March 3, 2015
Re: § 58.1-1821 Application: Withholding Tax
Dear *****:
This will reply to your letter in which you seek correction of withholding tax assessments issued to ***** for the taxable periods January 2009 through December 2011. I apologize for the delay in responding to your appeal.
FACTS
The Department issued assessments to the Taxpayer for failure to report employee withholding for the taxable periods January 2009 through December 2011. The assessments were based on information available to the Department. The Taxpayer appeals the assessments, contending the amounts assessed are erroneous.
DETERMINATION
Estimated Assessments
Virginia Code § 58.1-478 C requires every employer to file an annual report of Virginia income tax withheld, no later than February 28 of the calendar year succeeding the calendar year in which wages were withheld from employees. The return must include a copy of the Form W-2 furnished to each employee. When an employer fails to file such a report, Va. Code § 58.1-111 grants the Department authority to estimate the amount of taxes due based on information available to the Department.
2009
The Department issued two assessments for the 2009 taxable year. The Department issued an estimated assessment to the Taxpayer for failure to file an annual report. Department records show that the Taxpayer subsequently filed an annual return for 2009 in November 2012 and another assessment was issued. As such, the 2009 estimated assessment will be abated.
2010 and 2011
The Taxpayer submitted reports for employee withholding for all quarters during the 2010 and 2011 taxable periods. The Taxpayer, however, failed to file the annual reconciliation returns. The Taxpayer provided copies of W-2 forms and payroll distribution reports for both taxable years with the appeal.
Under Va. Code § 58.1-1822, if an assessment is appealed by a taxpayer, and the Department is satisfied by the evidence submitted, the Department may order that such assessment be adjusted. A review of the information provided indicates the 2010 and 2011 assessments exceed the proper amount due. As such, these assessments will be returned to the auditor and adjusted based on the payroll information provided by the Taxpayer.
The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department's website. 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/1-5333533327.D