Tax Type
Individual Income Tax
Description
Late filed return overpayment credit denied
Topic
Constitutional Provisions
Statute of Limitations
Date Issued
05-28-2009
May 28, 2009
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to your client, ***** (the "Taxpayer") for the taxable year ended December 31, 2004.
FACTS
The Taxpayer timely filed her 2000 Virginia individual income tax return, but failed to timely file Virginia individual income tax returns for the 2001 through 2004 taxable years. In late August 2007, she filed an amended 2000 return and original returns for 2001 through 2004.
The 2003 return reported an overpayment that she requested be credited on her 2004 tax. The Department disallowed the overpayment credit claimed on the 2003 return because the statute of limitations for claiming a refund or overpayment credit had expired. An assessment of tax, addition to tax, and interest was issued for the 2004 taxable year.
The Taxpayer contends that she filed her returns late because she was waiting for pass-through entities to finalize their financial information. She states the required information was received in August 2007, and she immediately filed the appropriate returns. The Taxpayer has requested that the assessment be abated because the returns were filed in good faith when the pass-through entities finalized their financial information. She avers that the Commonwealth suffered no financial harm because adequate estimated tax had been paid. The Taxpayer also requests that the 2003 overpayment less the amount required to satisfy the 2004 liability be carried forward to subsequent taxable years.
DETERMINATION
Virginia Code § 58.1-499 A provides that in the case of any overpayment of any tax, whether by reason of excessive withholding, overestimating and overpaying estimated tax, or error on the part of the taxpayer, the Tax Commissioner shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part:
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- No refund under this section . . . shall be made . . . whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return . . . . [Emphasis added.]
Although the Taxpayer has not requested an actual refund, but has requested that any overpayment of tax for the 2003 taxable year be applied against the assessment for 2004, the laws regarding refunds still apply. As stated above, Va. Code § 58.1-499 requires that an application for refund must be received within three years from the last day prescribed by law for the timely filing of the return. See Public Document (P.D.) 06-136 (10/30/2006).
Virginia Code § 58.1-341 A requires that taxpayers file individual income tax returns by May 1 of the year following the tax year for which the return is filed. The statute of limitations for the 2003 taxable year expired on May 1, 2007. The Taxpayer's original return for 2003 was filed on August 29, 2007. As such, the 2003 return was not filed within the limitations period provided in Va. Code § 58.1-499, and the overpayment cannot be credited to the 2004 taxable year.
Accordingly, based on the clear requirements under the law I must deny you request for the abatement of the 2004 assessment. A revised bill, with interest accrued to date, will be sent to the Taxpayer. No additional interest will accrue provided the outstanding balance is paid within 30 days from the date of the revised bill.
The Code of Virginia sections and public document cited are available on-line www.tax.virginiai.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-2555094803.B
Rulings of the Tax Commissioner