Tax Type
Fiduciary Income Tax
Description
Interest Refund, Fiduciary Income Tax
Topic
Payment and Refund
Date Issued
04-29-2002
April 29, 2002
Re: § 58.1-1821 Application: Fiduciary Income Tax
Dear *****:
This will reply to your letter in which you contest the amount of a refund of fiduciary income tax issued to the ***** (the "Taxpayer") for the taxable year ended December 31, 1996.
FACTS
In April 1997, the Taxpayer's executrix (the "Administrator") filed an extension request on behalf of the Taxpayer for the taxable year ended December 31, 1996 and paid the estimated income tax. In August 1998, the Department received a 1996 fiduciary income tax return for the Taxpayer showing an overpayment of the tax. Interest on the refund was computed from 60 days after the postmarked date of this return. The Taxpayer contends that the original 1996 fiduciary income tax return was timely filed on behalf of the Taxpayer in October 1997 and that additional refund interest is due based on the earlier filing date.
DETERMINATION
Code of Virginia § 58.1-1833 provides in pertinent part:
A. Interest shall be allowed and paid upon the overpayment of any tax administered by the Department, the refund of which is permitted or required under the provisions of this article, or on moneys improperly collected from the taxpayer and refunded pursuant to § 58.1-1822, at a rate equal to the rate of interest established pursuant to § 58.1-15. Such interest shall accrue from a date sixty days after payment of the tax, or sixty days after the last day prescribed by law for such payment, whichever is later, and shall end on a date determined by the Department preceding the date of the refund check by not more than thirty days. Notwithstanding the above, any tax refunded pursuant to a court order or otherwise as a result of an erroneous assessment shall bear interest from the date the assessment was paid. No interest will be paid on sales taxes refunded to a dealer unless the dealer agrees to pass such interest on to the purchaser.
B. For purposes of this section:
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- (1) Any income tax deducted and withheld at the source and paid to the Department, and any amount paid as estimated tax, shall be deemed to have been paid on the day on which the return for such year's income was filed, or the last day prescribed by law for filing such return, whichever is later;
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In short, Code of Virginia § 58.1-1833 defines the date of overpayment to be the date the return was filed or the due date for such filing, whichever is later. Because the Administrator filed an extension for the filing of the Taxpayer's 1996 fiduciary tax return, refund interest would accrue on the overpayment of tax 60 days from the date that an original return was filed.
The Department's records indicate that a 1996 fiduciary tax return was filed on behalf of the Taxpayer in August 1998. The Administrator contends that the Taxpayer's 1996 fiduciary income tax return was timely filed in October 1997 and that the fiduciary income tax return filed in August 1998 is an amended return. However, the Administrator has produced no evidence to demonstrate that the Taxpayer's 1996 original fiduciary income tax return was filed in October 1997.
Based on the documentation available, I must conclude that the Department computed the interest on the refund in accordance with the above statute, and there is no basis for a refund of additional interest.
A copy of the Code of Virginia section cited has been attached for reference purposes. The Code of Virginia and other documents are also available online in the Tax Policy Library section of the Department's web site located at www.tax.state.va.us. If you have any further questions regarding this case, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/37865B
Rulings of the Tax Commissioner