Tax Type
Individual Income Tax
Description
Taxpayers timely filed their amended Virginia return reporting the NOL carryback
Topic
Federal Conformity
Filing Status
Records/Returns/Payments
Date Issued
08-16-2010
August 16, 2010
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter concerning the denial of a Virginia individual income tax refund for ***** (the "Taxpayers") for the taxable year ended December 31, 1996. I apologize for the delay in the Department's response.
FACTS
In January 2000, the Taxpayers filed amended returns to report a net operating loss (NOL) carryback for both federal and Virginia individual income tax purposes. The Internal Revenue Service (IRS) initially denied the Taxpayers' refund claim. The Department held up processing the Virginia amended return pending the Taxpayers' resolution with the IRS.
After the Taxpayers provided additional information to the IRS, the amended federal return was accepted as filed and a refund was issued in April 2007. When the Taxpayers requested their Virginia refund, the Department concluded that the statutory period for filing the 1996 amended return had expired. The Taxpayers filed an appeal, contending the amended Virginia return was filed timely.
DETERMINATION
Pursuant to Va. Code § 58.1-1823, an amended return claiming a refund may be filed within three years from the last day prescribed by law for the timely filing of the return. When a Taxpayer files an amended return that changes the federal adjusted gross income (FAGI), the Department routinely requests proof that changes were accepted by the IRS. In this case, the IRS initially questioned the Taxpayer's 1996 amended federal return, but later accepted the net operating loss (NOL) carryback, as reported, and issued refunds.
Based on the specific facts of this case, the Taxpayers timely filed their amended Virginia return reporting the NOL carryback and the return should be processed as filed. The Department will process and review the Taxpayers' 1996 amended Virginia return and issue a refund, with applicable interest.
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 response, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Linda Foster
Deputy Tax Commissioner
- Linda Foster
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AR/1-3730479745.C
Rulings of the Tax Commissioner