Lane-Burslem v. Comm'r of Internal Revenue

• Decision Date: 03 August 1978
• Docket Number: Docket No. 934-75.
• Citation: 70 T.C. 613
• Parties: IONA SUTTON LANE-BURSLEM, PETITIONER v. COMMISSIONER of INTERNAL REVENUE, RESPONDENT
• Court: U.S. Tax Court

70 T.C. 613

IONA SUTTON LANE-BURSLEM, PETITIONER

v.COMMISSIONER of INTERNAL REVENUE, RESPONDENT

Docket No. 934-75.

United States Tax Court

Filed August 3, 1978.

Petitioner was domiciled in Louisiana, but was employed overseas as a teacher by the Department of Defense. After marrying an Englishman, she resided with her husband while in England but continued taking summer vacations alone in Louisiana. Petitioner at all times had a fixed intent to return to Louisiana after her retirement. Held: Petitioner has failed to show that Louisiana law would operate in such a manner that its community property laws would apply to her husband. Therefore, petitioner is taxable on her entire income. Robert E. Falb, for the petitioner.

Paul E. Vignone, for the respondent.

IRWIN, Judge:

Respondent determined deficiencies in petitioner's income taxes for the calendar year 1971 in the amount of $1,296.22.

Due to other concessions, the only issue remaining for our consideration is whether petitioner is domiciled in Louisiana and, therefore, subject to the income tax treatment of a domiciliary of a community property State.

FINDINGS OF FACT

Some of the facts have been stipulated. The stipulation of facts, together with the exhibits attached thereto, are incorporated herein by this reference.

At the time her petition was filed Iona Sutton Lane-Burslem (hereafter petitioner) resided in Upper Heyford, England.

Petitioner filed her Federal income tax return using the married, filing separate, status, for the calendar year 1971 with the Internal Revenue Service Center at Austin, Tex. The address indicated on the return was Natchitoches, La.

Petitioner is a native-born citizen of the United States and until 1951 was at all times domiciled in Louisiana. She is certified to teach in the public schools of Louisiana, and as a result, is qualified to teach in schools operated overseas by the United States Government for American dependents. Except for 1 year (1949-50) in which she lived in San Francisco, Calif., petitioner resided continuously in Louisiana from the time she was born (1922) until 1951, at which time she became employed overseas by the United States Government as a secondary school teacher.

Except for the school year 1955-56, petitioner has been stationed in Europe. Since 1972, petitioner has been stationed at the Upper Heyford American High School, a United States Air Force dependents' school, situated at the Upper Heyford Air Base, a North American Treaty Organization (hereafter NATO) facility in England. Prior to 1972 she taught at American dependents' schools in High Wycombe, England (1971 to 1972, inclusive); Watford, England (1962 to 1970, inclusive); London, England (1961 to 1962, inclusive); Morocco (1959-60); London, England (1957 to 1959, inclusive); Frankfurt, Germany (1956 to 1957, inclusive); Stuttgart, Germany (1954-55); Frankfurt, Germany (1952-54, inclusive); and Heidelberg, Germany (1951-52). Initially, changes in petitioner's duty stations were made at her request to satisfy her desire to live and work in different cities. The more recent transfers, however, resulted from actual or anticipated closings of NATO air bases and reductions in military and civilian forces in England.

Petitioner is employed on a year-to-year basis for a minimum term of 1 school year, consisting of 190 days. She is entitled to receive, at Government expense, transportation for herself and her family and movement and storage of her household goods and personal effects if she agrees to complete a 2-year tour of duty. She is also entitled to retire at age 60; retirement benefits are measured by average compensation during the 3 years in which she receives the highest pay. She will receive maximum benefits only if she remains with the Department of Defense until retirement. To petitioner's knowledge, she would be unable to obtain comparable employment as a teacher with the Department of Defense anywhere in the United States (although she could teach school in Louisiana).

As an employee of a civilian component of the United States Armed Forces, under the NATO Status of Forces Agreement, petitioner is not a resident or domiciliary of the United Kingdom for purposes of taxation.

In 1964, petitioner married Eric Lane-Burslem (hereafter Eric), a British national who resides and is domiciled in England and a nonresident alien with respect to the United States. Eric was employed as an executive engineer until 1969. His immediate family consists of two brothers, two sisters, a daughter by a prior marriage, and four grandchildren. Eric's daughter and his four grandchildren reside in Germany. He visits them about once a year and would maintain this relationship if he moved to Louisiana. Eric has lived in numerous countries during his career as a professional airline pilot, and does not have any particularly strong attachments to England.

