Drew Edmundson wrote:

- quote -

That happens more often than you might suppose <G> .

The disclaimer on all of my teaching materials ends with
"Further, the author reserves the right to change her mind
on any point without notice."

Katie in San Diego

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Drew Edmundson wrote:
- quote -

That happens more often than you might suppose <G> .

The disclaimer on all my teaching materials ends with
"Further, the author reserves the right to change her mind
on any point without notice."

Katie in San Diego

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Katie" <katiej_1958[at]yahoo.com> wrote:
- quote -

snip

- quote -

snip

Katie I won't argue constitutional law with you as I feel I
am outgunned. But I will quote you back to yourself from
the original thread: "I agree, it's screwy, but it looks to
me like a reasonable interpretation of the statute as she is
writ. In fact, I don't see anything in the statute that
would empower the DOR to allow anyone who doesn't meet the
requirements of subsection (e) to file jointly."

I guess you have revised your prior opinion. :-)

---
Drew Edmundson, CPA
Cary, NC

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Drew Edmundson wrote:
- quote -

Drew, I'm not sure I agree with you. I do think the NC
DOR's interpretation of the prior law might be successfully
challenged under the privileges and immunities clause of the
U.S. Constitution.

Before the amendment, the statute required a married couple
who filed a joint federal return to file jointly in NC if
both spouses were residents OR if both spouses had NC source
income. Where one spouse is a nonresident and that spouse
has no in-state source income, it is reasonably clear that a
state does not have due process jurisdiction to impose a tax
or a filing requirement on that person, and therefore cannot
REQUIRE that person to file a joint return with the resident
spouse. However, the DOR interpreted the law to mean that
such a person CANNOT file a joint return. Where the
income-splitting effect of a joint return results in a lower
tax liability than a separate return, it seems to me the
DOR's interpretation violates P&I by denying to the
nonresident spouse a benefit that is allowed to a resident,
purely on the basis of that spouse's status as a nonresident
with no source income.

In 1998, the U.S. Supreme Court applied the privileges &
immunities clause to strike down New York's disallowance of
a deduction for alimony paid by a nonresident individual
taxpayer (_Lunding v. NY_, 522 US 287). In that case the
Court observed that in order to sustain the denial of a tax
benefit to a nonresident that is allowed to a resident, a
state must present a substantial justification for the
difference in treatment and explain how that justification
relates to the tax benefit in question. New York failed to
meet that standard in _Lunding_. Whether NC could meet it in
this case is a matter about which we can only speculate.
Unless and until a court rules on the issue, we won't know.
In any event, the state has fixed it going forward.

Katie in San Diego

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

EBSCHULLW[at]aol.com wrote:

- quote -

We attempt to be a professional forum here. As one of the
people replying to your posts on this subject I do not
appreciate the use of the term "usual suspects." What are
you implying?

I feel my replies to your prior posts were well reasoned and
supported by appropriate citations. The change in the law
does not mean that the prior NC DOR interpretation was
wrong.

- quote -

And what was that? As I pointed out originally the NC
instructions repeat the NC Administrative Rules/Regulations.
Since the law was unclear, and you have agreed it was, then
the NC DOR is allowed to interpret it in a reasonable
manner. They did so, that is why legislation was required
to change the law.

---
Drew Edmundson, CPA
Cary, NC

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Back in July of 2000 in the message

http://groups-beta.google.com/group/...dac93da35bb233

I questioned whether a MFS requirement for a non-resident
found in North Carolina instructions was actually contained
in a North Carolina statute. When the usual suspects
weighed in on the side of North Carolina, they overlooked
one VERY IMPORTANT CONSIDERATION. One of the "suspects"
actually identified that VERY IMPORTANT CONSIDERATION in
comments related to another issue posted in another thread
in this group earlier this year.

Anyone, other than Katie in San Diego, care to opine on what
VERY IMPORTANT CONDSIDERATION was overloked?

Nevertheless the question that I raised is now moot! The
North Carolina legislature has now amended G. S. 105-152(e).
Here is the new version of G.S. 105-152(e).

(e) Joint Returns. -- A husband and wife whose federal
taxable income is determined on a joint federal return shall
file a single income tax return jointly is each spouse
either is a resident of this State or has North Carolina
taxable income and may file a single income tax return
jointly if one spouse is not a resident and has no North
Carolina taxable income. ...

I don't know what caused the North Carolina legislature to
change the statute but my impression is that it is very
unusual for state legislators to change a law that only
produces a negative impact on those who can not vote them
out office. So I don't know whether it was that VERY
IMPORTANT CONSIDERATION or my comments, in passing, to a
prominent member of the NC General Assembly that led to the
change in the statute.

Previous, prior to tax year 2006, North Carolina Law /
instructions provided:

Section 105-152
e) Joint Returns.-- A husband and wife shall file a single
income tax return jointly if (i) their federal taxable
income is determined on a joint federal return and (ii) both
spouses are residents of this State or both spouses have
North Carolina taxable income. ...

Translation from the 1999 North Carolina Instructions for
Individual Income Tax:

Page 3

You and your spouse must file a joint North Carolina return
if you filed a joint federal income tax return, and both of
you were residents of North Carolina or both of you had
North Carolina Taxable taxable income. All other
individuals must file separate returns.

Page 5

If you filed a joint federal return but cannot file a joint
North Carolina return because your spouse is a nonresident
and had no North Carolina taxable income, you must calculate
your federal taxable income as a married person filing a
separate return.

Complete either a federal return as married filing
separately reporting as only your income, exemptions, and
deductions, ...

While the law clearly requires the filing of a joint North
Carolia return if a joint Federal return was filed and both
spouses had North Carolina income regardless of resident or
nonresident status, the law appears to be mute on whether or
not a nonresident couple who filed a joint Federal return
files a joint North Carolina return or the one with North
Carolina income files a separate return.

Where in North Carolina law does it say that a separate
return must be filed by a nonresident if he/her filed a
joint Federal return with spouse and he/she was the only one
that had North Carolina income?

Cheers,

WDK

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >