Document Number
06-2
Tax Type
Individual Income Tax
Description
Taxpayers filed timely returns, credit for additional income taxes paid to State A
Topic
Payment and Refund
Statute of Limitations
Date Issued
01-04-2006


January 4, 2006



Re: § 58.1-1821 Application: Individual Income Tax

Dear *****:

This will respond to your letter in which you contest the denial of a refund reported on the amended Virginia individual income tax returns filed by ***** (the "Taxpayers") for the 1999 and 2000 taxable years. I apologize for the delay in responding to your appeal.

FACTS


The Taxpayers, a husband and wife, are domiciliary residents of Virginia and filed Virginia resident individual income tax returns for the 1999 and 2000 taxable years. The Taxpayers also filed nonresident individual income tax returns with the State of ***** ("State A"). Following an audit of the 1999 and 2000 nonresident tax returns, State A determined that the husband was a resident of that state during the 1999 taxable year. As a result, adjustments were made to his State A income tax return and additional tax was assessed. The husband's taxable year 2000 State A nonresident income tax return was also adjusted to subject a portion of his wages to State A income tax. State A did not adjust the wife's income, reported on the Taxpayers' State A income tax return, for the 2000 taxable year.

The Taxpayers filed amended 1999 and 2000 Virginia individual income tax returns for taxable years 1999 and 2000, claiming a credit for the additional income tax paid to State A. The Department disallowed the amended returns on the basis that the statute of limitations for filing amended individual income tax returns for the 1999 and 2000 taxable years had expired.

The Taxpayers assert that the amended Virginia individual income tax returns for the 1999 and 2000 taxable years were filed in December 2003, and therefore, were filed timely. The Taxpayers request that the Department accept the amended income tax returns, allow the credit claimed for additional income taxes paid to State A, and issue the refunds requested.

DETERMINATION


Pursuant to Va. Code § 58.1-1823, an amended return claiming a refund must be filed within the later of
    • (i) three years from the last day prescribed by law for the timely filing
        • of the return;
      (ii) one year from the final determination of any change or correction in
        • the liability of the taxpayer for any federal tax upon which the state
          tax is based, provided that the refund does not exceed the amount
          of the decrease in Virginia tax attributable to such federal change or
          correction;
      (iii) two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issues relating solely to such prior amended return and that the refund does not exceed the amount of the payment with such prior amended return; or
      (iv) two years from the payment of an assessment, provided that the amended return raises issues relating solely to such assessment and that the refund does not exceed the amount of such payment.

Pursuant to Va. Code § 58.1-9, the filing date of a return filed by mail is the date of the postmark on the envelope. The date the return is signed is not controlling. Examination of the amended 1999 Virginia individual income tax return reveals that the tax return was postmarked February 17, 2004. In accordance with Va. Code § 58.1­1823, the statute of limitations for filing an amended income tax return for the 1999 taxable year expired on May 1, 2003. Because the taxable year 1999 amended return was filed after May 1, 2003, the credit for additional taxes paid to another state cannot be allowed, and the refund requested for 1999 cannot be granted.

With respect to the amended return filed for the 2000 taxable year, the Taxpayers had filed a valid extension to file the original tax return on or before November 1, 2001. As such, the three-year period allowable for filing an amended 2000 income tax return did not expire until November 1, 2004. Accordingly, the 2000 taxable year amended return was filed within the statute of limitations. The amended 2000 Virginia income tax return will be processed as a timely filed amended return.

The Code of Virginia sections cited, along with other reference documents, are available online in the Tax Policy Library section of the Department's web site, located at www.policylibrary.tax.virginia.gov. If you have any questions about this response, you may contact ***** in the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
                • Sincerely,

                • Kenneth W. Thorson
                  Tax Commissioner



AR/54293E

Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46