Tax Type
Corporation Income Tax
Description
Taxpayer failed to timely file amended return due to filing burden by IRS's RAR
Topic
Statute of Limitations
Date Issued
04-05-2006
April 5, 2006
Re: § 58.1-1821 Application: Corporate Income Tax
Dear *****:
This will reply to your letter in which you appeal the Department's denial of a corporate income tax refund on behalf of ***** (the "Taxpayer") for the taxable year ended November 26, 2000.
FACTS
The Internal Revenue Service examined that Taxpayer for the 1999 and 2000 taxable year. The Taxpayer's federal taxable income was adjusted pursuant to a revenue agent's report ("RAR") for the taxable years at issue. Pursuant to the RAR, the Taxpayer filed amended corporate income tax returns. The amended return for the 1999 taxable years reported an additional tax and interest liability that was paid by the Taxpayer. The return for the 2000 taxable years reported an overpayment of tax and interest, and the Taxpayer requested a refund.
The Department denied the Taxpayer's request for a refund on the basis that the amended return for the 2000 taxable year was filed after the statute of limitations period expired. The Taxpayer appeals the denial of the refund, contending that it made a good faith effort to timely file its returns, but that extenuating circumstances led to its late filing.
DETERMINATION
In accordance with Va. Code § 58.1-311, a taxpayer audited by the Internal Revenue Service is required to file an amended return and report the changes to the Department within 90 days of the final determination of the change. If such changes are not reported, the Department is authorized to make adjustments to the Virginia returns at any time. See Va. Code § 58.1-312 A 3.
Further, under Va. Code § 58.1-1823, a taxpayer has three years from the last day prescribed by law for the timely filing of the return, or one year from the final determination of a federal change or correction to file an amended return to request a refund. It is incumbent upon a taxpayer to file an amended return when a refund is involved in order to protect its statutory rights to the refund.
The Taxpayer states that it failed to file timely the amended return for the 2000 taxable year because the RAR adjustments required the filing of more than 400 amended returns. While I appreciate the filing burden placed on the Taxpayer because of the RAR adjustments, Virginia law clearly states that amended returns claiming a refund because of a change in federal taxable income must be filed within three years from the last day prescribed by law for the timely filing of the return, or within one year from the final determination of the change. In this case, the Taxpayer filed the amended return for the 2000 taxable year on December 20, 2004, well after three years from the last day prescribed by law of the timely filing of the return. In addition, the amended return for refund was filed more than one year from the final determination of the federal change. Therefore, the amended return for the 2000 taxable year cannot be accepted, and the Taxpayer's refund request is denied. I sincerely regret that I am unable to accept the 2000 amended return, but the Tax Commissioner is not empowered to waive the statute of limitations.
The Code of Virginia sections cited are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.virginia.gov. If you have any questions regarding this determination, please 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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AR/56219B
Rulings of the Tax Commissioner