The Lane-Burslems live in a home in Oxfordshire, England. The property is owned solely by petitioner, having been purchased with funds provided by the United States Government as a housing allowance in lieu of furnishing Government-owned living quarters. Prior to 1972, petitioner owned a house in Northwood, where she and Eric lived while she taught at High Wycombe; before that she owned a house in Harrow, where they lived while she taught at Watford. Prior to the purchase of the house in Harrow in 1963, petitioner lived in accommodations furnished by the Government at her various posts of employment, or rented other houses (except for 1955-56 when she was not in Europe). The Northwood and Harrow houses were sold as a consequence of the changes in petitioner's posts of employment. If petitioner sells her real property when she retires, she would repatriate the proceeds of sale. Petitioner has been specifically authorized by the Bank of England to repatriate such proceeds free of British currency controls.

Prior to 1966, the question of the couple's residence after their retirement had not been considered or discussed. When petitioner's mother visited the Lane-Burslems in England in 1966, she told Eric that she expected him, as a member of the Sutton family, to be interred in the family cemetery plot in Natchitoches. Eric readily agreed to this.

Petitioner intends to remain in England until approximately 1981 or 1982, at which time she intends to retire. At that time, Eric, who is 16 years older than petitioner, will be 76. The Lane-Burslems will not suffer any economic loss if they return permanently to Louisiana after petitioner's retirement. Eric retired as an executive engineer in 1969, but obtained part-time employment as a sales manager until 1972, at which time he was earning about $5,000 annually. He gave up all employment in 1972 as a result of petitioner's transfer from the High Wycombe school to Upper Heyford. Eric's pension will be paid to him notwithstanding permanent residence in the United States. Neither Eric nor petitioner owns any business or investment assets in the United Kingdom. Other than an annual fox hunt, the Lane-Burslems belong to no clubs or social organizations in the United Kingdom, other than those connected with petitioner's employment. In accordance with the Status of Forces Agreement, petitioner abstains from all political activity in the United Kingdom. Petitioner does maintain a sterling account with a bank in England, such account being necessary to purchase items from English merchants.

Central Louisiana has been the seat of petitioner's family for several generations. Her family there, at the time of trial, consisted of her mother, Mrs. J. W. C. Sutton; her sister, Mrs. M. S. Matthews, both of whom resided in Natchitoches; and three brothers, two of whom lived in Alexandria, La., and a third in Lafayette, La. Petitioner also had six nieces and nephews and five grandnieces in Louisiana.

Petitioner was educated in Louisiana. She received her high school diploma from Belcher High School, Belcher, La., in 1939, and her bachelor of arts degree from Northwestern State University in Natchitoches in 1942. Petitioner also earned a master of arts in education from Louisiana State University, Baton Rouge, La., in 1951, and obtained 30 credits beyond her M. Ed. by attending courses at Northwestern State University during the summers of 1972 to 1974, inclusive.

Petitioner normally returns to Natchitoches each summer after her teaching assignment in England is completed in mid-June of each school year. She remains in Louisiana for approximately 60 days, returning to England in the last week of August to resume her teaching duties. The Government pays the air fare for petitioner's and Eric's home leave biennially. In the summers of 1972, 1973, and 1974, petitioner used Government- paid education leave to attend courses in Natchitoches. After Eric gave up his employment in 1972, he joined petitioner on her trips to Louisiana. During the summer of 1975, however, she stayed in Europe, where she was visited by her sister and mother.

While in Natchitoches, the Lane-Burslems live at the Sutton family home owned by petitioner's mother. Petitioner and Eric have their own room in the house. That room permanently contains their summer clothing and some personal effects. The majority of petitioner's furniture, however, is kept in England. The room is not a guestroom and is not used by others in petitioner's absence. Petitioner, who with her sister will inherit the house at her mother's death, intends to purchase her sister's interest if she resides there permanently after her retirement. Petitioner receives mail at the house while she is in England, and her mother then forwards it to her.

Petitioner is registered to vote in Natchitoches. Since 1951, she has consistently voted in Federal, State, and local elections in person when she is present in Natchitoches on primary or election days, and by absentee ballot when she is not. She owned residential real property situated in...