Rulings of the Tax Commissioner

August 3, 2022

Re:    § 58.1-1821 Application: Individual Income Tax
    
Dear *****: 

This will respond to your letter in which you seek correction of the individual income tax assessments issued to ***** (the “Taxpayer”) for the taxable years ended December 31, 2013, through 2015.

FACTS

The Taxpayer, a Virginia resident, filed federal individual income tax returns for the 2013, 2014, and 2015 taxable years, but failed to file Virginia individual income tax returns for those years. As a result, the Department issued assessments dated February 23, 2017, May 21, 2018, and May 31, 2018, respectively. The assessment amounts were based on information provided to the Department by the Internal Revenue Service (IRS). The Taxpayer appealed, contending that the amount of tax assessed should have been lower based on his income.

DETERMINATION

Statute of Limitations

Virginia Code § 58.1-1821 states that “[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. . . ”. Title 23 of the Virginia Administrative Code (VAC) 10-20-165 B 1 provides that “the Department strictly enforces the 90-day limitations period for filing a timely administrative appeal. A taxpayer must file a complete appeal within 90 calendar days after the date of assessment.”

In this instance, the assessments issued to the Taxpayer were dated February 23, 2017, May 21, 2018, and May 31, 2018, respectively. Based on the provisions of Virginia Code § 58.1-1821 and Title 23 VAC 10-20-165, the Taxpayer’s complete appeal must have been filed by May 24, 2017, for the first assessment, August 19, 2018, for the second assessment, and August 29, 2018, for the final assessment. The Taxpayer filed his appeal well after the 90-day period for any of the assessments at issue. Accordingly, the Taxpayer’s application for correction is barred by the statute of limitations.

Imposition of Tax

Virginia Code § 58.1-341 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 Virginia Code § 58.1-321. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia individual income tax return. When a resident does not file a proper Virginia return, Internal Revenue Code (IRC) § 6103(d) authorizes the Department to obtain information from the IRS that will enable the Department to determine the resident’s tax liability. The assessments were based on information provided by the IRS indicating that the Taxpayer had filed federal income tax returns for the taxable years in question, and had sufficient income to meet the filing threshold.  

Virginia Code § 58.1-205 states that “[a]ny assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayer to show that the assessment is in error. The assessments at issue were based upon the best information available to the Department pursuant to Virginia Code § 58.1-111. The Taxpayer, however, may have information that better represents his Virginia income tax liability of the taxable years at issue. Therefore, he should file Virginia income tax returns for the 2013, 2014, and 2015 taxable years. The returns should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****. The returns will be reviewed and processed, and the assessments will be adjusted as warranted. If the returns are not received in the allotted time, the assessments will be adjusted based on the best information available.

The Code of Virginia sections and regulations cited are available on-line at www.tax.virginia.gov in the Laws, Rules, and Decisions section of the Department’s website. If you have any questions about this determination, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings at *****.

Sincerely,

Craig M. Burns
Tax Commissioner

AR/4121.Y