August 3, 2022
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the “Taxpayer”) in which you seek correction of the retail sales and use tax assessment issued for the period September 2012 through August 2018. I note that the assessments at issue have been paid in full.
FACTS
The Taxpayer renovates historic homes in Virginia. As a result of an audit for the period at issue, the Taxpayer was assessed tax and interest due on untaxed purchases. The Taxpayer submitted an offer in compromise to settle the assessment for less than the amount due. The Department sent a letter rejecting the offer in compromise because the Taxpayer failed to show doubtful liability with respect to the assessments at issue. The Taxpayer now submits an administrative appeal.
DETERMINATION
Statute of Limitations
Virginia Code § 58.1-1821 states, “[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner. Such application shall be in the form prescribed by the Department and shall fully set forth the grounds upon which the taxpayer relies and all facts relevant to the taxpayer’s contention.” Pursuant to Virginia Code § 58.1-1821 and Title 23 of the Virginia Administrative Code (VAC) 10-20-165, a complete appeal must be filed with the Department within 90 days from the date of assessment.
The Taxpayer was made aware of the 90-day limitation to file an appeal in the audit closing letter and email correspondence from the audit staff. The Taxpayer was also provided The Taxpayer Bill of Rights which clearly states the 90-day limitation is strictly enforced. The Taxpayer chose to submit an offer in compromise instead of filing an appeal. The Department’s offer in compromise process does not adhere to a 90-day statute of limitations requirement for submission.
The date of the Taxpayer’s assessments was December 7, 2018. The Taxpayer did not submit an administrative appeal until January 10, 2022. Therefore, the Taxpayer’s appeal application pursuant to Virginia Code § 58.1-1821 is barred by the statute of limitations. It is noted that the correspondence received by the Taxpayer dated December 21, 2021 was a copy of the bill and does not constitute a new date of assessment for purposes of determining the statute of limitations to submit an administrative appeal.
CONCLUSION
Based on the authorities cited above, the assessments are correct as issued. No further action is required, as the assessments have been paid in full. The Code of Virginia section and regulation cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4061.G