March 6, 2020
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek reconsideration of the Department's determination letter, issued to ***** (the "Taxpayers") as Public Document (P.D.) 19-99 (8/27/2019).
FACTS
In P.D. 19-99, the Department upheld the disallowance of itemized deductions for unreimbursed employee expenses for mileage, work clothing, laundry, cell phone and Internet claimed by the Taxpayers on their Virginia resident returns for the taxable years ended December 31, 2015 through 2017. The Taxpayers have asked the Department to reconsider its determination, asserting that documentation provided with their request substantiates itemized deductions for the claimed unreimbursed employee expenses.
DETERMINATION
Request for Reconsideration
Under Title 23 of the Virginia Administrative Code (VAC) 10-20-165 F, the Department will consider a request for reconsideration if the taxpayer has discovered additional evidence that was not available at the time of the original administrative appeal, and the additional documentation could produce a result different from the original determination. The Taxpayers provided additional documentation which they contend will bring about a different result.
Mileage Expense
In P.D. 19-99, the Department set forth the requirements for claiming the standard mileage rate. While the Taxpayers provided maps showing general locations with explanation, they have not provided exact addresses such that the Department can confirm the mileage being claimed, only general explanations regarding locations and distances. Furthermore, the Taxpayers state that they were both employed at multiple jobs during this time period. The Department’s records indicate each Taxpayer maintained one job through all out all three taxable years in question.
Work Clothing and Laundry Expense
The Taxpayers have provided a list of clothing items purchased that includes shirts, shoes, socks, and professional outerwear, but they have, again, failed to provide receipts supporting the claimed purchases. Again, the Department explained the requirements for deducting clothing items and care in P.D. 19-99. In addition, while the Taxpayers claimed the clothing included company logos, the employment contract provided does not include any uniform requirements.
Cell Phone Expense
The Department has addressed the business use of mobile phones on several occasions. See P.D. 16-53 (4/11/2016) and P.D. 19-99. A log showing payments for cell phone and internet were provided. However, no identifiable distinction has been made between the business and personal nature of the usage. Mobile phone and internet expenses would be deductible only for business related calls and usage.
CONCLUSION
Under the provisions of Virginia Code § 58.1-205, in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayer to show that the assessments were erroneous.
Because the evidence provided to support the business deductions lacks the necessary details, the assessments for the 2015 through 2017 taxable years are upheld.
The Department’s determination in P.D. 19-99 is upheld. This letter is the Department’s final determination in this matter. The Department will issue updated bills with accrued interest for the 2015 though 2017 taxable years. The outstanding balance must be paid within 30 days of the bill date to avoid the accrual of additional interest. If payment is not received within the allotted time, additional interest will be assessed and collection action may resume.
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/1588.A