Tax Type
Individual Income Tax
Description
Failed to file a timely individual income tax return; Some income not reported
Topic
Computation of Income
Federal Conformity
Persons Subject to Tax
Records/Returns/Payments
Date Issued
01-11-2008
January 11, 2008
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This is in reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the "Taxpayer") for the taxable year ended December 31, 2003.
FACTS
The Taxpayer is a Virginia resident who failed to file a timely individual income tax return for the 2003 taxable year. The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer had income for the 2003 taxable year and issued an assessment.
The Taxpayer subsequently filed an individual income tax return that reported only a portion of the income identified through the IRS. The Taxpayer contends that the income not reported was attributable to a trucking business owned and operated by another individual (Taxpayer B). The Taxpayer states that her involvement in Taxpayer B's business ended in 2001. The Taxpayer requests abatement of the portion of the 2003 taxable year assessment related to income from the trucking business.
DETERMINATION
Virginia Code § 58.1-301 provides that terminology and references used in Title 58.1 of the Code of Virginia will 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 proper Virginia return, IRC § 6103(d) authorizes the Department to obtain information from the IRS that will help in determining the resident's tax liability.
Subsequent to being contacted by the Department, the Taxpayer filed a Virginia individual income tax return for the 2003 taxable year, the Taxpayer contends that a portion of the income, attributable to her by the IRS, resulted from a business owned and operated by Taxpayer B in 2003. She did have a personal and business relationship with Taxpayer B at one time, but asserts that she has had no involvement in the business affairs since 2001.
Virginia Code § 58.1-205 provides that any assessment of a tax by the Department shall be deemed prima facie correct. Inasmuch as the Taxpayer has not been able to show that the assessment issued by the Department or the information provided by the IRS is incorrect, I am unable to find that the income on which the assessment is based is incorrect.
Payment of the outstanding assessment for the 2003 taxable year, as shown on the enclosed schedule, should be sent to: Virginia Department of Taxation, Office of Policy and Administration, Appeals and Rulings, Post Office Box 1880, Richmond, Virginia 23218-1880, Attention: *****. No additional interest will accrue provided the outstanding balance is paid within 30 days from the date of this letter.
The Code of Virginia sections cited, along with 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 regarding this determination, you may contact ***** at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-1406803204E
Rulings of the Tax Commissioner