March 4, 2015
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek a credit for the individual income tax overpaid by ***** (the "Taxpayers") for the taxable year ended December 31, 2010.
FACTS
The Taxpayers filed their individual income tax return for the 2010 taxable year in June 2014. The Department denied the refund claimed on the return because the return was filed outside the statute of limitations. The Taxpayers filed an appeal, stating that they are not seeking a refund. Instead, the Taxpayers request that the Department allow them to carry forward an overpayment credit to avoid the underpayment of estimated taxes in subsequent taxable years.
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:
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 Taxpayers have not requested an actual refund but have requested that the overpayment be carried forward to offset their liability for the subsequent taxable year, the laws regarding refunds still apply. As stated above, Va. Code § 58.1499 requires that an application for refund must be received within three years from the last day prescribed by law for the timely filing of the return. See Public Document (P.D.) 06-136 (10/30/2006).
Virginia Code § 58.1-341 A requires that taxpayers file individual income tax returns by May 1 of the year following the tax year for which the return is filed. The statute of limitations for the 2010 taxable year expired on May 2, 2014 (May 1, 2011 was on a Sunday). The Taxpayers' original return for 2010 was filed in June 2014. As such, the 2010 return was not filed within the limitations period provided in Va. Code § 58.1-499, and the overpayment cannot be credited to the 2011 taxable year.
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/1-5803069366.M