Tax Type
Corporation Income Tax
Description
Refund statute of limitations
Topic
Payment and Refund
Statute of Limitations
Date Issued
05-29-1992
May 29, 1992
Re: § 58.1-1821; Corporation Income Tax
Dear ****
This will reply to your letter of August 5, 1991, 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's federal corporation income tax returns for the taxable years ended September 30, 1983 and 1984 were audited by the IRS. Federal taxable income was increased for the 1984 return, resulting in an increase in tax liability. For the 1983 return, federal taxable income was decreased, resulting in an overpayment. Based on these changes, the taxpayer filed amended Virginia corporation income tax returns with the department on January 2, 1991, and requested that the tax liability for the taxable year ended September 30, 1984 be offset by the overpayment for the taxable year ended September 30, 1983. The refund offset was denied because the amended return for refund was not filed within the limitations period prescribed in Va. Code § 58.1-1823. You subsequently paid the tax liability for the taxable year ended September 30, 1984 and now request that the department reconsider your refund request.
DETERMINATION
Under Va. Code § 58.1-1823, 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 return claiming a refund was filed more than three years after the due date of the return. Therefore, it is timely filed only if filed within 60 days from the date of final determination of federal tax liability.
The information provided indicates that a final report was issued by the IRS on September 23, 1988. You indicate that a supplemental report dated February 2, 1989 was provided by the IRS, but you do not elaborate on the content of the report or state if the report resulted in a substantive change in the IRS' position. Even assuming that the supplemental report was the IRS' final determination, it is clear that the amended return for refund, filed January 2, 1991, was filed well beyond the 60 day statutory period for the filing of an amended return for refund. Because the amended return was not filed within the prescribed statutory period, there was no overpayment to either be refunded or to be used to offset the tax liability for the taxable year ended September 30, 1984.
You state that the federal adjustments required you to allocate items among approximately 200 subsidiaries of the taxpayer, and that research was required for each year, for each company, and for each state that the subsidiary conducted business. You contend that the late filing of the amended return for refund was not due to lack of consideration of the importance of the limitations period, but due to the complexity and time involved in correctly reporting changes to the states; therefore, the refund should be allowed. However, I am bound by the clear statutory language of Va. Code § 58.1-1823.
Accordingly, your request for refund is denied.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner