May 25, 2026
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, 2021.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2021 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer in order to determine if his income was taxable in Virginia. When no response was received, the Department issued an assessment. The Taxpayer submitted an application for correction, contending that he was not required to file a Virginia income tax return.
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 assessment for the 2021 taxable year was issued on December 30, 2024. The Taxpayer filed this application on April 19, 2025, after the 90-day limitations period. Further, although the time to file a protective claim for refund under Virginia Code § 58.1-1824 does not expire until three years after the assessment was issued, 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 appears to believe that the issuance of a consolidated bill notice on March 28, 2025, 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 dated March 28, 2025, does not constitute a notice of assessment that would extend the Taxpayer’s time for filing an application for correction of the original assessment. Accordingly, the Taxpayer’s application is time-barred.
Taxation of Virginia Residents
The statute of limitations issue notwithstanding, the Department will explain the basis for the assessment 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 the taxable year at issue. As such, he would have been subject to Virginia income tax and required to file a Virginia resident income tax return if he had sufficient income to exceed the filing threshold.
Based on the information the Department received from the IRS, the Taxpayer had income reported on Forms W-2, 1099-B, and 1099-MISC. The total amount of income exceeded the filing threshold, and the assessment was based on such amounts. By letter dated May 15, 2025, the Department provided the Taxpayer with a detailed list of the reported income. As a courtesy, a copy of that letter is enclosed.
CONCLUSION
The Taxpayer failed to timely file an application for correction of the assessment or make a valid protective claim for refund for the 2021 taxable year. Even if he had, the Department’s assessment was 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 assessment for the 2021 taxable year is upheld. The Taxpayer will receive an updated bill that will include accrued interest to date. The Taxpayer should remit the balance due within 30 days of the bill date 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 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 ***** or *****.
Sincerely,
Kristin L. Collins
Tax Commissioner
Commonwealth of Virginia
AR/5186.Y