Tax Type
Individual Income Tax
Description
Husband and Wife Filing Separately
Topic
Taxable Income
Date Issued
08-19-1998
August 19, 1998
Re: Ruling Request: Individual Income Tax
Dear *****
This will reply to your request for a ruling regarding your amended Virginia individual income return for the 1997 taxable year. I apologize for the delayed response.
FACTS
You and your spouse are Virginia residents. On May 21, 1998, you and your spouse filed a Virginia resident return using filing status married, filing separately on a combined form. On this form, 100% of the allowable Virginia itemized deductions were used to offset your spouse's Virginia adjusted gross income. The department processed this return and issued a joint refund check.
You subsequently filed your federal income tax return with the Internal Revenue Service (IRS) on June 11, 1998, using filing status married filing separately. You submitted an amended Virginia return with the department on the same date, changed your filing status to married filing separately, and claimed 90% of the allowable Virginia itemized deductions. You have returned, uncashed, the previously issued joint refund check and requested the department to separately issue to you a revised refund.
RULING
Code of Virginia Sec. 58.1-324 (A), copy enclosed, provides, "If the federal taxable income of husband or wife is determined on a separate federal return, their Virginia taxable incomes shall be separately determined.' Title 23 of the Virginia Administrative Code (VAC) 10-110-170 (B)(4), copy enclosed, states that nonbusiness deductions (i.e. itemized deductions) may be allocated between spouses as mutually agreed. Title 23 VAC 10-110-170 (B)(7), copy enclosed, further states:
Your action of filing an amended Virginia return, on a separate basis and claiming 90% of the allowable itemized deductions, without a statement of agreement or some other form of documentation signed by your spouse, evidences a lack of mutual agreement between you and your spouse on the allocation of the itemized deductions. Accordingly, the department is required to follow the federal treatment of such items.
Based on information provided, your 1997 individual federal return was processed as filed. To the extent the itemized deductions you claimed were allowed for federal purposes, they will also be allowed for Virginia purposes. Should the IRS disallow any of the itemized deductions claimed on your federal return, however, they will be similarly disallowed on your Virginia return. Code of Virginia Sec. 58.1-311, copy enclosed, requires any taxpayer to report a change or correction in federal taxable income within ninety days of the final determination of the change or correction by filing an amended return with the department. Code of Virginia Sec. 58.1-1812, copy enclosed, mandates the imposition of interest on all deficiencies of tax.
In reviewing the federal adjusted gross income amount reported on your Virginia return *****, it was discovered that this amount did not correspond to the same amount reported on your federal return *****. This error will be corrected, and a revised refund will be computed.
Accordingly, your amended Virginia return will be adjusted to reflect the amounts reported on your separately filed federal return. The resulting refund of ***** will be issued under separate cover. If you have any questions, please contact ***** at ***** or at the Virginia Department of Taxation, Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880.
Sincerely,
Re: Ruling Request: Individual Income Tax
Dear *****
This will reply to your request for a ruling regarding your amended Virginia individual income return for the 1997 taxable year. I apologize for the delayed response.
FACTS
You and your spouse are Virginia residents. On May 21, 1998, you and your spouse filed a Virginia resident return using filing status married, filing separately on a combined form. On this form, 100% of the allowable Virginia itemized deductions were used to offset your spouse's Virginia adjusted gross income. The department processed this return and issued a joint refund check.
You subsequently filed your federal income tax return with the Internal Revenue Service (IRS) on June 11, 1998, using filing status married filing separately. You submitted an amended Virginia return with the department on the same date, changed your filing status to married filing separately, and claimed 90% of the allowable Virginia itemized deductions. You have returned, uncashed, the previously issued joint refund check and requested the department to separately issue to you a revised refund.
RULING
Code of Virginia Sec. 58.1-324 (A), copy enclosed, provides, "If the federal taxable income of husband or wife is determined on a separate federal return, their Virginia taxable incomes shall be separately determined.' Title 23 of the Virginia Administrative Code (VAC) 10-110-170 (B)(4), copy enclosed, states that nonbusiness deductions (i.e. itemized deductions) may be allocated between spouses as mutually agreed. Title 23 VAC 10-110-170 (B)(7), copy enclosed, further states:
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Where a husband and wife fail to agree on the allocation or deductions or exemptions . . . such allocations will correspond to federal treatment of the items involved.
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Your action of filing an amended Virginia return, on a separate basis and claiming 90% of the allowable itemized deductions, without a statement of agreement or some other form of documentation signed by your spouse, evidences a lack of mutual agreement between you and your spouse on the allocation of the itemized deductions. Accordingly, the department is required to follow the federal treatment of such items.
Based on information provided, your 1997 individual federal return was processed as filed. To the extent the itemized deductions you claimed were allowed for federal purposes, they will also be allowed for Virginia purposes. Should the IRS disallow any of the itemized deductions claimed on your federal return, however, they will be similarly disallowed on your Virginia return. Code of Virginia Sec. 58.1-311, copy enclosed, requires any taxpayer to report a change or correction in federal taxable income within ninety days of the final determination of the change or correction by filing an amended return with the department. Code of Virginia Sec. 58.1-1812, copy enclosed, mandates the imposition of interest on all deficiencies of tax.
In reviewing the federal adjusted gross income amount reported on your Virginia return *****, it was discovered that this amount did not correspond to the same amount reported on your federal return *****. This error will be corrected, and a revised refund will be computed.
Accordingly, your amended Virginia return will be adjusted to reflect the amounts reported on your separately filed federal return. The resulting refund of ***** will be issued under separate cover. If you have any questions, please contact ***** at ***** or at the Virginia Department of Taxation, Office of Tax Policy, P.O. Box 1880, Richmond, Virginia 23218-1880.
Sincerely,
Rulings of the Tax Commissioner