Since 2016, Robert and Mary Joseph owned a home at 451 Coast Road in Milford, Connecticut....
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Since 2016, Robert and Mary Joseph owned a home at 451 Coast Road in Milford, Connecticut. At the time of their departure for France in 2018, the Josephs lived in their Milford residence with their daughter Carolyn, a son Paul of high school age and three older children attending college outside of Connecticut. Robert Joseph was employed continuously by NAG, Inc. since October 1, 1990. He presently serves as president of that company. In January 2018, Robert Joseph was offered a position in Paris, France, to serve as the president of NAG Europe, a management unit of NAG, Inc. headquartered in Paris. Robert immediately accepted the position and went to France that same month. Mary Joseph and Carolyn, then ten years old, moved to France in April of 2018. At that time, the Josephs' son, Paul, was a junior at Milford high school and remained in Milford for the 2018-2019 school year, living at the home of family friends. Paul graduated high school in 2019. Robert entered into a "Letter of Understanding" with NAG, Inc., which set forth the terms and conditions of Robert's employment in France. This letter also served the purpose of allowing Robert to obtain a work visa from France. The letter of understanding provided that the period of Robert's expatriate assignment was "expected" to be three to five years. Senior executives with NAG, such as Robert, are often transferred from one location to another, whether within the United States, or to locations in Europe, Asia or the Pacific. NAG did not make commitments to their senior officers with respect to how long each assignment would be. Rather, the future needs of the company dictated the duration and location of the assignment. The duration of the assignments was contingent upon the needs of the Company, not the needs of the individual employee. When the Josephs moved to France, they retained ownership of their house in Milford. The house was leased to a married couple from September 1, 2018 to July 31, 2020. They leased the house to another couple on August 1, 2020 for a duration of two years, but the lease was terminated in early 2022 by the tenants. The house was next leased to a couple on a short-term basis from February 1, 2022 to the end of June 2022. Beginning in September of 2022, the Josephs made substantial renovations to the house at a cost of over $700,000. While residents of Milford, prior to the move to France, the Josephs were congregants of St. Joseph's Church in Milford. Upon their move to France, they registered as members of Our Lady of Hope in Paris. As members of the Paris church, the Josephs fully participated in church life and activities. While in France, the Josephs continued to fulfill their pledge obligations previously made to St. Joseph's. Upon their return to the states from France, the Josephs joined St. John's in Armonk, New York, where they resided for a short period of time, and later rejoined St. Joseph's. The Josephs' daughter, Carolyn, moved to France with her parents and enrolled in the International School of Paris from April 26, 2018 to June 21, 2022. The Josephs also opened a bank account in France to attend to their banking needs. Carol Joseph retained her Milford bank account so that she could write checks to her son Paul, who was attending high school in Milford. The Josephs also surrendered their Connecticut driver's licenses in favor of obtaining French licenses. The Josephs filed a 2018 French income tax return that was prepared by Ernst & Young, reflecting the Josephs' French address. Robert Joseph received special tax treatment under French law that offered lower taxes to employees of foreign-owned corporations who are not citizens of France but are residents of France. For this reason, the Josephs filed their French tax returns as nonresidents under a special tax regime. While a resident of Milford, Robert Joseph was a member of the Milford Country Club in Milford, Connecticut. Milford is an exclusive country club where one must wait some seven years to gain golfing privileges. Rather than forfeit his membership at Milford, upon moving to France, Robert Joseph chose to change his membership to an inactive non-resident status so that it could be reinstated in the future. John Doe, NAG's tax director has contacted you. Connecticut's personal income tax auditors have determined that the Josephs were residents of Connecticut for the tax periods 2018 and 2019. Using the law provided below, answer the two questions and complete the challenge (considerably less weight will be given to the challenge). Question 1: Did the Josephs meet the Days Test in Connecticut? Please explain why or why not. Question 2: John Doe would also like you to assess Mr. Joseph's case (how likely will he be able to defeat the state's claim that he should be taxed as a resident because he was domiciled in the state of Connecticut for the tax periods 2018 and 2019. In doing so, John Doe would like you to list in two separate columns the good facts and the bad facts from the facts he has given you above. Please indicate which items on your list constitute NESTOA prioritization items (an asterisk or highlighting will be enough). Challenge: This is a real case. The names have been changed because I was too lazy to create a fictional fact pattern. Utilize your research skills and the facts provided and see if you can identify the actual Connecticut case. You may try Google, RIA Checkpoint, and/or CCH Intelliconnect. Since 2016, Robert and Mary Joseph owned a home at 451 Coast Road in Milford, Connecticut. At the time of their departure for France in 