February 24, 2015
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessments issued to ***** (the "Taxpayers") for the taxable years ended December 31, 2009 through 2011.
FACTS
The Internal Revenue Service (IRS) audited the Taxpayers for the 2009 through 2011 taxable years and made a number of adjustments to their returns. The Taxpayers failed to file amended returns based on the federal changes. The Department subsequently received the audit information from the IRS and issued assessments. The Taxpayers appeal the assessments, contending that they are contesting the adjustments with the IRS.
DETERMINATION
Virginia Code § 58.1-311 requires any individual to report a change or correction in federal taxable income 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.
The Taxpayers assert that they disagree with the IRS audit adjustments. Where the IRS has audited the federal taxable income of a taxpayer, the Department does not look behind the IRS's final determination. See Public Document (P.D.) 11-107 (6/14/2011). The Department adjusted the Taxpayers' 2009 through 2011 returns based on federal information available from the IRS as permitted by Virginia statute. As such, the assessments issued for the taxable years ended December 31, 2009 through 2011 remain due and payable.
The Taxpayers will receive an updated bill with accrued interest to date. The bill should be paid within 30 days of the bill date to avoid the accrual of additional interest. If the IRS adjusts its audit findings for the 2009 through 2011 taxable years, the Taxpayers will be permitted to file amended returns to correct their liability pursuant to Va. Code § 58.1-311 and Va. Code § 58.1-1823 A(ii).
The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1-5776736561.B