Tax Type
Individual Income Tax
Description
All income resulted from Social Security payments Taxpayer question the taxability
Topic
Constitutional Provisions
Taxable Income
Date Issued
05-29-2009
May 29, 2009
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter concerning denial of a refund reported on the individual income tax return filed by ***** (the "Taxpayer") for the taxable year ended December 31, 2004.
FACTS
The Department received information from the Internal Revenue Service ("IRS") indicating the Taxpayer had income from Virginia sources. The Department requested that the Taxpayer file the proper Virginia individual income tax return or provide an explanation concerning why the income was not taxable. When an adequate response was not received, the Department issued an assessment based on the information provided by the IRS.
The Taxpayer contends that all his income resulted from Social Security payments and services performed for a non-federal entity. The Taxpayer believes he is not subject to income tax because he is a non-federal worker who did not earn any federal-connected money for federal-connected services.
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 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. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia individual income tax return. When a resident does not file a proper Virginia return, IRC § 6103(d) authorizes the Department to obtain information from the IRS that will enable the Department to determine the resident's tax liability.
Virginia Code § 58.1-205 provides that any assessment of a tax by the Department shall be deemed prima facie correct. The Taxpayer has not shown that the assessment issued by the Department or the information provided by the IRS is incorrect. He has only confirmed that income was not reported on the federal return filed for the 2004 taxable year. Further, he has failed to provide objective evidence as to the correct liability for the taxable year at issue. Consequently, I find no basis to abate the Virginia individual income tax assessment for the 2004 taxable year.
The Taxpayer is requested to file an accurate Virginia individual income tax return for the 2004 taxable year, along with payment of the balance due, within 30 days from the date of this letter. Refusal to file the requested return or any subsequent returns in accordance with Virginia law by continuing to make the claims you have stated in your letter would justify the 100% fraud penalty and other legal actions to collect the proper tax.
Returns and payments should be sent at this time to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, Post Office Box 27203, Richmond, Virginia 23261-7203, Attention: *****. Collection action will be held for 30 days, pending filing of correct returns and payment of the balance due.
The Code of Virginia sections cited 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/1-2615225368.E
Rulings of the Tax Commissioner