Tax Type
General Provisions
Description
FEDERAL RETIREES: NO NEED YET TO FILE AMENDED
TAX RETURNS FOR 1985-1988
TAX RETURNS FOR 1985-1988
Topic
Basis of Tax
Constitutional Provisions
Persons Subject to Tax
Taxpayers
Date Issued
05-23-1994
Virginia Department of Taxation
94-6
FEDERAL RETIREES: NO NEED YET TO FILE AMENDED
TAX RETURNS FOR 1985-1988
TAX RETURNS FOR 1985-1988
On May 20,1994, Governor Allen signed emergency legislation (H.B. 4006) to clarify that federal retirees need NOT file amended income tax returns at this time to preserve their claim for refunds for taxable years 1985- 1988.
This action came in response to numerous articles being published which instruct federal retirees who are affected by the pending Virginia income tax litigation on the taxation of federal pensions to file amended returns for taxable years 1985-1988 with the Virginia Department of Taxation by June 18.
On June 18,1993, in the case of Harper v. Virginia Department of Taxation, 112 S. Ct. 2519, the United States Supreme Court held that its decision in Davis v. Michigan Dep't of Treas., 489 U.S. 803 (1989), which determined that the unequal tax treatment of federal and state government retirees was unconstitutional, is to be retroactively applied. The court declined to order refunds for the retirees, however, and remanded the case to the Virginia courts to determine whether Virginia law provided adequate opportunities for taxpayers to challenge tax assessments prior to the actual payment of the tax.
Virginia Code §58.1 - 1823 (B) allows amended returns to be filed, if necessary, one year after a final court decision in the ongoing litigation. The emergency legislation passed on May 11 declared that the decision of the United States Supreme Court in Harper, shall not be deemed a "final" decision for purposes of calculating the one-year statute of limitations.
Until the courts have resolved this issue or until a settlement program such as the one proposed by the Attorney General has been enacted, retirees do not need to file anything with the Department of Taxation to protect their rights to a refund or settlement. Once this issue is resolved by the courts or otherwise, the Department of Taxation will advise tax practitioners and members of the federal retirement community as soon as possible of the appropriate actions that must be taken.
Rulings of the Tax Commissioner