Opinion
Case No. 07-15395
06-12-2012
In re: Joseph Allan Mulica Debtor Ohio Department of Taxation Objector, v. Joseph Allan Mulica Debtor.
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
___________________________
Burton Perlman
United States Bankruptcy Judge
Chapter 13
Judge Burton Perlman
ORDER OVERRULING OBJECTION TO PROOF OF CLAIM
In this chapter 13 case, the Ohio Department of Taxation (hereafter "Ohio Tax") filed a proof of claim for unpaid taxes. Debtor has filed an objection to the proof of claim on grounds that he was a non-resident of Ohio for the time for which the tax was assessed.
I. Jurisdiction.
This Court has jurisdiction of this matter pursuant to 28 U.S.C. § 1334(b) and the General Order of Reference entered in this district. This is a core proceeding arising under 28 U.S.C. § 157.
II. Background.
Ohio Tax filed a proof of claim asserting that the total amount due is $178,543.74. This is for taxes due for the years 1999, 2005, and 2006. As returns had not been filed by debtor, Ohio Tax filed a claim for estimated taxes due. Debtor contends that he was not a resident of Ohio during the years 2005 and 2006, and therefore was not required to pay Ohio income tax for those periods.
The matter came on for hearing before the Court on April 4, 2012. The Court heard testimony from debtor and from Jennifer Gatherwright, who was employed by debtor for tax preparation and tax related issues.
III. Facts.
Debtor has a wife and children who live at 3433 St. Johns Place, Cincinnati, Ohio. Debtor separated from his wife in 2004. They were reconciled, according to debtor, in 2009 or 2010. Debtor testified that he was a resident of Tennessee in 2005, 2006, and part of 2007. Debtor is self-employed, working in print sales and consulting in that field. His work involves him with manufacturing facilities in Tennessee. His work requires that he travel a great deal. He maintains an office at 312 Walnut Street in Cincinnati, Ohio, which is an office building. During the separation, he would come to Cincinnati to visit his children. He would stay at the 312 Walnut Street address. He testified at the hearing that he currently resides at that same 312 Walnut Street address.
Debtor testified that he filed his chapter 13 bankruptcy case on November 5, 2007, because he was having tax problems. He has paid $17,500.00 per month on the chapter 13 plan for more than four years, which the Chapter 13 Trustee indicated represents 100% payment to debtor's creditors.
In January of 2007, debtor retained tax counsel in the Cincinnati area. Debtor filed a partial 2007 Ohio tax return for May through December of 2007. In that, he listed his address as 312 Walnut, Apt. 1600. Debtor filed federal tax returns for 2005 and 2006. In each his address was given as 2249 Castleman Drive, Nashville, Tennessee. Each was prepared by Robert J. Molloy, Jr., with an address at 3349 Glenmore Avenue, Cincinnati, Ohio. Also in evidence is "Notice of Federal Tax Lien" dated June 8, 2007, and stating debtor's name and residence at 2249 Castleman Drive, Nashville, Tennessee. There is also a "Notice of Federal Tax Lien" dated March 31, 2006, in which debtor's address is given as 1501 Demonbruen Street, Nashville, Tennessee. In evidence is also a power of attorney made by debtor dated January 22, 2007. The power of attorney says that it is for income tax matters for the years 1994 through 2007. It is addressed to debtor at 1601 Demonbruem Street, Nashville, Tennessee.
IV. Procedure.
The controlling applicable procedural law has been stated:
When an objection to claim is made, the party objecting to the claim bears the initial burden of producing sufficient evidence to rebut the prima facie effect of the proof of claim. In re Hughes, 313 B.R. 205, 208 (Bankr. E.D. Mich. 2004) (citations omitted). Once the objecting party produces facts sufficient toIn re Plastech Engineered Products, Inc., 399 B.R. 1, 10 (Bankr. E.D. Mich. 2008). The Court holds that debtor has failed to sustain the initial burden of producing sufficient evidence to rebut the prima facie effect of the proof of claim of Ohio Tax.
demonstrate that an actual dispute exists regarding the validity or amount of the claim, the burden of going forward shifts to the claimant to submit evidence to sustain the claim. Id. (citations omitted). Although the burden of going forward shifts during the claims objection process, the ultimate burden of persuasion is always on the claimant to establish entitlement to the claim. See Fed. R. Bankr. P. 3001(f).
V. Discussion and Decision.
Law which is pertinent here, is:
The Internal Revenue Service states "a taxpayer has only one domicile even though he may have more than one residence. A taxpayer's domicile is a permanent legal residence that the taxpayer intends to use for an indefinite or unlimited period, and to which, when absent, the taxpayer intends to return. The question of domicile is primarily a matter of intent. When domicile or residency is questioned, the taxpayer must be able to show factually that he intends a given place or state to be his permanent home."City of Cleveland v. Surella 61 Ohio App.3d 302, 304-05 Ohio App.8 Dist., 1989, 546 N.E.2d 1331.
Debtor, who is the objecting party, has testified that he resided in Nashville for the years 2005 and 2006, and therefore did not need to pay Ohio taxes. Assuming this to be true, the question arises whether this alone is sufficient to demonstrate that an actual dispute exists regarding the validity of the claim of Ohio Tax. The Court holds that it is not. The following facts require a holding that his domicile has always been in Ohio:
1. Debtor's domicile was in Ohio through 2004. He was married and the family home was and is in Cincinnati, Ohio.
2. Debtor maintained a residence in Cincinnati at 312 Walnut Street throughout 2005 and 2006, the years in question. Though 312 Walnut Street is an office building in Cincinnati, this is the residence address debtor had, he said, at the time of the hearing, and maintained throughout the periods when he had residences in Nashville.
3. Debtor's federal tax returns for 2005 and 2006 were prepared by a tax preparer in Cincinnati.
4. While debtor and his wife were estranged through the years 2005 and 2006, debtor did come to Cincinnati on occasion, and when he did, he stayed at 312 Walnut Street. Debtor continues to use the 312 Walnut Street address as his residence today.
5. When debtor required the services of a tax attorney in 2007, he consulted such an attorney in the Cincinnati area (though close by in Kentucky.)
6. In 2007, debtor returned to Ohio and took up residence at 312 Walnut Street.
7. While debtor may have had residences in Tennessee during 2005 and 2006, he offered no evidence to show that he had changed his domicile from Ohio. As stated in Surella, "domicile is primarily a matter of intent." 61 Ohio App.3d at 304. The absence of such evidence indicated an intent to maintain an Ohio domicile. He offered no evidence that he registered to vote in Tennessee. He offered no evidence that he had a Tennessee driver's license.
On the record before the Court, debtor has failed to show an intent to change his domicile from Ohio to Tennessee, and his domicile remains in Ohio.
The foregoing constitutes our findings of fact in conclusions of law.
VI. Conclusion.
The Court holds that debtor's objection to Claim 8 of Ohio Tax is overruled.
SO ORDERED. Copies to: Default list Rasheda D. Hansard
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