May 2, 2018
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek a refund of the overpayment of individual income tax paid by ***** (the “Taxpayer”) for the taxable years ended December 31, 2011, and December 31, 2012. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer filed a Virginia Special Nonresident Claim for Individual Income Tax Withheld (Form 763-S) for the 2011 and 2012 taxable years in March 2017, requesting refunds of income tax erroneously withheld by her employer. The Department denied the refunds because the statute of limitations had expired. The Taxpayer appeals the Department's denial, contending the statute of limitations on refunds did not apply because she did not commit the error.
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 Department shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part that:
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.]
Whenever a taxpayer determines that Virginia income taxes were erroneously withheld for any taxable year in which the taxpayer has not filed an income tax return, the taxpayer should file a Virginia Special Nonresident Claim for Individual Income Tax Withheld (Form 763-S). This request constitutes a refund within the purview of Virginia Code § 58.1-499 D, and the Department will only issue refunds when such forms are filed within the applicable statute of limitations. See P.D. 14-46 (4/2/2014). Regardless of who was responsible for the error, if Virginia income tax was improperly withheld, it would be considered excessive Virginia income tax withholding for purposes of Virginia Code § 58.1-499 A. In addition, when a taxpayer claims a refund of such withholding, Form 763-S is treated as the written application of the taxpayer for purposes of Virginia Code § 58.1-499 D.
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 request is filed. Based on Virginia statutes, the due dates for 2011 and 2012 individual tax returns were May 1, 2012, and May 1, 2013, respectively. As such, the refund requests were required to be filed by May 1, 2015, and May 2, 2016, respectively (May 1, 2016 was a Sunday).
The Taxpayer filed the 763-S forms for the 2011 and 2012 taxable years in March 2017, after the statute of limitations had expired for each taxable year. The provisions of Virginia Code § 58.1-499 D are clear and do not provide the Department with any discretion in enforcing the three-year limitations period to apply for a refund. Accordingly, I cannot grant your request for a refund of the overpayment of individual income tax for the 2011 and 2012 the taxable years.
The Code of Virginia sections and public documents 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/1368.A