August 24, 2017
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 assessment issued to ***** (the “Taxpayer”) for the taxable year ended December 31, 2013.
FACTS
The Taxpayer was audited by the Internal Revenue Service (IRS) for the 2013 taxable year, and the IRS notified the Department of adjustments it made to the Taxpayer's federal income tax return. The Taxpayer failed to file an amended Virginia income tax return reflecting the IRS adjustments. As a result, the Department issued an assessment based on the IRS information. The Taxpayer filed an appeal, contending he did not have the amount of income on which the assessment was based.
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 reflecting the federal adjustment, Va. Code § 58.1-312 A 3 permits the Department to assess the appropriate tax at any time.
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 (6/14/2001). The Department adjusted the Taxpayer's 2013 return based on the federal information available from the IRS as permitted by Virginia statute. As such, the 2013 assessment remains due and payable.
The Taxpayer 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 2013 taxable year, the Taxpayer will be permitted to file an amended return to correct his liability pursuant to Va. Code § 58.1311 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/1218.M