Tax Type
Individual Income Tax
Description
Request for consideration; Liability less than estimated
Topic
Penalties and Interest
Statute of Limitations
Date Issued
12-21-2001
December 21, 2001
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****
This will reply to your letter in which you ask that the department accept as filed original individual income tax returns for the 1992 through 1997 taxable years on behalf of your clients, ***** (the "Taxpayers"). I apologize for the delay in the department's response.
FACTS
The Taxpayers did not timely file individual income tax returns for the 1992 through 1997 taxable years. For the 1992, 1994, 1996 and 1997 taxable years, the Taxpayers were assessed tax, penalty, and interest. In 1998, the Taxpayers paid the 1992 and 1994 assessments. The final payment that was applied to the 1992 assessment was made in October 1998. The final payment that was applied to the 1994 assessment was made in November 1998.
In February 2001, the Taxpayers filed original returns for the 1992 through 1997 taxable years. The tax reported on the 1992 and 1994 returns is substantially less than the assessments paid in 1998. You are requesting that the excess tax that was assessed and paid for the 1992 and 1994 taxable years be used to pay the remaining tax due for the 1993 and 1995 through 1997 taxable years as indicated on the original returns.
DETERMINATION
Code of Virginia § 58.1-499, copy enclosed, which provides in pertinent part:
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- In the case of any overpayment of any tax .... whether by reason of excessive withholding, overestimating and overpaying estimated tax, error on the part of the taxpayer, . . . the Tax Commissioner shall order a refund of the amount of the overpayment to the taxpayer.
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- . . .nor shall any refund of any amount under this section be made, whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return .... (Emphasis added.)
Although the Taxpayers have not requested a refund of any money to them and instead have requested that any overpayment of tax for the 1992 and 1994 taxable years be applied to subsequent taxable years, the laws regarding refunds still apply. As stated above, Code of Virginia § 58.1-499 requires that an application for refund must be received within three years from the last day prescribed by law for the timely filing of the return. Because the due date for 1992 returns was May 1, 1993, the 1992 return should have been received by May 1, 1996. Likewise, the 1994 return should have been received by May 1, 1998. Under Code of Virginia § 58.1-499, a refund or overpayment credit for the 1992 and 1994 taxable years cannot be granted because the original individual income tax returns were not filed until February 2001.
The Taxpayers' original individual income tax returns for 1992 through 1997 taxable years have been forwarded for processing. Assessments including applicable tax, penalty, and interest will be issued for the 1993 and 1995 taxable years and the 1992 and 1994 overpayment credits will be denied. The current assessments for the 1996 and 1997 taxable years will be adjusted accordingly.
If you have any questions about this determination, you may contact ***** in the department's Office of Policy and Administration, Policy Development, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
PD/33125G
Rulings of the Tax Commissioner