Document Number
10-271
Tax Type
Individual Income Tax
Description
Taxpayer wants an exception to the statute of limitations in her case.
Topic
Statute of Limitations
Date Issued
12-16-2010


December 16, 2010



Re: § 58.1-1821 Application: Individual Income Tax

Dear *****:

This will reply to your letter in which you appeal the denial of an individual income tax refund request submitted by you (the "Taxpayer") for the taxable year ended December 31, 2002.

FACTS


The Department received information from the Internal Revenue Service (IRS) that tax documents for the 2002 taxable year were sent to the Taxpayer at a Virginia address. The Taxpayer did not file a 2002 Virginia individual income tax return. The Department requested additional information from the Taxpayer in order to determine her domicile for that taxable year. When adequate response was not received, the Department issued an assessment in February 2005. In February 2008, the assessment was partially satisfied by an offset of the Taxpayer's federal income tax refund. The Taxpayer provided documentation on May 5, 2010, showing that she was a domiciliary resident of another state in 2002, and requested a refund of the offset payment.

The Department abated the remaining assessment, but did not issue a refund of the overpayment because the statute of limitations had expired. The Taxpayer appeals the Department's denial of the refund request, citing personal circumstances. She asks that the Department make an exception to the statute of limitations in her case.

DETERMINATION


In general, Va. Code § 58.1-499 D specifies that the Department cannot issue a refund, "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.]

Title 58.1 of the Code of Virginia does include a number of exceptions to the general rule for individual income taxpayers. The exceptions, however, are limited to specific scenarios and are strictly construed. For example, pursuant to the authority granted the Tax Commissioner by Va. Code § 58.1-1824, a protective claim for refund may be filed within three years of the date of an assessment. Such a claim can be held pending the outcome of another case before a court or maybe decided based on its merits under Va. Code § 58.1-1821.

In addition, Virginia Code § 58.1-1823 A allows any person to file an amended return with the Department within the later of:
    • 1. three years from the last day prescribed by law for the timely filing of a return;
    • 2. one year from the final determination of any change or correction in the liability for federal income tax, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction;
    • 3. two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issue relating solely to the prior amended return and that the refund does not exceed the amount of the payment with such prior amended return;
    • 4. two years from the payment on assessment, provided that the amended return raises issues relating solely to the assessment and that the refund does not exceed the amount of such payment; or
    • 5. one year from the final determination of any change or correction in the income tax of the taxpayer for any other state provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to the change or correction.

In this case, the assessment was issued to the Taxpayer on February 2, 2005. Payment on the assessment was made on February 28, 2008. I have thoroughly reviewed the facts and the Taxpayer's circumstances, but I am unable to find any provision under Title 58.1 of the Code of Virginia that would authorize me to grant the Taxpayer's request for refund because it was submitted after all applicable statute of limitation provisions expired. While I empathize with your situation, I am bound by the clear requirements under the law. Accordingly, your request for refund for the 2002 taxable year is denied.

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 website. If you have any questions regarding this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
                • Sincerely,


                • Linda D. Foster
                  Deputy Tax Commissioner



AR/1-4482218004.D


Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46