Tax Type
Individual Income Tax
Land Preservation Tax Credit
Description
Land Preservation Tax Credit
Topic
Land Preservation Tax Credit
Date Issued
05-30-2014
May 30, 2014
Re: § 58.1-1824 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek a refund of the Virginia individual income tax paid by ***** (the "Taxpayers") for the taxable year ended December 31, 2008. I apologize for the delay in responding to your request.
FACTS
In November 2008, the ***** (the "Donor") conveyed a conservation easement on a tract of land to a donee. Pursuant to the conveyance of the easement, the Donor registered the donation with the Department for purposes of the Land Preservation Tax Credit (the "Credit"). The Donor requested and was awarded the Credit based on an appraisal by an unrelated third party appraiser contracted by the Donor. Subsequently, the Donor transferred a portion of the Credit to the Taxpayers. The Taxpayers claimed the Credit on their 2008 Virginia individual income tax return.
A subsequent review of the Donor's application raised questions about the value of the easement for which the Credit was granted. The Department commissioned an appraisal from an independent third party appraiser. Based on this appraisal, the Credit was revalued and assessments were issued against the individuals that received the transferred Credit. As a result, additional tax and interest was assessed against the Credit holders, including the Taxpayers, for the 2008 taxable year.
In June 2012, the Donor appealed the revaluation of the Credit. The Taxpayers paid the assessment and filed a protective claim referencing the appeal filed by the Donor.
DETERMINATION
Protective Claim
Virginia Code § 58.1-1824 permits taxpayers to file a protective claim for refund within three years of the date of an assessment. Pursuant to the authority granted the Tax Commissioner under Va. Code § 58.1-1824, a protective claim for refund can be held pending the outcome of another case before the courts or the claim may be decided based upon its merits pursuant to Va. Code § 58.1-1821. As permitted by statute, the Taxpayers' request has been treated as an appeal under Va. Code § 58.1-1821.
Land Preservation Tax Credit
The Department issued Public Document (P.D.) 14-61 (4/30/2014) upholding the valuation of the easement on the basis that the third party appraisal commissioned by the Department most accurately valued the easement. As such, the assessment issued to the Taxpayers for the 2008 taxable year is upheld. Accordingly, the Taxpayers' request for a refund is denied.
The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's website. If you have any questions about this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
-
-
-
-
-
-
-
- Sincerely,
-
-
-
-
-
-
Craig M. Burns
Tax Commissioner
AR/1-5221308721.B
Rulings of the Tax Commissioner