April 17, 2019
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 assessments issued to ***** (the “Taxpayer”) for the taxable years ended December 31, 2015.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return and pay Virginia income tax for the taxable year at issue. The Taxpayer indicated that he would file a Virginia return once his federal tax liability was resolved. When the Taxpayer was unable to provide documentation of a resolution, the Department issued assessments based on the IRS information. The Taxpayer filed an appeal, contending he is in the process of working with his accountant to amend his federal return.
DETERMINATION
Virginia Code § 58.1-341 provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return, unless the resident is exempt from filing under Virginia Code § 58.1-321. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia individual income tax return.
When a resident does not file a proper Virginia income tax return, Virginia Code § 58.1-312 A allows the Department to assess underreported tax at any time when a taxpayer fails to file a return or files a false or fraudulent return with the intent to evade tax. Internal Revenue Code (IRC) § 6103(d) authorizes the Department to obtain information from the IRS that will enable the Department to determine a resident’s tax liability. The assessment at issue was made based on the best information available to the Department pursuant to Virginia Code § 58.1-111. The Department will not hold the assessment in abeyance pending the resolution of the Taxpayer’s federal tax liability.
Because the Taxpayer may have information that better represents his Virginia income tax liability for the taxable year at issue, he should file a 2015 Virginia resident income tax return within 30 days from the date of this letter. The return should be submitted to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****. Upon receipt, the return will be reviewed and the assessment will be adjusted, as appropriate. If the return is not received within the allotted time, the assessment will be considered to be correct and collection action may resume.
The Code of Virginia sections and regulation 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