Tax Type
Declaration of Estimated Income Tax by Individuals
Individual Income Tax
Description
Penalty for underpayment of estimated tax; Late filing penalty
Topic
Penalties and Interest
Date Issued
07-25-1984
July 25, 1984
Re: §58-1118 Application: Individual Income Tax
Dear ******************
This will reply to your letter of May 14, 1984 in which you seek relief of penalties and interest assessed against you.
Facts
You filed your 1982 Virginia individual income return on December 31, 1983. There is no record that the extension form, Form 760-E, attached to your 1982 return, was timely filed with-the Department. In addition, the tentative tax of $***** recited on Form 760-E was not paid and the 1982 return was filed after the extension period provided in § 58-151.067 of the Code of Virginia.
Late filing penalty and penalty for underpayment of estimated tax was assessed, along with applicable interest. You protest the correctness of such assessment and seek a detailed explanation.
Determination
§ 58-151.073 of the Code of Virginia imposes on returns not timely filed a penalty of 10% of the tax assessable. Such penalty, when assessed, becomes a part of the tax. Virginia Code § 58-151.077 imposes a penalty of five percent on any unpaid balance of tax for late payment of individual income tax. In your case, the 10% late filing penalty was $**** which, when added to your 1982 balance, increases your 1982 tax due to $*****. The five percent late payment penalty imposed on such amount is $****. Accordingly, your penalties total $****, the amount listed on your ***** assessment as "individual penalty."
Because at least 70% of your 1982 tax liability was not timely paid by withholding tax or estimated tax payments, an addition to tax was assessed as required by Virginia Code § 58-151.23(a). This is the "underpayment penalty" referred to on your assessment.
Finally pursuant to Virginia Code § 58-1160, interest was assessed and continues to accrue on the outstanding balance.
Based on the foregoing, I find no basis for relief and the amount assessed is due and payable.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner