Tax Type
Individual Income Tax
Description
Deficiency assessment; Incorrect address
Topic
Collection of Delinquent Tax
Returns and Payments
Date Issued
08-29-1984
August 29, 1984
Re: §58-1118 Application: Individual Income Tax
Dear *********************
This is in response to your letter of March 29, 1984, petitioning for relief from individual income tax and interest for ***** for taxable year 1968.
FACTS
The taxpayer, a Virginia resident, filed a resident Virginia individual income tax return for taxable year 1968. The return was timely filed reflecting a tax due of $**** which was paid at the time that the return was filed. Subsequently the return was examined and adjusted by the Department of Taxation to disallow the credit claimed for income taxes paid the State of Maryland. Since Maryland is a state with which Virginia practices reciprocity, Virginia residents are not allowed a credit on their Virginia resident return for income taxes paid to Maryland. In this case Maryland would allow the credit on its nonresident return.
On December 17, 1969, a letter explaining the adjustment and a Notice of Assessment were mailed by the department. They went to the correct state, city and street, but to the incorrect house number. There was no reply to the letter nor was there any payment of the assessment. Another notice was sent on March 6, 1974; however, this too went to an incorrect address. Absent any payment of this 1968 assessment, the taxpayer's 1981 and 1982 individual income tax refunds were seized by the department and applied to the outstanding assessment.
The taxpayer contends that since the Notice of Assessment was never sent to the correct address, the assessment was invalid, and he petitions for a refund of the 1981 and 1982 overpayments that were applied to the 1968 assessment.
DETERMINATION
In reaching a determination in this matter, the statutes that were in effect at the time that the assessment was generated must be examined. Virginia Code §58-113 (1968 Supp.) (Repealed by 1971 Acts of Assembly, Chapter 171) states:
If the amount of tax computed by the Department shall be greater than the amount theretofore assessed, the excess shall be assessed by the Department aforesaid and a bill for the same shall be mailed to the taxpayer .... (Emphasis added.)
Even though two attempts were made to mail the assessment to the taxpayer, each attempt was flawed. Because the two attempts were flawed, the department failed to fulfill the requirement of mailing the assessment "... to the taxpayer." Any attempt to reassess the tax now would be prohibited by statute. Therefore, the department will grant this petition for relief. The amount of the 1981 and 1982 overpayments that were applied to the 1968 assessment will be refunded to the taxpayer.
Sincerely,
W. H. Forst State
Tax Commissioner
Rulings of the Tax Commissioner