Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
05-05-2000
May 5, 2000
Re: § 58.1-1821 Application: Individual Income Tax
Dear ****
This will reply to your letter concerning your 1996 Virginia individual income tax assessment. ****** a member of the Virginia Senate, also wrote to me on your behalf concerning this matter. My response to her letter is enclosed. Your case is currently being handled as an appeal pursuant to Code of Virginia § 58.1-1821, copy enclosed. I apologize for the delay in responding to your letter.
FACTS
You claim to be a citizen of the republic known as the "Commonwealth of Virginia and expressly not a federal citizen residing is the Commonwealth of Virginia." The department, however, has no record that you filed a 1996 Virginia income tax return. The department wrote you a letter requesting that you file the return. When an appropriate response was not received, an assessment was issued. You requested that the department provide evidence of your federal taxable activity and gross income, as defined by the Internal Revenue Code, which would require you to file a Virginia individual income tax return.
DETERMINATION
Code of Virginia § 58.1-301, copy enclosed, provides that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. Virginia "conforms" to federal law because it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). Section 61(a)(1) of the IRC and the associated Treasury Regulation 1.61-2 specifically include wages and salaries in the definition of gross income. § 61 (b) of the IRC also cross-references other income that is included in the definition of gross income (IRC ' 71 through 90). Consequently, wages, salaries, and other income included in federal adjusted gross income (FAGI) are subject to taxation by Virginia.
An individual's residency determines if his income is subject to Virginia taxation. Code of Virginia § 58.1-302, copy enclosed, specifically defines a "resident" to include a person domiciled in Virginia or a person who maintains a place of abode in Virginia for an aggregate of more than 183 days. Based on the available information, you are a resident of Virginia. Code of Virginia § 58.1-320, copy enclosed, provides that a tax is annually imposed on the Virginia taxable income of a resident individual.
Code of Virginia § 58.1-341, copy enclosed, provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return, unless the resident is exempt from filing under Code of Virginia § 58.1-321, copy enclosed. When a resident does not file a Virginia return, ' 6103 (d) of the IRC, copy enclosed, authorizes the department to obtain information from the Internal Revenue Service (IRS) that will help in determining the resident's tax liability. The Agreement on Coordination of Tax Administration (the "Exchange Agreement"), copy enclosed, governs the exchange of tax information between the IRS and the department. To implement the Exchange Agreement, the IRS is authorized to periodically transmit to the department reports indicating the federal audits or examinations that have been conducted. The department obtained information from the IRS on your account in this manner.
The IRS made an adjustment to your account for the taxable year 1996, and an assessment was issued. The federal adjustment was based on income you received while residing in Virginia; however, you failed to file a Virginia return. When the department received this information from the IRS, a letter was sent to you on February 10, 1999, requesting the Virginia returns or an explanation as to why you were not required to file a Virginia return. When an appropriate response was not received, the department issued an assessment of tax, penalty, and interest. As a result of your inquiry about the assessment, another letter was sent to you on June 22, 1999, again requesting the 1996 Virginia return. As previously indicated, the return was never received.
You have not provided sufficient information to prove that you are not required to file the 1996 Virginia return. Pursuant to Code of Virginia § 58.1-111, copy enclosed, the department has the authority to estimate tax liability when a person refuses to file a valid return. Code of Virginia § 58.1-205, copy enclosed, provides that any assessment shall be deemed prima facie correct. Additionally, Code of Virginia § 58.1-312, copy enclosed, provides that an assessment may be issued at any time if a taxpayer fails to file a Virginia return.
Based on the information provided, the department has properly applied the provisions of Title 58.1 of the Code of Virginia to your case, and there is no basis to abate your Virginia individual income tax assessment for the taxable year 1996. A conference, under these circumstances, is not needed. Your case, however, will be held in abeyance for 60 days awaiting the 1996 Virginia return, which should be forwarded to the attention of ****, Office of Tax Policy, Department of Taxation, Post Office Box 1880, Richmond, Virginia 23218-1880. ***** may also be contacted at ****.
