Tax Type
Corporation Income Tax
Description
Result of Protective Claim
Topic
Payment and Refund
Date Issued
10-25-2001
October 25, 2001
Re: § 58.1-1824 Protective Claim: Corporate Income Tax
Dear *****
This will reply to your letter in which you request the refund of tax and interest paid by the (the "Taxpayer") for the taxable years ended February 28, 1992 and 1993.
In August 2000, you filed a protective claim on behalf of the Taxpayer requesting that the department stay collection action on additional Virginia corporate income tax liability pending the outcome of litigation in the federal courts. The assessments of additional Virginia corporate income tax and interest were subsequently paid. In April 2001, the federal court ruled in favor of the Taxpayer. You request that the department issue a refund for the assessments of Virginia corporate income tax liability paid.
Code of Virginia § 58.1-1824 provides for the preservation of a taxpayer's judicial remedies by filing a claim for a refund within three years of the date such tax was assessed. The Taxpayer has timely filed a protective claim to reserve its judicial rights pending the outcome of federal litigation that addressed a federal tax audit.
Because there was no adjustment to federal taxable income as a result of the court's ruling, the assessments of Virginia corporate income tax liability will be abated and the additional income tax and interest paid will be refunded to the Taxpayer, along with applicable refund interest according to the enclosed schedule. If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/36677B
Rulings of the Tax Commissioner