Tax Type
Individual Income Tax
Description
Unreported taxable income, jeopardy assessments
Topic
Appropriateness of Audit Methodology
Collection of Delinquent Tax
Constitutional Provisions
Date Issued
03-30-1982
March 30, 1982
Re: 58-1118 Application
Jeopardy Assessment: Individual Income Tax
Dear ***********************
This letter is in response to your correspondence of January 4, 1982, an application for correction of jeopardy assessments against your clients for State individual income taxes for the taxable years 1975 through 1981.
FACTS
Based on public information and information furnished the Department by officials in the office of the Commonwealth's Attorney, County of the Department of Taxation determined that your clients had $ *********of unreported taxable income for the taxable years 1975 through 1981. These officials informed the Department, and later provided copies, of twelve indictments against ********* for embezzlement of the above referenced sum during the taxable years in question. The Department also learned that ***** pleaded guilty and was convicted as charged in these indictments on
As a result of this information and other available information, the Department was reasonably of the opinion that collection of its assessment would be "jeopardized by delay" as that terminology is defined by § 58-151.0105 of the Code of Virginia. Accordingly, on October 9, 1981, the Department issued jeopardy assessments against *****and **********for additional income not reported on their joint income tax returns as filed for the years 1975 through 1979. For 1980 and 1981, the jeopardy assessments were issued against ********* only since ********** filed a separate return for 1980 and, absent a jeopardy assessment, no returns were yet due to be filed for 1981.
Moreover, the factual basis for the dollar amounts of these-assessments has been established by the indictments specifying dollar amounts "wrongfully and fraudulently used, disposed of, concealed or embezzled" over specific periods of time, a conviction based on a plea of guilty to these indictments and individual income tax returns either not filed or filed without this additional income.
DETERMINATION
If the taxpayers wish to bring forward facts which will rebut any of the foregoing or otherwise reduce these assessments, I will consider them. As of the date of this letter, the Department of Taxation holds a lien on the property of *************** but has not ordered the execution upon and sale of such property. The lien may be released if within thirty days of the date of this letter a cash bond or other bond acceptable to me in an amount equal to the assessment is furnished to guarantee payment.
Subject to the taxpayer furnishing the Department facts to rebut the assessments in question within thirty days of the date of this letter, I find no basis for granting your clients relief and their application for correction of these jeopardy assessments is hereby denied.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner