Tax Type
Individual Income Tax
Description
Changes to federal adjusted gross income
Topic
Taxable Income
Date Issued
09-29-1995
September 29, 1995
Re: § 58.1-1821 Application: Individual Income Tax
Dear*****************
This will reply to your letter of August 14, 1995, seeking correction of assessments resulting from adjustments to your 1987, 1988, and 1992 Virginia individual income tax returns.
FACTS
The assessments made on your 1987 and 1988 returns were the result of changes to federal adjusted gross income made by the Internal Revenue Service (IRS) in an audit. For 1992, the assessment was issued because your federal adjusted gross income reported to Virginia was different than that reported to the IRS. You protest the assessments and state that they are not proper, and therefore no tax is owed the Commonwealth.
DETERMINATION
The additional assessments for the years 1987 and 1988 were the result of audit information supplied to the department by the IRS. The 1992 assessment resulted from the comparison of federal tax information reported to the IRS to that reported on the Virginia individual income tax return. This information was provided to the department under the State/Federal Information Exchange Agreement.
Virginia income tax statutes generally conform with the federal Internal Revenue Code. Accordingly, Virginia law provides that the starting point for state income tax is federal adjusted gross income with certain modifications as specified in Code of Virginia § 58.1-322.
Code of Virginia § 58.1-311 requires that if federal adjusted gross income is changed, taxpayers are required to report such changes to the department within 90 days. Therefore, if changes in a taxpayer's federal adjusted gross income are reported by the IRS to the department, and such changes have not already been reported to the department, the Virginia taxable income is adjusted accordingly. This was the case with your income tax returns for 1987 and 1988. Similarly, when federal adjusted gross income reported to the IRS is different from that reported for Virginia tax purposes, a corresponding adjustment will be made by the department.
The attached schedule illustrates the balance of tax and interest due for 1987, 1988, and 1992. The balance due, ********* should be paid within the next 30 days to avoid the accrual of additional interest. Your payment should be sent to**************c/o Office of Tax Policy, Department of Taxation, P.O. Box 1880, Richmond, Virginia 23282-1880.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10124P
Rulings of the Tax Commissioner