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Keywords

liability

Related Cases

Reiersen v. Commissioner of Revenue, 26 Mass.App.Ct. 124, 524 N.E.2d 857

Facts

Frederick D. Reiersen claimed exemption from income tax liability to Massachusetts for the years 1977, 1978, and 1979, arguing that he was domiciled in the Republic of the Philippines. The Commissioner of Revenue determined his domicile to be in Worcester, Massachusetts, which the Appellate Tax Board affirmed. Reiersen had moved to the Philippines in 1975 for work, where he became the managing director of Sprague Philippines, Inc. His family remained in Worcester, but he maintained extensive business and social ties in the Philippines.

In 1966, having completed high school, Reiersen went to work as a junior maintenance man at Sprague Electric Company in Worcester. He advanced rapidly and within four years began to travel on troubleshooting and “set up” missions for Sprague to Hong Kong, Korea, Mexico, the Philippines, and Taiwan. In 1974 he spent six months in the Philippines, where Sprague was consolidating some seventy percent of its overseas semiconductor assembly and packaging operations.

Issue

Was Frederick D. Reiersen's domicile for income tax purposes in the Republic of the Philippines or Massachusetts?

Rule

Domicile is defined as the place where a person has their home, which is the center of their domestic, social, and civil life. A change of domicile occurs when a person is physically present in a place and intends to make that place their home.

A person's domicil is usually the place where he has his home. Home, in turn, is 'the place where a person dwells and which is the center of his domestic, social and civil life.' A change of domicil occurs 'when a person with capacity to change his domicil is physically present in a place and intends to make that place his home for the time at least; ‘the fact and intent must concur.’'

Analysis

The court analyzed the facts surrounding Reiersen's life in the Philippines, noting his significant business and social connections there, as well as his expressed intent to make it his home. The court found that Reiersen's presence in the Philippines was not temporary and that he had established a life there, despite maintaining some ties to Worcester. The court concluded that the evidence supported Reiersen's claim of domicile in the Philippines.

Reiersen's presence and activity in the Philippines were in no sense a pretext. His was not a temporary mission. In the Philippines he had found business and social success he had not enjoyed in Worcester. There he had made friends and joined clubs. His connections to his family were distant; indeed, so far as his wife was concerned, fragile. He planned to live and work in the Philippines for the time being at least, whether or not employed by Sprague.

Conclusion

The court reversed the decision of the Appellate Tax Board and determined that Reiersen was entitled to tax abatements as a domiciliary of the Philippines for the years in question.

The decision of the board is reversed, and a decision is to be entered granting to Reiersen such abatements of his personal income tax as he is entitled to as a domiciliary of the Philippines during 1977, 1978, and 1979.

Who won?

Frederick D. Reiersen prevailed in the case because the court found that he had established his domicile in the Philippines, supported by his business and social activities there.

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