NOTICE: IC § 6-8.1-3-3.5 and IC § 4-22-7-7 require the publication of this document in the Indiana Register. This document provides the general public with information about the Department's official position concerning a specific set of facts and issues. This document is effective on its date of publication and remains in effect until the date it is superseded or deleted by the publication of another document in the Indiana Register. The "Holding" section of this document is provided for the convenience of the reader and is not part of the analysis contained in this Letter of Findings.

For purposes of the Indiana individual income tax, although Individual neglected to change her mailing address for an income source, Individual provided sufficient documentation to show that Individual was not required to file 2011 and 2012 Indiana individual income tax returns because Individual was not an Indiana resident.

I. Indiana Individual Income Tax - Residency: Domicile.

Authority: IC § 6-3-1-3.5; IC § 6-3-1-12; IC § 6-3-1-13; IC § 6-3-2-1; IC § 6-3-2-2; IC § 6-8.1-5-1; Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); Indiana Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Scopelite v. Indiana Dep't of Local Gov't Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Wendt LLP v. Indiana Dep't of State Revenue, 977 N.E.2d 480 (Ind. Tax Ct. 2012); Croop v. Walton, 157 N.E. 275 (Ind. 1927); State Election Bd. v. Bayh, 521 N.E.2d 1313 (Ind. 1988); 45 IAC 3.1-1-21; 45 IAC 3.1-1-22.

Taxpayer protests the Department's proposed assessment for the 2011 and 2012 tax years.

The Indiana Department of Revenue ("Department") determined that Taxpayer was an Indiana resident for 2011 and 2012, that Taxpayer failed to file the 2011 and 2012 Indiana income tax returns, and that Indiana income tax was due.

Taxpayer disagreed with the assessment and submitted a protest to that effect. An administrative hearing was conducted during which Taxpayer explained the basis for the protest. This Letter of Findings results. Additional facts will be provided as necessary.

I. Indiana Individual Income Tax - Residency: Domicile.

The Department assessed Taxpayer income tax for the 2011 and 2012 tax years on the ground that Taxpayer had an Indiana Income Source. Thus, the Department deemed Taxpayer as an Indiana resident that failed to file the 2011 and 2012 Indiana income tax returns, and that the Indiana income tax was due.

Taxpayer contended that she was not required to file the 2011 and 2012 Indiana income tax returns because Taxpayer was not an Indiana resident. Specifically, Taxpayer asserted that she was domiciled in Ohio. Additionally, Taxpayer claimed that she was a resident in Ohio for 2011 and 2012 and filed the income tax returns reporting her income tax to Ohio.

The issue is whether, for 2011 and 2012, Taxpayer was an Indiana resident and therefore subject to Indiana income tax.

As a threshold issue, all tax assessments are prima facie evidence that the Department's claim for the unpaid tax is valid; the taxpayer bears the burden of proving that any assessment is incorrect. IC § 6-8.1-5-1(c); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007); Indiana Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012). Thus, taxpayers are required to provide documentation explaining and supporting their challenge that the Department's assessment is wrong. Poorly developed and non-cogent arguments are subject to waiver. Scopelite v. Indiana Dep't of Local Gov't Fin., 939 N.E.2d 1138, 1145 (Ind. Tax Ct. 2010); Wendt LLP v. Indiana Dep't of State Revenue, 977 N.E.2d 480, 486 n.9 (Ind. Tax Ct. 2012).

Indiana imposes a tax "on the adjusted gross income of every resident person, and on that part of the adjusted gross income derived from sources within Indiana of every nonresident person." IC § 6-3-2-1(a). IC § 6-3-2-2(a) specifically outlines what is income derived from Indiana sources and subject to Indiana income tax. For Indiana income tax purposes, the presumption is that taxpayers properly and correctly file their federal income tax returns as required pursuant to the Internal Revenue Code. Thus, to efficiently and effectively compute what is considered the taxpayers' Indiana income tax, the Indiana statute refers to the Internal Revenue Code. IC § 6-3-1-3.5(a) provides the starting point to determine the taxpayers' taxable income and to calculate what would be their Indiana income tax after applying certain additions and subtractions to that starting point.

For Indiana income tax purposes, resident "includes (a) any individual who was domiciled in this state during the taxable year, or (b) any individual who maintains a permanent place of residence in this state and spends more than one hundred eighty-three (183) days of the taxable year within this state. . . ." IC § 6-3-1-12; see also 45 IAC 3.1-1-21. Nonresident is "any person who is not a resident of Indiana." IC § 6-3-1-13.

Additionally, 45 IAC 3.1-1-22 states:

Thus, a new domicile is not necessarily created when individuals move to a new place. Rather, the individuals must move to the new place and have intent to remain there indefinitely.

In Croop v. Walton, 157 N.E. 275 (Ind. 1927), a taxpayer, Mr. Walton, moved from Sturgis, Michigan to Elkhart, Indiana by selling his Michigan residence and purchasing a residence in Indiana, where he and his wife lived for several years for the benefits of his wife's health. Indiana assessed Mr. Walton state income tax on his intangible property. Id. at 276-78. Mr. Walton disagreed, arguing that his intangible property was not subject to Indiana taxes because he was domiciled in Michigan. Id. The court found that Mr. Walton owned and managed a company and stores in Michigan; that Mr. Walton maintained his membership with lodges, clubs, and a church in Sturgis, Michigan; that Mr. Walton on various occasions exercised his civil and political rights in Sturgis, Michigan; and that Sturgis, Michigan was used in Mr. Walton's legal documents, including policies of insurance, mortgages, leases, contracts, and other instruments. Id. Ruling in favor of Mr. Walton, the court concluded that Mr. Walton did not change his domicile from Michigan to Indiana and his intangible property was not subject to certain Indiana taxes. Id. The court explained, in relevant part, that:

In State Election Bd. v. Bayh, 521 N.E.2d 1313 (Ind. 1988), the Indiana Supreme Court reiterated similar analysis and determined that Mr. Bayh met the residency requirement for the office of Governor because Mr. Bayh's domicile remained in Indiana even though Mr. Bayh moved to different states for various reasons for many years. Specifically, the court illustrated, in relevant part, that:

Taxpayer explained that she moved to Ohio for work and her only tie to Indiana was due to her using her mother's address to send bank statements following her move to Ohio. Due to her difficulty in receiving her bank statements and replacement cards during her move to Ohio, she was directed by a Bank representative to keep her mom's address, as that was the easiest way to ensure that Taxpayer received the necessary mail. During the protest process, Taxpayer submitted additional documentation to support her assertion that she was not an Indiana resident and did not owe any Indiana income tax for 2011 and 2012. Specifically, Taxpayer's supporting documents included:

• Ohio Driver's License

• Ohio BMV registration

• Ohio Tax returns

• Rental Statement for Ohio address

• Renter's Insurance Billing Statement covering Ohio Address

• Car Insurance Statement and cards sent to Ohio Address

• Electric bills at the Ohio Address

• Cable bills at the Ohio Address

Other than visiting family once or twice a year and neglecting to change her banking address, Taxpayer has no other attachment to Indiana. Upon review, Taxpayer's supporting documentation demonstrated that Taxpayer was not domiciled in Indiana in 2011 and 2012. While Taxpayer did not change the address of an income source from her mother's Indiana address, Taxpayer did not move back to Indiana, nor did Taxpayer spend 183 days or more in Indiana in 2011 and 2012.

In short, any individual who was domiciled in this state during the taxable year is a resident in this State. 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. In short, the Department agrees that Taxpayer met the burden of proof to demonstrate that she was not an Indiana resident for 2011 and 2012.

Taxpayer's protest is sustained.