Tax Type
Retail Sales and Use Tax
Description
Taxpayer was not a corporate officer as defined in Va. Code § 58.1-1813.
Topic
Persons Subject to Tax
Records/Returns/Payments
Responsible Officer
Date Issued
09-27-2011
September 27, 2011
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the "Taxpayer"), in which you request correction of a converted retail sales and use tax assessment issued for the period January 2005 through April 2008.
FACTS
According to the Department's records, the Taxpayer was a corporate officer for ***** (the "Company"). Because the Company failed to pay a retail sales and use tax assessment issued for the period January 2005 through April 2008 before it dissolved, the liability was converted to the Taxpayer and assessed accordingly.
Although the Taxpayer's Social Security number appears on several income tax returns of the Company, the Taxpayer submits an affidavit that she has never been a shareholder, officer, director or employee of the Company. As such, the Taxpayer claims that she is not a corporate officer as defined in Va. Code § 58.1-1813 and is not liable for the assessment in question.
I understand that a memorandum of lien was previously issued to the Taxpayer but has since been vacated.
DETERMINATION
When a corporation fails or is unable to pay its tax deficiencies, the Department may convert the assessments to the corporate officers pursuant to Va. Code § 58.1-1813. This statute defines the term "corporate officer" as an officer of the corporation who is under a duty to perform on behalf of the corporation the act in respect of which the violation occurs and who (1) had knowledge of the failure and (2) had the authority to prevent it. Virginia Code § 58.1-1813 requires that the failure to pay over the taxes be willful. Under the standard of willfulness applied by the courts, all that needs to be shown is that the act was "voluntary, conscious, and intentional." Hewitt v. U.S., 377 F.2d 921, 924 (5t" Cir. 1967).
Based on all of the available facts and evidence, it appears that the Taxpayer's Social Security number was erroneously used on the Company's tax returns. It also appears that the Taxpayer was not involved with the Company in the capacity of a corporate officer or employee. Accordingly, it is my, conclusion that the Taxpayer was not a corporate officer as defined in Va. Code § 58.1-1813. As such, the converted assessment in question will be abated in full.
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 about this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
-
-
-
-
-
-
-
- Sincerely,
-
-
-
-
-
-
Craig M. Burns
-
-
-
-
-
-
-
- Tax Commissioner
-
-
-
-
-
-
AR/1-4687792596.R
Rulings of the Tax Commissioner