Document Number
05-71
Tax Type
Individual Income Tax
Description
Refusal to file the requested individual returns
Topic
Clarification
Property Subject to Tax
Date Issued
05-06-2005


May 6, 2005



Re: § 58.1-1821 Application: Individual Income Tax

Dear *****:

This will reply to your letter in which you seek correction of the Virginia individual income tax assessment issued to you, ***** for the taxable years ended December 31, 2000 and 2001. I apologize for the delay in responding to your letter.

FACTS

The Department obtained information from the Internal Revenue Service ("IRS") indicating that you, a Virginia resident, received taxable income for the 2000 and 2001 taxable years. A review of the Department's records indicated you had not filed a Virginia individual income tax return for either taxable year. Letters were sent requesting that you file the proper Virginia returns or provide evidence to support your claim that your income was not taxable. When an adequate response was not received, the Department issued assessments based on the available information.

You state that you are not subject to a mandatory income tax and that you can find no law, statute, regulation or federal register citation applicable to you that imposes a tax liability or legal requirement to file state or federal income tax forms. You request that the Department abate the assessments.

DETERMINATION

Virginia Code § 58.1-301 provides that terminology and references used in Title 58.1 of the Code of Virginia have the same meaning as provided in the Internal Revenue Code ("IRC") unless a different meaning is clearly required. For individual income tax purposes, Virginia "conforms" to federal law in that it starts the computation of Virginia taxable income with federal adjusted gross income ("FAGI"). Income included in the FAGI of a Virginia resident is subject to taxation by Virginia unless it is specifically exempt as a Virginia modification pursuant to Va. Code § 58.1-322.

Virginia Code § 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 Va. Code § 58.1-321. When a resident does not file a Virginia return, IRC § 6103(d) authorizes the Department to obtain information from the IRS that will help in determining the resident's tax liability. Additionally, even if a resident is not required to file a federal return but has sufficient Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia income tax return pursuant to Va. Code § 58.1-341.

In the case at hand, the Department issued individual income tax assessments to you for failure to file 2000 and 2001 individual income tax returns. You have not shown that either Virginia individual income tax return was filed or that the information provided by the IRS is incorrect. Pursuant to Va. Code § 58.1-111, the Department has the authority to estimate the amount of taxes due when a taxpayer fails to file a valid state tax return. Virginia Code § 58.1-312 further provides that an assessment can be issued at any time if a return is not filed. Finally, Va. Code § 58.1-205 provides that any assessment of a tax by the Department shall be deemed prima facie correct.

You have failed to provide objective evidence as to the correct liability for the taxable years at issue. Your claim that you are not subject to income taxation has no basis in fact or Virginia law. Based on the information provided, I find no basis to abate the Virginia individual income tax assessments issued for the 2000 and 2001 taxable years. A schedule is enclosed showing the balance of the assessments.

You are requested to file Virginia individual income tax returns for the 2000 and 2001 taxable years, along with any other delinquent income tax returns, within 30 days from the date of this letter. Refusal to file the requested returns or any future returns in accordance with Virginia law by continuing to make the claims you have stated in your letter would justify the imposition of a 100% fraud penalty and other legal actions to collect the proper tax.

Returns and payments may be sent to: Virginia Department of Taxation, Office of Policy and Administration, Appeals and Rulings, Post Office Box 27203, Richmond, Virginia 23261-7203, Attention: *****.

The Code of Virginia sections cited and other reference documents are available on-line in the Tax Policy Library section of the Department's web site, located at www.policylibrary.tax.virginia.gov. If you have any questions regarding this determination, you may contact ***** at *****.
              • Sincerely,

              • Kenneth W. Thorson
                Tax Commissioner




AR/51768E


Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46