Tax Type
Retail Sales and Use Tax
Description
Waiver to extend the statute of limitations
Topic
Collection of Delinquent Tax
Date Issued
05-19-2000
May 19, 2000
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek correction of a retail sales and use tax assessment issued to ***** (the "Taxpayer") for the period October 1994 through September 1997. Based on the circumstances, your letter is being treated as an application for correction of an assessment under Code of Virginia § 58.1-1821. I apologize for the delay in the department's response.
FACTS
The Taxpayer was audited by the department and believes that the assessment for the period October 1994 through April 1996 is invalid. The Taxpayer maintains that the department's assessment was made after a waiver to extend the statute of limitations for the audit period had expired. The Taxpayer signed a waiver of time limitation for the assessment of taxes through May 31, 1999. The notice of assessment for the audit period is dated May 28, 1999, but the Taxpayer's audit report is postmarked June 14, 1999. In addition, the auditor's supervisor signed the audit report on June 1, 1999. The Taxpayer suggests that receipt of the audit report after the expiration of the waiver and the audit supervisor's late approval date of the audit renders the assessment for the period October 1994 through April 1996 invalid.
DETERMINATION
Title 23 of the Virginia Administrative Code 10-20-160(E), copy enclosed, defines the term "assessment" as "the act of determining that a tax (or additional tax) is due and the amount of such tax." This same section further states that:
When an assessment is made by the Department, a written notice of the assessment must be delivered to the taxpayer by an employee of the Department or mailed to the taxpayer at his last known address. The date that such notice is mailed or delivered is the date of the assessment for the purpose of any limitations on the time in which administrative and judicial remedies are available and for any other administrative purposes.
This section then specifically states that a written notice of assessment by the department is made on a form clearly labeled "Notice of Assessment" setting forth the date of the assessment, amount of assessment, and other pertinent data. The field audit report, which discloses the basis on which an assessment is made, does not constitute an official notice of assessment. The mailing of the Taxpayer's "Notice of Assessment" dated May 28, 1999, constitutes the official assessment by the Commonwealth of Virginia. Accordingly, I find that the assessment of tax and interest was issued within the statute of limitations as extended by the signed waiver of time limitations, and there is no basis to abate any portion of the assessment.
Due to the delay in responding to the Taxpayer, I will agree to waive the accrual of additional interest on the outstanding balance of the assessment if the Taxpayer submits payment for the balance of $**** within thirty days from the date of this letter. If payment is not received within thirty days, an updated notice of assessment, which contains accrued interest, will be mailed to the Taxpayer. If you have any questions, please contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/24298S
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek correction of a retail sales and use tax assessment issued to ***** (the "Taxpayer") for the period October 1994 through September 1997. Based on the circumstances, your letter is being treated as an application for correction of an assessment under Code of Virginia § 58.1-1821. I apologize for the delay in the department's response.
FACTS
The Taxpayer was audited by the department and believes that the assessment for the period October 1994 through April 1996 is invalid. The Taxpayer maintains that the department's assessment was made after a waiver to extend the statute of limitations for the audit period had expired. The Taxpayer signed a waiver of time limitation for the assessment of taxes through May 31, 1999. The notice of assessment for the audit period is dated May 28, 1999, but the Taxpayer's audit report is postmarked June 14, 1999. In addition, the auditor's supervisor signed the audit report on June 1, 1999. The Taxpayer suggests that receipt of the audit report after the expiration of the waiver and the audit supervisor's late approval date of the audit renders the assessment for the period October 1994 through April 1996 invalid.
DETERMINATION
Title 23 of the Virginia Administrative Code 10-20-160(E), copy enclosed, defines the term "assessment" as "the act of determining that a tax (or additional tax) is due and the amount of such tax." This same section further states that:
When an assessment is made by the Department, a written notice of the assessment must be delivered to the taxpayer by an employee of the Department or mailed to the taxpayer at his last known address. The date that such notice is mailed or delivered is the date of the assessment for the purpose of any limitations on the time in which administrative and judicial remedies are available and for any other administrative purposes.
This section then specifically states that a written notice of assessment by the department is made on a form clearly labeled "Notice of Assessment" setting forth the date of the assessment, amount of assessment, and other pertinent data. The field audit report, which discloses the basis on which an assessment is made, does not constitute an official notice of assessment. The mailing of the Taxpayer's "Notice of Assessment" dated May 28, 1999, constitutes the official assessment by the Commonwealth of Virginia. Accordingly, I find that the assessment of tax and interest was issued within the statute of limitations as extended by the signed waiver of time limitations, and there is no basis to abate any portion of the assessment.
Due to the delay in responding to the Taxpayer, I will agree to waive the accrual of additional interest on the outstanding balance of the assessment if the Taxpayer submits payment for the balance of $**** within thirty days from the date of this letter. If payment is not received within thirty days, an updated notice of assessment, which contains accrued interest, will be mailed to the Taxpayer. If you have any questions, please contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/24298S
Rulings of the Tax Commissioner