November 7, 2025
Re: § 58.1-1821 Appeal: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the individual income tax assessments issued to you (the “Taxpayer”) for the taxable years ended December 31, 2010, and 2011.
FACTS
The Department issued assessments to the Taxpayer in March 2014 and March 2015 after she failed to file Virginia individual income tax returns for the 2010 and 2011 taxable years, respectively. The Department has initiated a number of collection actions over time, but balances remain due, and the Department continues to take collection actions. The Taxpayer filed an application for correction of the assessments in May 2024, contesting the validity of the assessments.
DETERMINATION
Deadline For Filing Appeals
Virginia Code § 58.1-1821 states that “[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner.” Title 23 of the Virginia Administrative Code (VAC) 10-20-165 B 1 provides that “[t]he Department strictly enforces the 90-day limitations period for filing a timely administrative appeal. A taxpayer must file a complete appeal within 90 calendar days after the date of assessment.”
In this instance, the assessments for the 2010 and 2011 taxable years were issued in March 2014 and March 2015, respectively. The Taxpayer filed this application in May 2024, well after the 90-day limitations period. Further, the time to file a protective claim for refund under Virginia Code § 58.1-1824 expired three years after the assessments were issued. In addition, a protective claim is only available as a remedy if the assessment has been paid in full. See Title 23 VAC 10-20-190 A 1.
The Taxpayer asserts that the issuance of a consolidated bill notice postmarked in April 2024 started the 90-day period for filing an application for correction under Virginia Code § 58.1-1821. “Date of assessment” is defined, in part, as the date stated on the “notice of assessment.” See Title 23 VAC 10-20-165 A.
Title 23 VAC 10-20-165 A further defines “notice of assessment” as:
The department’s official form labeled “Notice of Assessment” that contains written information that sets out the date of the assessment, amount of assessment, the tax type, taxable period, account number, bill number and name of the taxpayer. A subsequent statement of balance due the department does not constitute a new notice of assessment. Such subsequent statements include reports of payments applied to assessments, updated bills reflecting additional accrued interest, or other changes to an assessment. [Emphasis added.]
Under this regulation, the consolidated bill notice postmarked April 2024 does not constitute a notice of assessment that would extend the Taxpayer’s time for filing an application for correction of the original assessments. Accordingly, the Taxpayer’s application is time-barred.
Taxation of Virginia Residents
The statute of limitation issues notwithstanding, the Department will explain the bases for the assessments for informational purposes. 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. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia. For individual income tax purposes, Virginia conforms to federal law, in that it starts the computation of Virginia taxable income (VTI) 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.
Further, 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. When a resident does not file a proper Virginia return, IRC § 6103(d) authorizes the Department to obtain information from the IRS that will help in determining the resident's tax liability. See Public Document (P.D.) 14-33 (3/7/2014) and P.D. 24-86 (9/13/2024).
In this case, it appears that the Taxpayer was a resident of Virginia for each of the taxable years at issue. As such, she would have been subject to Virginia income tax and required to file Virginia resident income tax returns if she had sufficient income to exceed the filing threshold.
Based on the information the Department received from the IRS, the Taxpayer had income reported on Form W-2 each year and Form 1099-INT for 2010. The total amount of income exceeded the filing threshold each year, and the assessments were based on such amounts.
CONCLUSION
The Taxpayer failed to timely file an application for correction of the assessments or make a valid protective claim for refund for either of the taxable years at issue. Even if she had, the Department’s assessments were based on information obtained from the IRS as permitted under Virginia law, and the Taxpayer has not provided any objective evidence that the information was incorrect.
Therefore, the assessments issued for taxable years ended December 31, 2010, and 2011, remain due and payable. The Taxpayer will receive updated bills that will include accrued interest to date. The Taxpayer should remit the balance due within 30 days of the bill dates to avoid the accrual of additional interest and possible collection actions.
The Code of Virginia sections and regulations cited are available online at law.lis.virginia.gov. The public documents cited are available at www.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 *****.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR/4957.Y