Tax Type
Estate Tax
Description
Late filing penalty and interest
Topic
Penalties and Interest
Date Issued
10-30-1992
October 30, 1992
Re: Virginia Code § 58.1-1821 Application: Estate Tax
Dear ************
This will reply to your letter dated February 20, 1992 in which you appeal a five percent late filing penalty plus interest assessed against the********** (the decedent).
FACTS
The decedent's date of death was March 19, 1990, and the federal and Virginia estate returns were due on December 19, 1990. On March 25, 1991, more than four months after the due date for the returns, the executor requested an extension of time to file the federal return, to June 19, 1991. On the same day a copy of the federal request was filed with the Department with a tentative tax payment.
Due to litigation concerning provisions of the decedent's will, the Virginia return was not filed until December 9, 1991. The tax liability was less than the tentative tax payment and a refund was requested. At that time the Department assessed a 5% late tiling penalty because the extension request and tentative tax payment had been made more than four months after the due date. Interest was also assessed for the period between the due date and the tentative tax payment, which you are not contesting.
DETERMINATION
For an extension to be valid, it must be requested before the original due date of the return for which an extension is requested. In the instant case, since the request occurred after the original due date, Va. Code § 58.1-1812 is utilized to determine the appropriate penalty.
Late Filing Penalty: The Virginia Code provides for an extension of time for filing a Virginia estate tax return; however, no extension is allowed for payment of tax. The Virginia estate tax is due nine months after the decedent's death. See Virginia Regulation (VR) 630-7-905.
Since the extension request was filed after the original due date, the late filing penalty is applicable, and is imposed as a percentage of the tax actually due on the late tiled return. Because the entire estate tax liability payment accompanied the extension, the computation of the late filing penalty utilizing this amount is appropriate.
Conclusion: Because of the above reasons, I am upholding the contested amount as originally computed. An updated bill reflecting interest to date will be sent to you shortly. Please pay the bill within thirty days of receipt in order to avoid the imposition of additional interest.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6002G
Rulings of the Tax Commissioner