vote in Virginia since 1996 and in May 2003, the Taxpayer acquired a Virginia driver's license. Furthermore, the Taxpayer renewed his Virginia driver's license in December 2006.

Virginia Code § 46.2-323.1 states, "No driver's license . . . shall be issued to any person who is not a Virginia resident." Every person applying for a driver's license must execute and furnish to the Commissioner of the Department of Motor Vehicles a statement that certifies the applicant is a Virginia resident. A person providing a false statement is subject to punishment under the laws of the Commonwealth. The Department has found that an individual may successfully establish a domicile outside Virginia even if they retain a Virginia driver's license. See Public Document (P.D.) 00­151 (8/18/2000). However, obtaining or renewing a Virginia driver's license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/09/2002).

After reviewing all the evidence in this case, I find that the Taxpayer was not a domiciliary resident of Virginia and not subject to Virginia income tax for the 2006 taxable year. As such, the assessment has been abated.

While the Department concedes the Taxpayer's Country A residency for the taxable years at issue, the Taxpayer should be aware that continuing connections with Virginia, such as possession of a Virginia driver's license, using a Virginia address for primary financial documents, or other indicators of a permanent residence in Virginia, will likely continue to result in future contacts by the Department with respect to the situs of the Taxpayer's domicile. As in any determination, a change in the facts and circumstances could result in a change in the Department's determination in subsequent taxable years.

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

Sincerely,

Janie E. Bowen

Tax Commissioner

AR/1-3829616927.D