Tax Type
Individual Income Tax
Description
Statute of limitations for refund
Topic
Credits
Payment and Refund
Statute of Limitations
Date Issued
08-18-1993
August 18, 1993
Re: §58.1-1821 Application: Individual Income Tax
Dear****************
This will reply to the letter of January 11, 1993 from **************of your office which contests the disallowance of overpayment tax credits claimed on the 1985 through 1987 individual income tax returns of your clients, ***********(the "Taxpayers").
FACTS
The Taxpayers filed Virginia 1985 through 1987 income tax returns on December 31, 1991, within 60 days from filing the original federal income tax returns. The Virginia returns indicated that overpayments be credited to the following year's estimated tax accounts. The overpayments were disallowed by the department as the returns were filed outside of the statute of limitations. Therefore, assessments for tax, addition to tax, and interest were issued for 1985, 1987, 1988, and 1989, which have been paid. The Taxpayers contend that the overpayment credits should be allowed in that the returns were filed within 60 days of filing of federal return as provided in Va. Code §58.1-499. In addition, they request that the amounts paid for the assessment be refunded.
DETERMINATION
Pursuant to Va. Code §58.1-499, no overpayment of tax will be refunded unless the individual income tax return requesting such overpayment is filed "within three years from the last day prescribed by law for the timely filing of the return, or within sixty days from the final determination of any change or correction in the liability of the taxpayer of any federal tax upon which the state tax is based, whichever is later."
The Virginia returns for 1985 through 1987 were filed within 60 days of the late filed original federal returns. However, they were not filed based on a change or correction to original federal returns as required by the above statute. As such, the normal three-year statute governs the filing of the returns.
Based upon the foregoing, your Virginia 1985 through 1988 income tax returns were not filed within the statute of limitation periods for obtaining a refund (or consequently, the optional credit against the ensuing year's estimated income tax). Therefore, no cumulative credits or overpayments for these years will apply to your 1986 through 1989 estimated tax, and any corresponding assessments were properly issued and paid.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6641N
Rulings of the Tax Commissioner