Tax Type
Corporation Income Tax
Description
Interest on Overpayment of Amended Returns
Topic
Payment and Refund
Penalties and Interest
Date Issued
08-23-2000
August 23, 2000
Re: § 58.1-1821 Application: Corporate Income Taxation
Dear ****
This will reply to your letter in which you request that the department recalculate the additional interest assessed against the ***** (the "Taxpayers") pursuant to federal RAR adjustments for the 1989 through 1994 taxable years.
FACTS
The Internal Revenue Service ("IRS") examined the Taxpayers and made adjustments against them for the 1989 through 1994 taxable years. Pursuant to these adjustments, the Taxpayers filed amended Virginia corporate income tax returns, reporting a net overpayment of tax. The department assessed interest for the taxable years that were underpaid through the date of the amended returns, and refunded the balance of the overpayment.
The Taxpayers contend that the department should have netted the tax overpayments and underpayments as permitted by Internal Revenue Code ("IRC") § 6402(a) in order to reduce the interest charge.
DETERMINATION
Under IRC § 6402(a), the IRS may credit any overpayment, including interest with any liability within the applicable period of limitations. Virginia's conformity to federal law is set forth in Code of Virginia § 58.1-301, which provides that the terms used in the Virginia income tax statutes will have the same meanings as used in the IRC. As such, Virginia's conformity to federal law is limited to the actual use of a specific term in a Virginia statute. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia. Thus, Virginia tax law does not conform with federal tax law unless the law is expressly stated in the Code of Virginia.
You stated that Public Document 95-277 (10/31/95) provided for the netting of refunds against assessments in the case of net operating loss carry-backs. P.D. 95-277 merely provides that when a net operating loss results in a refund, the date of overpayment is the date the loss year return was filed or the last day prescribed by law for such filing, whichever is later. As specifically provided under Code of Virginia § 58.1-1833(B)(2), interest is calculated from the date an original return is due for all returns not resulting in a net operating loss pursuant to Code of Virginia §§ 58.1-308 and 1833.
Accordingly, the department's interest calculations are upheld. If you have questions regarding this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29684B
Re: § 58.1-1821 Application: Corporate Income Taxation
Dear ****
This will reply to your letter in which you request that the department recalculate the additional interest assessed against the ***** (the "Taxpayers") pursuant to federal RAR adjustments for the 1989 through 1994 taxable years.
FACTS
The Internal Revenue Service ("IRS") examined the Taxpayers and made adjustments against them for the 1989 through 1994 taxable years. Pursuant to these adjustments, the Taxpayers filed amended Virginia corporate income tax returns, reporting a net overpayment of tax. The department assessed interest for the taxable years that were underpaid through the date of the amended returns, and refunded the balance of the overpayment.
The Taxpayers contend that the department should have netted the tax overpayments and underpayments as permitted by Internal Revenue Code ("IRC") § 6402(a) in order to reduce the interest charge.
DETERMINATION
Under IRC § 6402(a), the IRS may credit any overpayment, including interest with any liability within the applicable period of limitations. Virginia's conformity to federal law is set forth in Code of Virginia § 58.1-301, which provides that the terms used in the Virginia income tax statutes will have the same meanings as used in the IRC. As such, Virginia's conformity to federal law is limited to the actual use of a specific term in a Virginia statute. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia. Thus, Virginia tax law does not conform with federal tax law unless the law is expressly stated in the Code of Virginia.
You stated that Public Document 95-277 (10/31/95) provided for the netting of refunds against assessments in the case of net operating loss carry-backs. P.D. 95-277 merely provides that when a net operating loss results in a refund, the date of overpayment is the date the loss year return was filed or the last day prescribed by law for such filing, whichever is later. As specifically provided under Code of Virginia § 58.1-1833(B)(2), interest is calculated from the date an original return is due for all returns not resulting in a net operating loss pursuant to Code of Virginia §§ 58.1-308 and 1833.
Accordingly, the department's interest calculations are upheld. If you have questions regarding this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29684B
Related Documents
Rulings of the Tax Commissioner