Tax Type
Corporation Income Tax
Withholding Taxes
Description
Taxpayer's application for correction is barred by the statute of limitations
Topic
Statute of Limitations
Taxpayers' Remedies
Date Issued
02-06-2006
February 6, 2006
Re: § 58.1-1821 Application:
Dear *****:
This will reply to your letter in which you contest assessments of corporation income tax and withholding tax issued to ***** (the "Taxpayer"), the sole owner of ***** (the "Corporation"). I apologize for the delay in the responding to your appeal.
The Department issued an assessment to the Corporation for corporate income tax, penalty and interest for the taxable year ended December 31, 2002. In addition, the Corporation received assessments for withholding tax for the second and fourth quarters of the taxable year 2001, the taxable year 2002, and the first quarter of 2003. Upon failure to collect the deficiencies from the Corporation, the Department assessed the Taxpayer penalties in the amount of the taxes, penalties and interest owed by the Corporation pursuant to Va. Code § 58.1-1813.
The Taxpayer contests conversion of the assessments, asserting that she was not an employee and was not involved in any of the day-to-day operations of the Corporation. She maintains that she had very little knowledge of the day-to-day business activities of the Corporation, and the vice president had overall decision- making authority, which included payroll and payment of taxes. The Taxpayer claims that she is not a corporate officer as defined in Va. Code § 58.1-1813 and, therefore, she cannot be held liable for the taxes, penalties and interest assessed to the Corporation.
Virginia Code § 58.1-1821 provides that "[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner." [Emphasis added.] In this case, the assessments issued to the Taxpayer were dated October 27, 2003. Pursuant to the provisions of Va. Code § 58.1-1821, the Taxpayer was required to file its administrative appeal with the Tax Commissioner no later than January 25, 2004.
The Department's records indicate the Taxpayer filed an administrative appeal with the Department by letter dated June 1, 2004, well after the expiration of the 90-day limitations period. Therefore, the Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations.
I note that the assessments at issue are currently being paid through a partial payment agreement. Therefore, collection action will be held in accordance with the terms of the partial payment agreement so long as the Taxpayer continues to honor the terms of the agreement.
The Code of Virginia section cited and other reference documents are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response, you may contact ***** in the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Kenneth W. Thorson
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- Tax Commissioner
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- Kenneth W. Thorson
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AR/55605E
Rulings of the Tax Commissioner