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Taxpayers protest the Department's proposed assessment of Indiana individual income tax for the 2009 through 2011 tax years. The Department based its determination on the grounds that Taxpayer had an Indiana residence, an Indiana driving license, an Indiana registered vehicle, and was registered to vote in Indiana.
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As discussed above, "resident" includes any individual who was domiciled in this state during the taxable year. IC § 6-3-1-12(a). "A change of domicile requires an actual moving with an intent to go to a given place and remain there. It must be an intention coupled with acts evidencing that intention to make the new domicile a home in fact. . . . [T]here must be the intention to abandon the old domicile; the intention to acquire a new one; and residence in the new place in order to accomplish a change of domicile." Bayh, 521 N.E.2d at 1317-18.
For years Taxpayers had been filing Indiana income tax returns. In 2005, Taxpayer was relocated abroad for a few years. Taxpayer's spouse and children remained in Indiana. Taxpayers retained their residence in Indiana and continued to file Indiana income tax returns.
In late 2008, Taxpayer returned to the United States. Since then and including the years at issue, Taxpayer first took employment in Texas and then in D.C. while his family remained in Indiana at their residence in Indianapolis. Taxpayer purposely retained his Indiana driver's license, his Indiana voter registration, and his vehicle registration in Indiana as an expression, according to him, of his commitment to the state. While Taxpayer rented an apartment in Texas, he made frequent weekend trips back to Indiana to be with his family. During this time Taxpayers filed IT-40PNRs reporting modest Indiana income, but significantly not including Taxpayer's high income on the Indiana returns. Taxpayer was under the impression, with the advice of counsel, that because his income was earned in Texas it did not have to be reported in Indiana. Texas does not impose an income tax on income earned in Texas, so Taxpayer believed he was reporting correctly.
As the statement of law and discussion of case law above demonstrate, apart from the facts that establish a person's domicile, domicile is also a state of mind. Taxpayer's facts and circumstances clearly illustrate that Taxpayer's domicile remains in Indiana. Taxpayer may have chosen a "commuter" lifestyle, as he explains, in order to "secure employment at a level of compensation commensurate with [his] professional credentials"; however, all the indicia of where an individual chooses to be counted point to Indiana as Taxpayers' domicile. Taxpayers have given no indication that they intend to change their domicile to another state. To the contrary, Taxpayers have chosen to maintain their ties to Indiana.
In short, given the totality of the circumstances, in the absence of other supporting documentation, Taxpayers were domiciled in Indiana during 2009, 2010, and 2011. Therefore, Taxpayers should have continued to file Indiana income tax returns during 2009, 2010, and 2011.
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Taxpayers provided sufficient documentation to demonstrate that their failure to pay tax was not due to negligence.
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Taxpayer protests the imposition of interest. Under IC § 6-8.1-10-1(e) interest cannot be waived by the Department.
