Tax Type
Corporation Income Tax
Description
Amended return; Refund statute of limitations
Topic
Returns/Payments/Records
Statute of Limitations
Date Issued
09-29-1992
September 29, 1992
Re: §58.1-1821 Application; Corporation Income Tax
Dear****
This will reply to your letter of July 1, 1992, in which you seek a refund of corporation income taxes on behalf of ************************(the "Taxpayer").
FACTS
On July 18, 1988, the Taxpayer filed an amended Virginia corporation income tax return for 1986, claiming a refund based on a decrease in federal taxable income ("the first amended return"). By letter dated October 18, 1988, the department requested the Taxpayer to document federal approval of the adjustment to federal taxable income before the refund could be issued.
Subsequently, the IRS conducted an examination of the Taxpayer's amended 1986 federal corporation income tax return. The Taxpayer's adjustments to federal taxable income were accepted, with some changes. The IRS issued a final determination letter on November 15, 1990. On July 1, 1991, an amended Virginia corporation income tax return claiming a refund was filed ("the second amended return"). This return incorporated the changes made by the IRS examination. The department denied the refund because the amended return was filed after the expiration of the limitations period. You contend that the filing of the first amended return on July 18, 1988 constituted a claim which was timely filed and request that the department issue the refund claimed on the second amended return.
DETERMINATION
The period for filing an amended return claiming a refund expires three years after the last day prescribed by law for the timely filing of the original return or, if later, 60 days after the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based. See Va. Code § 58.1-1823.
The Taxpayer reported the changes in federal taxable income to the department on the first amended return and indicated that a refund would be due for 1986. This notice was sufficient to establish a "claim for refund" under Va. Code §58.1-1823. The Taxpayer supplied notice of a claim for refund prior to the expiration of the limitations period and acted in good faith.
Accordingly, the refund claimed on the second amended return will be issued in due course.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6326F
Rulings of the Tax Commissioner