September 5, 2025
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the individual income tax assessment issued to you (the “Taxpayer”) for the taxable year ended December 31, 2020.
FACTS
The Internal Revenue Service (IRS) notified the Department that it had adjusted the Taxpayer’s 2020 federal income tax account. The Department had previously received an amended Virginia income tax return purportedly reporting the federal change. That return, however, did not agree with the IRS account information. As a result, the Department issued an assessment for additional tax due. The Taxpayer filed an application for correction, contending that the IRS accepted his amended return.
DETERMINATION
Virginia Code § 58.1-301 provides, with certain exceptions, that the terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. For individual income tax purposes, Virginia conforms to federal law, in that it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). Income properly included in the FAGI of a Virginia resident is subject to taxation by Virginia unless it is specifically exempt as a Virginia modification pursuant to Chapter 3 of Title 58.1 of the Code of Virginia.
Virginia Code § 58.1-311 requires taxpayers 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 a taxpayer fails to file an amended return, Virginia Code § 58.1-312 A 3 permits the Department to assess the appropriate tax at any time.
In addition, IRC § 6103(d) authorizes the Department to obtain information from the IRS that will assist in determining any additional tax liability. In this case, the information obtained by the Department indicated that the Taxpayer’s FAGI was increased due to an IRS examination.
The Taxpayer asserts that he filed an amended return that was accepted by the IRS. Based on an IRS tax account transcript obtained most recently by the Department in July 2025, the IRS has received the Taxpayer’s amended return but has not made any changes to the prior audit. 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 (6/14/2011) and P.D. 24-52 (5/22/2024).
Under these circumstances, the Department finds no basis to abate the assessment. According to the Department’s records, the assessment has been paid in full and no further action is required. If the IRS adjusts its audit findings for the 2020 taxable year, the Taxpayer will be permitted to file an amended Virginia return to correct the liability pursuant to Virginia Code § 58.1-311 and Virginia Code § 58.1-1823.
The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at (804) ***** or *****.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR/4861.Y