Tax Type
Corporation Income Tax
Description
Refund statute of limitations
Topic
Payment and Refund
Statute of Limitations
Date Issued
05-01-1992
May 1, 1992
Re: § 58.1-1821 Application: Corporation Income Taxes
Dear ****
This will reply to your letter of April 12, 1991 in which you request a refund of income taxes for the * * * (the "Taxpayer").
FACTS
The taxpayer claims to have filed amended returns on October 15, 1979 for the 1974 and 1975 taxable years, requesting a refund of Virginia income taxes due to a federal net operating loss carryback from 1979. The returns for the above taxable years were subject to several audit issues, among them unresolved litigation (at that time) of General Electric Company (involving Domestic International Sales Corporation (DISC) income) which has since been resolved. The taxpayer made no inquiry regarding this issue until the April 12, 1991 letter received by the department.
DETERMINATION
Because of the long delay in bringing this matter to the attention of the department there are no administrative or judicial remedies available to you. For administrative convenience I have treated this matter as a Va. Code § 58.1-1821 application for correction of an erroneous assessment.
The department has no record of having received the amended returns for 1974 and 1975. Even had the department received the returns, under Va. Code § 58-1118.1, as then in effect, the failure of the department to act within three months on an amended return claiming a refund is deemed an assessment for the purposes of pursuing administrative remedies under then Va. Code § 58-1118 (recodified as Va. Code § 58.1-1821) or judicial remedies under Va. Code § 58-1130 (recodified to Va. Code § 58.1-1825).
Furthermore, the taxpayer filed suit against the Department in 1980, based upon the same issues then pending in the General Electric Company litigation. In its January 1981 response, the Department at that time stated that there was no knowledge of ever having received any amended returns for the 1974 and 1975 taxable years.
If the department failed to issue a refund check then the department's failure to act would have been deemed an assessment of additional tax in the amount of the claimed return on January 15, 1980. Under then Va. Code § 58-1118, the taxpayer's right to administrative relief expired 90 days after the deemed assessment. However, the department has a long established policy of granting administrative relief as long as the taxpayer is entitled to seek judicial relief. Under Va. Code § 58-1130, as then in effect, the taxpayer's right to seek judicial relief expired on January 15, 1983.
Since your first contact with the department regarding the refund claims was in 1991, eight years after the expiration of your right to seek judicial relief, and eleven years after being told by the Department that there was no record of your claim, I deny your claim to a refund for the 1974 and 1975 taxable year returns.
Sincerely,
W. H. Forst, Tax Commissioner
Rulings of the Tax Commissioner