Tax Type
Individual Income Tax
Description
Refund of Tax
Topic
Returns and Payments
Date Issued
04-23-1999
April 23, 1999
Re: § 58.1-1821 Application: Individual Income Tax
Dear******************
This will reply to your letter in which you request that the department refund taxes collected via garnishment from ***** (the "Taxpayers') for taxable years 1990, 1991, and 1992.
FACTS
The Taxpayers did not file Virginia income tax returns for the 1990, 1991, and 1992 taxable years. During those years, taxes were withheld from the Taxpayers' wages. The Taxpayers were assessed additional taxes, interest, and penalties for the 1990, 1991, and 1992 taxable years. The assessed taxes, interest, and penalties were collected from the Taxpayers through garnishment of wages. After the statutes of limitations had expired, the Taxpayers filed amended returns for the 1990 and 1991 taxable years. These returns were denied by the department.
The Taxpayers filed an amended return for the 1992 taxable year within the statute of limitations. Subsequent to filing the amended return, the Taxpayers were issued a refund net of outstanding tax due balances for 1992 and 1993. The Taxpayers now ask for a refund of all of the garnished wages collected for 1990 and 1991. The Taxpayers reason that this refund is due because the amounts withheld for those years was more than the tax due for each of those years according to their amended returns.
DETERMINATION
The Virginia Supreme Court in Commonwealth v. Ferries, 120 Va. 827, stated, "The general rule is well settled that taxes voluntarily paid cannot be recovered back in the absence of a statute providing for their repayment.' Code of Virginia § 58.1-1823 states in pertinent part:
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- Any person filing a tax return or paying an assessment required for any tax administered by the Department of Taxation may file an amended return with the Department within the later of: (i) three years from the last day prescribed by law for the timely filing of the return; (ii) one year from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction; (iii) two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issues relating solely to such prior amended return and that the refund does not exceed the amount of the payment with such prior amended return; or (iv) two years from the payment of an assessment, provided that the amended return raises issues relating solely to such assessment and that the refund does not exceed the amount of such payment.
- Any person filing a tax return or paying an assessment required for any tax administered by the Department of Taxation may file an amended return with the Department within the later of: (i) three years from the last day prescribed by law for the timely filing of the return; (ii) one year from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction; (iii) two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issues relating solely to such prior amended return and that the refund does not exceed the amount of the payment with such prior amended return; or (iv) two years from the payment of an assessment, provided that the amended return raises issues relating solely to such assessment and that the refund does not exceed the amount of such payment.
For 1991, garnishments were made in November and December 1995. After a check of the department's records, it has been determined that the Taxpayers' amended return was received within two years of the last garnishment payment. Because the last payment is the only payment falling within the statute of limitations, it is the only payment eligible to be refunded. A refund will be issued in the amount of ***** plus an appropriate amount of interest.
While I sympathize with your present situation, the department does not have the authority to issue a refund outside of the time allowed by the Code of Virginia. I have enclosed previous rulings, P.D.'s 89-100 (3/23/89) and 94-284 (9/20/94) which present the department's policy with respect to other such refund requests. Accordingly, I can only refund you the amount indicated above. Should you have any additional questions regarding this matter, please contact ***** of the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/18505G
Rulings of the Tax Commissioner