Tax Type
Individual Income Tax
Description
Disallowed the overpayment credit claiming a refund statute of limitations expired.
Topic
Credits
Statute of Limitations
Date Issued
12-13-2011
December 13, 2011
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you appeal the Department's denial of the application of an overpayment credit for individual income tax paid by ***** (the "Taxpayer") for the taxable year ended December 31, 2004.
FACTS
The Taxpayer requested and was granted an extension to file his 2004 Virginia individual income tax return. The Taxpayer filed his 2004 return after the extended due date. The return reported an overpayment that the Taxpayer requested be credited to the 2005 taxable year. The Department disallowed the overpayment credit claimed on the 2005 return because the statute of limitations for claiming a refund or overpayment credit had expired.
The Taxpayer appeals the Department's disallowance of the overpayment credit claimed on the 2005 return. He asserts that he suffered from severe medical problems and was unable to timely prepare and file his Virginia return.
DETERMINATION
Virginia Code § 58.1-499 A provides that in the case of any overpayment of any tax, whether by reason of excessive withholding, overestimating and overpaying estimated tax, or error on the part of the taxpayer, the Tax Commissioner shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part:
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- No refund under this section . . . shall be made . . . 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.]
Although the Taxpayer requested that any overpayment of tax for the 2004 taxable year be applied against any income tax liability for the 2005 taxable year instead of a refund, the laws regarding refunds still apply. See Public Document (P.D.) 09-88 (5/28/2009).
In this case, the Taxpayer's extension of time to file his 2004 return, previously granted, became invalid when the original return was not filed by the extended due date, November 1, 2005. As such, the Taxpayer had three years from the original due date, May 3, 2005 (because May 1 was on a Saturday), in which to file a timely request to credit an overpayment of tax for the 2004 taxable year to the 2005 taxable year. The Taxpayer filed his original Virginia individual income tax return for the 2004 taxable year in September 2008. The statute of limitations for filing a return crediting an overpayment for the 2004 taxable year expired three years after the last day prescribed by law to timely file a return as prescribed under Va. Code § 58.1-341, i.e., May 3, 2008.
In addition, Va. Code § 58.1-341 A requires that a taxpayer file an individual income tax return by May 1 of the year following the tax year for which the return is filed. Virginia Code § 58.1-341 F provides that an individual who is unable to make a return because of a disability has the responsibility of having such return filed by a fiduciary or duly authorized agent. Thus, Virginia law addresses the requirements of filing returns for taxpayers who have disabilities. While a severe illness or medical condition may be considered a disability for purposes of Va. Code § 58.1-341 F, the statute does not provide for the suspension of the statute of limitations for an individual who is mentally or physically disabled. See P.D. 10-204 (9/2/2010).
Because the Taxpayer's return was filed after May 3, 2008, I must deny the request to credit the 2004 overpayment to the 2005 taxable year. While I empathize with the Taxpayer's 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.
The Code of Virginia sections and public documents cited are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.virginia.gov. 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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- Craig M. Burns
Tax Commissioner
- Craig M. Burns
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AR/1-4815053958.B
Rulings of the Tax Commissioner