Utah ~ Personal Income Tax: Nonresident Status Not Established as Taxpayers Were Not Legally Separated

CCH Tax Day Report

A taxpayer couple’s petition against an additional assessment of Utah individual income tax and interest was denied because the couple failed to establish that they were legally separated and that only one of them was domiciled in Utah. Under Utah law, if one spouse is a domiciliary of Utah, then the other will also be deemed a domiciliary of Utah for individual income tax purposes, unless they divorce, legally separate or file a married filing separate federal return. In this case, although the taxpayers were living separately under the terms of their “covenant marriage” before filing for divorce, they were unable to establish that they were ” legally separated.” Furthermore, the taxpayers did not obtain a legal divorce and also did not file their federal return as married filing separately, and accordingly their protest was denied. Additionally, there was no waiver of interest as the taxpayers failed to prove error on the part of the Tax Commission.

Commission Decision, Appeal No. 15-1200, Utah State Tax Commission, May 23, 2016, released August 3, 2016, ¶401-198

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