If your 1996 Virginia return is not provided within this period, your administrative remedies with the department will be exhausted and collection action will resume. Your alternative would be to pursue a judicial remedy by applying to the circuit court for relief pursuant to Code of Virginia § 58.1-1825, copy enclosed. The application, however, must be filed within three years from the date the assessment was made. Additionally, the assessment must be paid or the appropriate bond posted before the court application is deemed filed.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP24813N
Re: § 58.1-1821 Application: Individual Income Tax
Dear ****
This will reply to your letter concerning your 1996 Virginia individual income tax assessment. ****** a member of the Virginia Senate, also wrote to me on your behalf concerning this matter. My response to her letter is enclosed. Your case is currently being handled as an appeal pursuant to Code of Virginia § 58.1-1821, copy enclosed. I apologize for the delay in responding to your letter.
FACTS
You claim to be a citizen of the republic known as the "Commonwealth of Virginia and expressly not a federal citizen residing is the Commonwealth of Virginia." The department, however, has no record that you filed a 1996 Virginia income tax return. The department wrote you a letter requesting that you file the return. When an appropriate response was not received, an assessment was issued. You requested that the department provide evidence of your federal taxable activity and gross income, as defined by the Internal Revenue Code, which would require you to file a Virginia individual income tax return.
DETERMINATION
Code of Virginia § 58.1-301, copy enclosed, provides that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. Virginia "conforms" to federal law because it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). Section 61(a)(1) of the IRC and the associated Treasury Regulation 1.61-2 specifically include wages and salaries in the definition of gross income. § 61 (b) of the IRC also cross-references other income that is included in the definition of gross income (IRC ' 71 through 90). Consequently, wages, salaries, and other income included in federal adjusted gross income (FAGI) are subject to taxation by Virginia.
An individual's residency determines if his income is subject to Virginia taxation. Code of Virginia § 58.1-302, copy enclosed, specifically defines a "resident" to include a person domiciled in Virginia or a person who maintains a place of abode in Virginia for an aggregate of more than 183 days. Based on the available information, you are a resident of Virginia. Code of Virginia § 58.1-320, copy enclosed, provides that a tax is annually imposed on the Virginia taxable income of a resident individual.
Code of Virginia § 58.1-341, copy enclosed, provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return, unless the resident is exempt from filing under Code of Virginia § 58.1-321, copy enclosed. When a resident does not file a Virginia return, ' 6103 (d) of the IRC, copy enclosed, authorizes the department to obtain information from the Internal Revenue Service (IRS) that will help in determining the resident's tax liability. The Agreement on Coordination of Tax Administration (the "Exchange Agreement"), copy enclosed, governs the exchange of tax information between the IRS and the department. To implement the Exchange Agreement, the IRS is authorized to periodically transmit to the department reports indicating the federal audits or examinations that have been conducted. The department obtained information from the IRS on your account in this manner.
The IRS made an adjustment to your account for the taxable year 1996, and an assessment was issued. The federal adjustment was based on income you received while residing in Virginia; however, you failed to file a Virginia return. When the department received this information from the IRS, a letter was sent to you on February 10, 1999, requesting the Virginia returns or an explanation as to why you were not required to file a Virginia return. When an appropriate response was not received, the department issued an assessment of tax, penalty, and interest. As a result of your inquiry about the assessment, another letter was sent to you on June 22, 1999, again requesting the 1996 Virginia return. As previously indicated, the return was never received.
You have not provided sufficient information to prove that you are not required to file the 1996 Virginia return. Pursuant to Code of Virginia § 58.1-111, copy enclosed, the department has the authority to estimate tax liability when a person refuses to file a valid return. Code of Virginia § 58.1-205, copy enclosed, provides that any assessment shall be deemed prima facie correct. Additionally, Code of Virginia § 58.1-312, copy enclosed, provides that an assessment may be issued at any time if a taxpayer fails to file a Virginia return.
Based on the information provided, the department has properly applied the provisions of Title 58.1 of the Code of Virginia to your case, and there is no basis to abate your Virginia individual income tax assessment for the taxable year 1996. A conference, under these circumstances, is not needed. Your case, however, will be held in abeyance for 60 days awaiting the 1996 Virginia return, which should be forwarded to the attention of ****, Office of Tax Policy, Department of Taxation, Post Office Box 1880, Richmond, Virginia 23218-1880. ***** may also be contacted at ****.
If your 1996 Virginia return is not provided within this period, your administrative remedies with the department will be exhausted and collection action will resume. Your alternative would be to pursue a judicial remedy by applying to the circuit court for relief pursuant to Code of Virginia § 58.1-1825, copy enclosed. The application, however, must be filed within three years from the date the assessment was made. Additionally, the assessment must be paid or the appropriate bond posted before the court application is deemed filed.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP24813N
Rulings of the Tax Commissioner