April 16, 2018
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you request that the Department reconsider its denial of a Virginia individual income tax refund for ***** (the “Taxpayers") for the taxable year ended December 31, 2010. I apologize for the delay in responding to your request.
FACTS
The Taxpayers filed their 2010 Virginia income tax return and requested a refund for the overpayment. The Department denied the refund because the return was filed beyond the period allowed by the statute of limitations. The Taxpayers filed an appeal, requesting an exception to the limitations period because of severe illness and complexities incurred with their tax preparer.
DETERMINATION
Return Filing Requirement
Virginia Code § 58.1-499 D specifies that the Department cannot issue a refund, “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 or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon with the tax is based.”
Virginia Code § 58.1-341 A requires that a taxpayer file an individual income tax return by May 1 of the year following the tax year for which the return is filed. Virginia Code § 58.1-341 F provides that an individual who is unable to make a return because of a disability has the responsibility of having such return filed by a fiduciary or duly authorized agent. Thus, Virginia law addresses the requirements of filing returns for taxpayers who have disabilities. While a severe illness or medical condition may be considered a disability for purposes of Virginia Code § 58.1-341 F, the statute does not provide for the suspension of the statute of limitations for an individual who is mentally or physically disabled. See Public Document (P.D.) 10-204 (9/2/2010).
The Taxpayers’ individual income tax return for the 2010 taxable year claiming a refund was required to be filed by May 2, 2011 (May 1 was on a Sunday). Therefore, the three-year statute of limitations period for filing a return claiming a refund in Virginia Code § 58.1-499 D expired May 2, 2014. The Taxpayers did not file their 2010 return until November 2014, well after the expiration of the statute of limitations.
Professional Tax Preparation
The Taxpayers contend that they incurred additional delays in filing their federal and state returns because of issues with their tax preparer, and they needed to hire a second accountant.
A taxpayer's reliance on an accountant to prepare income tax returns, while understandable, does not relieve the taxpayer of the responsibility for ensuring that the return is filed. See Public Document (P.D.) 11-82 (05/31/2011) and P.D. 12-93 (6/8/2012). Further, in a situation where a taxpayer relies on an accountant, lawyer, tax preparer or other tax professional and such professional provides inaccurate or erroneous advice that results in a liability, the taxpayer may have recourse against the tax professional.
CONCLUSION
The Department is bound by the clear requirements under the law. The Department is not empowered to waive the statute of limitations. Accordingly, the Taxpayers' refund request cannot be granted.
The Code of Virginia sections and public documents 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/1146.o