Tax Type
Individual Income Tax
Description
Filing an amended return; Statute of limitations
Topic
Returns and Payments
Date Issued
03-13-1997
March 13, 1997
Re: § 58.1-1821 Application: Individual Income Tax
Dear***************************
This will respond to your letter of February 4, 1997, in which you requested that the department reconsider its ruling of January 29, 1997, concerning an out-of-state tax credit taken on your 1995 Virginia return. Since the credit in question applied to the 1991 tax year, any refund available by the application of the out-of-state tax credit would have to be refunded from that year.
In my letter of January 29, 1997, I explained that Code of Virginia § 58.1-1823 prescribed the time period for filing amended returns. Since the three year time period allowed under this section could not be met in this case, the statute of limitations expired and no refund could be issued.
You ask for relief citing equitable treatment and believe that this can be afforded under Code of Virginia § 58.1-1821 through some sort of mitigation or common law principal of equitable recoupment. The Internal Revenue Code provides for relief from some inequities caused by the statute of limitations and other provisions that would otherwise prevent adjustment of various items of or deductions from income. Adjustments are permitted even though the limitations period for assessment or refund for the year at issue may have otherwise expired. While Virginia has adopted conformity to the Internal Revenue Code, such conformity is only with respect to terms used within the Code of Virginia. Virginia statutes do not contain the equivalent of the federal mitigation provisions.
Consequently, the department must rely on the clear language of Code of Virginia § 58.1-1823. Based on this statute, the department does not have the authority to issue a refund when the period of limitations provided therein has expired. Accordingly, your request for reconsideration must be denied.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12219P
Rulings of the Tax Commissioner