Tax Type
Corporation Income Tax
Description
Report of change in federal taxable income; Amended return
Topic
Returns and Payments
Date Issued
01-24-1997
January 24,1997
Re: § 58.1-1821 Application: Corporate Income Tax
Dear*************
This will respond to your letter of October 29, 1996, in which you protest the denial of an offset and netting of a corporation income tax refund and an assessment for ********, (the"Taxpayer").
FACTS
The Taxpayer's federal corporation income tax returns for the taxable years ending June 30, 1989, and June 30, 1990, were audited by the Internal Revenue Service (IRS). Federal taxable income was increased for the taxable year ending June 30, 1989, resulting in an increase in tax liability. For the taxable year ending June 30, 1990, 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 November 13, 1995, and requested that the tax liability for the June 30, 1989, taxable year be offset by the overpayment for the taxable year June 30, 1990. The refund offset was denied because the amended return requesting the refund was not filed with the limitations period prescribed in Code of Virginia § 58.1-1823.
DETERMINATION
Pursuant to Code of Virginia § 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 90 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 returns. Consequently, a refund may be issued only if the return is filed within 90 days from the date of the final IRS determination.
The information provided by the Taxpayer indicates a final determination date by the IRS of December 14, 1994. The Taxpayer in this case did not file amended returns until November 13, 1995. This is not within the 90 day period for filing allowed under the law. As such, the department does not have the necessary statutory authority to issue a refund.
Although I am sympathetic to your situation, the department must comply with the statutory restrictions with respect to the refund as specified in Code of Virginia § 58.1-1823. Accordingly, your request for the department to reconsider the offset for the taxable year ended June 30, 1990, must be denied. The balance due, ******* should be paid within the next 30 days to avoid the accrual of additional interest. Your payment should be sent to****** Office of Tax Policy, Department of Taxation, Post Office Box 1880, Richmond, Virginia 23218-1880.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/11804P
Rulings of the Tax Commissioner