2018, the Josephs lived in their Milford residence with their daughter Carolyn, a son Paul of high school age and three older children attending college outside of Connecticut. Robert Joseph was employed continuously by NAG, Inc. since October 1, 1990. He presently serves as president of that company. In January 2018, Robert Joseph was offered a position in Paris, France, to serve as the president of NAG Europe, a management unit of NAG, Inc. headquartered in Paris. Robert immediately accepted the position and went to France that same month. Mary Joseph and Carolyn, then ten years old, moved to France in April of 2018. At that time, the Josephs' son, Paul, was a junior at Milford high school and remained in Milford for the 2018-2019 school year, living at the home of family friends. Paul graduated high school in 2019. Robert entered into a "Letter of Understanding" with NAG, Inc., which set forth the terms and conditions of Robert's employment in France. This letter also served the purpose of allowing Robert to obtain a work visa from France. The letter of understanding provided that the period of Robert's expatriate assignment was "expected" to be three to five years. Senior executives with NAG, such as Robert, are often transferred from one location to another, whether within the United States, or to locations in Europe, Asia or the Pacific. NAG did not make commitments to their senior officers with respect to how long each assignment would be. Rather, the future needs of the company dictated the duration and location of the assignment. The duration of the assignments was contingent upon the needs of the Company, not the needs of the individual employee. When the Josephs moved to France, they retained ownership of their house in Milford. The house was leased to a married couple from September 1, 2018 to July 31, 2020. They leased the house to another couple on August 1, 2020 for a duration of two years, but the lease was terminated in early 2022 by the tenants. The house was next leased to a couple on a short-term basis from February 1, 2022 to the end of June 2022. Beginning in September of 2022, the Josephs made substantial renovations to the house at a cost of over $700,000. While residents of Milford, prior to the move to France, the Josephs were congregants of St. Joseph's Church in Milford. Upon their move to France, they registered as members of Our Lady of Hope in Paris. As members of the Paris church, the Josephs fully participated in church life and activities. While in France, the Josephs continued to fulfill their pledge obligations previously made to St. Joseph's. Upon their return to the states from France, the Josephs joined St. John's in Armonk, New York, where they resided for a short period of time, and later rejoined St. Joseph's. The Josephs' daughter, Carolyn, moved to France with her parents and enrolled in the International School of Paris from April 26, 2018 to June 21, 2022. The Josephs also opened a bank account in France to attend to their banking needs. Carol Joseph retained her Milford bank account so that she could write checks to her son Paul, who was attending high school in Milford. The Josephs also surrendered their Connecticut driver's licenses in favor of obtaining French licenses. The Josephs filed a 2018 French income tax return that was prepared by Ernst & Young, reflecting the Josephs' French address. Robert Joseph received special tax treatment under French law that offered lower taxes to employees of foreign-owned corporations who are not citizens of France but are residents of France. For this reason, the Josephs filed their French tax returns as nonresidents under a special tax regime. While a resident of Milford, Robert Joseph was a member of the Milford Country Club in Milford, Connecticut. Milford is an exclusive country club where one must wait some seven years to gain golfing privileges. Rather than forfeit his membership at Milford, upon moving to France, Robert Joseph chose to change his membership to an inactive non-resident status so that it could be reinstated in the future. John Doe, NAG's tax director has contacted you. Connecticut's personal income tax auditors have determined that the Josephs were residents of Connecticut for the tax periods 2018 and 2019. Using the law provided below, answer the two questions and complete the challenge (considerably less weight will be given to the challenge). Question 1: Did the Josephs meet the Days Test in Connecticut? Please explain why or why not. Question 2: John Doe would also like you to assess Mr. Joseph's case (how likely will he be able to defeat the state's claim that he should be taxed as a resident because he was domiciled in the state of Connecticut for the tax periods 2018 and 2019. In doing so, John Doe would like you to list in two separate columns the good facts and the bad facts from the facts he has given you above. Please indicate which items on your list constitute NESTOA prioritization items (an asterisk or highlighting will be enough). Challenge: This is a real case. The names have been changed because I was too lazy to create a fictional fact pattern. Utilize your research skills and the facts provided and see if you can identify the actual Connecticut case. You may try Google, RIA Checkpoint, and/or CCH Intelliconnect.
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Answer rating: 100% (QA)
Question 1 The determination of whether the Josephs met the Days Test in Connecticut for tax years 2018 and 2019 depends on the specific criteria set forth in Connecticut tax law Connecticuts residenc... View the full answer
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
Posted Date:
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