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Topic Code: D191Domicile and Residency (I)(Inh)           Document Reference: 03201057

June 18, 2003

E. Neils Mickelson

2510 N. 4th St.

Flagstaff, AZ 86004

RE: Ernest J. and Eugena M. Johnson

Docket No. 02-20-1-0195

Dear Mr. Mickelson:

The Iowa Department of Revenue and Finance has reviewed the above-referenced protest. This letter states the departmentís position in this matter.

The issue in this case is the residency of Eugena Mickelson-Johnson. She and Ernest J. Johnson filed Iowa income tax returns for 1999, 2000, and 2001 using married filing separately on a combined return status. She claimed a nonresident credit each year. Information obtained by the department indicated they both had an Iowa driverís license and voted in Iowa. Mr. Johnson has a house in Iowa and claims a homestead credit for property tax purposes. Department rule 701 IAC 38.17 states that married persons are presumed to be residents of the same state. Therefore, the department denied the nonresident credits claimed by Mrs. Mickelson-Johnson in each of the three years and issued Notices of Assessment.

The departmentís review of this case finds these additional facts. The Johnsons were married in 1997. Prior to that time, Mr. Johnson had been a long-time resident of Iowa and Mrs. Mickelson-Johnson had been a life-long resident of Arizona. Once together, they began spending winters in Arizona and summers in Iowa, with approximately an equal number of days in each state. Prior to marriage, each had his/her own home in his/her own state. This did not change once they were married. Nobody sold or abandoned their home. There does not appear to be any particular reason why Mrs. Mickelson-Johnson obtained an Iowa driverís license and registered to vote here. She did not have any Iowa source income. She maintained her Arizona church membership and Arizona doctors, and continued to register a vehicle in Arizona. It appears the only difference once she got married was that she began spending time in another state.

Despite the presumption that married persons are residents of the same state, the departmentís position in this case is that the taxpayers have overcome that presumption. Mrs. Mickelson-Johnson did not abandon her Arizona residence or domicile, and Mr. Johnson did not abandon his Iowa residence and domicile. Neither intended to change residency. The departmentís position is that the protesters were residents of different states for the years in question. Therefore, the nonresident credits are allowed, the assessments will be canceled, and the protest is sustained.

I will notify the Director that this protest has been resolved in favor of the protesters, no issues remain, and the case may be closed.

If you have any questions, please feel free to contact Jeff Aten at (515)281-6463 or jeff.aten@idrf.state.ia.us.


Jim McNulty, Program Manager

Audit Service Section

Compliance Division