Tax Type
Individual Income Tax
Description
Failure to file an amended Virginia income tax return reflecting the IRS adjustment.
Topic
Federal Conformity
Residency
Taxable Income
Date Issued
05-09-2012
May 9, 2012
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of individual income tax assessment issued ***** (the "Taxpayer") for the taxable year ended December 31, 2008.
FACTS
The Taxpayer was audited by the Internal Revenue Service (IRS) for the 2008 taxable year. As a result of the audit, the Taxpayer's federal adjusted gross income (FAGI) was increased. The Taxpayer failed to file an amended Virginia income tax return reflecting the IRS adjustment.
The IRS notified the Department of the change in the Taxpayer's FAGI, and the Department issued an assessment for additional tax and interest. The Taxpayer appeals the assessment, contending she did not reside in Virginia until February 2008. She believes the assessment to be incorrect and requests a review.
DETERMINATION
IRS Adjustment
Virginia Code § 58.1-311 requires any individual to report a change or correction in federal taxable income (FAGI) within one year of the final determination of such change or correction by filing an amended return with the Department. If the taxpayer fails to file an amended return, Va. Code § 58.1-312 A 3 permits the Department to assess the appropriate tax at any time.
In this case, the Taxpayer failed to file an amended Virginia individual income tax return as required by Va. Code § 58.1-311. The Department issued an assessment based on the final figures computed by the IRS, as authorized under Va. Code § 58.1-312.
The assessment is based on the Taxpayer's original 2008 individual income tax return, which indicated she was a resident for all of 2008. The Taxpayer now indicates that she was a Virginia resident for only part of the year.
Part-Year Resident
The Taxpayer asserts that she did not move back into Virginia until February 2008. Under such circumstances, Va. Code § 58.1-303 provides that a person who becomes a resident of Virginia before the end of a taxable year is subject to taxation during the period in which he is a Virginia resident and is taxed as a resident only for the portion of the year that he resides in Virginia.
The assessments were made based on the best information available to the Department. The Taxpayer may have additional information that more accurately reflects her taxable income. As such, the Taxpayer should file a Virginia part-year individual income tax return (Form 760 PY) for the 2008 taxable so that the Department can make appropriate adjustments to her income tax liability.
The Taxpayer should file the requested return within 30 days of the date of this letter. Please send the return to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23218-7203, Attention: *****. Once the amended return is received, it will be processed and the assessment will be adjusted accordingly. If such return is not filed within the time permitted, the 2008 assessment will be upheld as issued and collection action will resume.
The Code of Virginia sections cited, along with other reference documents, 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 concerning this determination, you may contact ***** at *****.
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- Sincerely,
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Craig M. Burns
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- Tax Commissioner
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AR/1-971077949.E
Rulings of the Tax Commissioner