April 5, 2023
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 your clients, ***** (the “Taxpayers”), for the taxable years ended December 31, 2018 and 2019.
FACTS
The Taxpayers, a husband and wife, filed a Virginia part-year resident income tax return for the 2018 taxable year, allocating all of the husband’s income to his period of nonresidency and claiming subtractions for retirement income. The Taxpayers filed a Virginia resident income tax return for the 2019 taxable year, claiming subtractions for military income earned in another state and foreign earned income. Under audit, the Department disallowed the subtractions and determined that the Taxpayers did not qualify as part-year residents for 2018. The Department issued assessments accordingly. The Taxpayers appeal, contending the husband was not a Virginia resident during the taxable years at issue.
The Taxpayers’ appeal also covered a separate assessment issued for the 2017 taxable year, but that assessment has been abated subsequent to the filing of an amended return by the Taxpayers. This determination, therefore, will be limited to the assessments issued for the 2018 and 2019 taxable years.
DETERMINATION
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 “[t]he 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 addition, filing a notice of intent to appeal does not satisfy or extend the 90-day limitations period. See Title 23 VAC 10-20-165 B 2 and D 4.
In this instance, the assessments issued to the Taxpayers were dated March 12, 2021. Based on the provisions of Virginia Code § 58.1-1821 and Title 23 VAC 10-20-165, the Taxpayers’ complete appeal must have been filed by June 10, 2021. The Taxpayers filed a notice of intent to appeal on April 9, 2021, however, as noted above, that did not extend the 90-day limitations period. The Taxpayers filed their appeal on March 22, 2022, well after the 90-day limitations period. Accordingly, the Taxpayers’ application for correction is barred by the statute of limitations.
The Taxpayers will receive updated bills that will include accrued interest to date. The Taxpayers should remit the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collection actions.
The Code of Virginia section and regulations cited are available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4127.X