Tax Type
Individual Income Tax
Description
Late filed amended return refund request denied.
Topic
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 ***** (the "Taxpayers") for the taxable year ended December 31, 2004.
FACTS
The Taxpayers, a husband and a wife, made an early withdrawal from the husband's retirement plan in early 2004. The plan erroneously issued a federal information return (1099-R) reporting the distribution in 2003. The Taxpayers reported the income on their 2003 federal and Virginia income tax returns.
The plan issued a corrected 1099-R and the Internal Revenue Service (IRS) issued an assessment for the 2004 taxable year. In October 2006, the Taxpayers amended their 2003 federal income tax return in order to offset the 2004 liability.
In January 2008, the Taxpayers filed an amended Virginia individual income tax return for the 2004 taxable year. The Department processed the return and issued an assessment.
In April 2008, the Taxpayers filed an amended 2003 Virginia individual income tax return, requesting that the overpayment be applied to the 2004 underpayment. The Department determined that the amended 2003 return was filed after the statute of limitations period expired and denied the Taxpayers' request. The Taxpayers acknowledge that they filed beyond the statute of limitations to request a refund, but appeal the denial of the credit of the 2003 overpayment against the 2004 assessment contending that they paid the appropriate amount of tax.
DETERMINATION
Under Va. Code § 58.1-311, a taxpayer audited by the IRS is required to file an amended return and report the changes to the Department within one year of the final determination of the change. 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. If such amended returns are not filed, the Department may make an assessment of additional tax based on the federal adjustments at any time pursuant to Va. Code § 58.1-312.
The Department has consistently denied refund offset requests in circumstances similar to the Taxpayers. See Public Document (P.D.) 90-20 (01/11/1990), P.D. 95-155 (6/13/1995), P. D. 96-137 (6/17/1996), P. D. 97-224 (5/16/1997), P. D. 00-140 (7/31 /2000), and P.D. 06-37 (4/5/2006).
Based on the information provided, the final determination for the change to the Taxpayers' 2003 federal taxable income occurred October 20, 2006. Based on the final determination date, the Taxpayers were required to file their amended 2003 Virginia income tax return on or before October 22, 2007. The Taxpayers did not file the amended 2003 return with the Department until April 2008, well beyond the statutorily required period.
While I empathize with your situation, I am bound by the clear requirements under the law. The Tax Commissioner is not empowered to waive the statute of limitations period in this situation. Accordingly, I must deny the Taxpayers' request for the abatement of the 2004 assessment. A revised bill, reflecting the payment that the Taxpayers have made, along with interest accrued to date, will be sent to the Taxpayers. No additional interest will accrue provided the outstanding balance in paid within 30 days from the date of the revised bill.
The Code of Virginia sections and public documents 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/1-2760753716.B
Rulings of the Tax Commissioner