Tax Type
Corporation Income Tax
Description
Denial of Refund; Statute of limitations
Topic
Collection of Tax
Date Issued
10-29-1992
October 29, 1992
Re: §58.1-1821 Application; Corporation Income Tax
Dear****************
This will reply to your letter of August 3, 1992 in which you protest the denial of a refund of corporation income tax for *************(the "Taxpayer"). We have treated your letter as an application for correction of an erroneous assessment under Va. Code §§58.1-1821 and 58.1-1823.
FACTS
The Taxpayer was audited by the Internal Revenue Service (IRS), resulting in refunds for 1982 and 1983. The Taxpayer filed amended Virginia corporation income tax returns claiming refunds for those years, based on the IRS adjustments to federal taxable income. The amended Virginia returns were filed within 90 days of the date of the refund check issued by the IRS.
The department disallowed the Taxpayer's refund claims for 1982 and 1983 because the amended returns were filed more than 60 days after the date of the final determination of federal tax liability. You maintain that the federal extended due date for adjustments (12/31/91) should be used as the final determination date because the IRS did not issue any documentation concerning the final determination of federal tax liability other than the refund check. In addition, you assert that the Taxpayer was advised that it had 90 days from the final determination to file an amended Virginia return claiming a refund, and the returns were timely filed under this limitations period.
DETERMINATION
Under Va. Code §58.1-1823 (as in effect when the amended returns were filed), an amended return claiming a refund must be filed within three years of the due date of the return or, if later, within 60 days from the final determination of a change in the taxpayer's federal taxable income. In this case, the amended returns claiming refunds were filed more than three years after the due date of the returns. Therefore, they are timely filed only if filed within 60 days from the date of final determination of federal tax liability.
Virginia Regulation (VR) 630-3-1823(B) provides that for purposes of Va. Code §58.1-1823, the payment or refund of any federal income tax is a final determination for Virginia purposes, even though a refund suit may be pending or contemplated which could result in another "final determination." You have indicated that you are unable to provide the department with a copy of the refund check or documentation showing the date of the refund. Without such documentation, the department cannot accept your position that the returns were timely filed. Furthermore, in your letter you make no argument that the amended returns were filed within 60 days of the date of the IRS refunds, but only that they were filed within 90 days of the date the refunds were received. Based on this position, the department must find that the amended returns claiming refunds were not timely filed.
You contend that the Taxpayer was advised that the time frame for filing amended returns claiming a refund was 90 days after the date of the final determination of federal tax liability, that you confirmed this through your research, and you relied on this information when filing the amended returns.
The copy of the section you cite and upon which you say you relied is incomplete. The full section states that an amended return must be filed within 90 days of the filing of the complementary federal amended return, except that any amended return claiming a refund for overpayment of tax must be filed within 60 days of the final determination of any changes in federal tax liability.
You argue that an amendment to the law, which changed the due date on amended returns claiming refunds from 60 days to 90 days from the date of final determination, requires the department to consider the amended returns timely filed because they were filed within 90 days of the date the IRS refund checks were received. However, Chapter 678 of the 1992 Acts of Assembly states that the new 90 day period is "effective for all reports or amended returns filed on and after July 1, 1992."
In addition, as mentioned earlier, the Taxpayer has provided no documentation to substantiate the date of the final determination of federal tax liability.
Based on the foregoing, your refund request is denied.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6390f
Rulings of the Tax Commissioner