Tax Type
Individual Income Tax
Description
Individual subject to Virginia Income tax
Topic
Persons Subject to Tax
Residency
Date Issued
03-08-2002
March 8, 2002
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****
This will reply to your letter concerning Virginia individual income tax. Your letter has been treated as an application for correction of an assessment pursuant to Code of Virginia § 58.1-1821. I apologize for the delay in the department's response.
FACTS
You are a Virginia resident who claims to be a "natural-born, free citizen of the Michigan Republic by birth." You also state that you are a nonresident alien for federal income tax purposes and that as such, your income is exempt from Virginia income tax and employer withholding.
DETERMINATION
Code of Virginia § 58.1-301 provides that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code unless a different meaning is clearly required. The Virginia individual income tax "conforms" to federal law because it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). To the extent that income is included in FAGI, it is also subject to taxation by Virginia.
Code of Virginia § 58.1-341 provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return unless the resident is exempt from filing under Code of Virginia § 58.1-321. Code of Virginia § 58.1-302 specifically defines "resident" to include every person domiciled in Virginia and every person who maintains a place of abode in Virginia for an aggregate of more than 183 days of the taxable year. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia income tax return. When a resident does not file a proper Virginia return, Internal Revenue Code § 6103(d) authorizes the department to obtain information from the Internal Revenue Service that will help in determining the resident's tax liability.
Code of Virginia § 58.1-461 provides that every employer paying wages must deduct and withhold Virginia individual income tax from the wages of each employee unless the employer has a valid exemption certificate on file for the employee certifying that the employee incurred no liability for income tax for the preceding taxable year and anticipates that he will incur no liability for income tax for the current taxable year.
You have provided no documentation to show that you are not subject to income tax as a Virginia resident or exempt from employer withholding. Further a person who fails to file income tax returns based solely on such a claim has intentionally understated his or her income tax liability with the intent to evade tax and would be subject to a 100% fraud penalty pursuant to Code of Virginia § 58.1-308. Further, one who files an application for correction pursuant to Code of Virginia § 58.1-1821 based solely on such claims has no purpose either than to hinder and delay collection of the proper tax liability. Consequently, collection activity need not be suspended on outstanding assessments while such applications for correction are being considered.
If you have any questions regarding this determination, you may contact ***** in the department's Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/31933E
Rulings of the Tax Commissioner