Tax Type
Corporation Income Tax
Description
Denial of Refunds
Topic
Returns and Payments
Date Issued
04-02-1999
April 2, 1999
Re: § 58.1-1821 Application: Corporate Income Tax
Dear********************
This will respond to your letter in which you protest the denial of refunds of corporation income tax for the taxable years ending December 31, 1992 and 1993 for ***** (the "Taxpayer').
FACTS
The Taxpayer's federal corporation income tax returns for the taxable years December 31, 1990 through 1993 were audited by the Internal Revenue Service (IRS). Federal taxable income was adjusted for these years resulting in increases in federal income tax due, however, due to changes to Virginia modifications included in the IRS changes, the taxable years ending December 31, 1992 and 1993 resulted in refunds for Virginia tax purposes. The federal changes for the taxable year ending December 31, 1991 resulted in an increase in Virginia tax liability. Based on these changes, the Taxpayer filed amended returns for all years involved. The Taxpayer paid the additional Virginia tax due for 1991 and requested refunds for 1992 and 1993. The department denied the Taxpayer's refund requests because these claims were not timely filed. The Taxpayer requests that this determination be reconsidered.
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 the Taxpayer's case, the amended returns claiming refunds were filed more than three years after the due date of the returns. Consequently, a refund may be issued only if they were filed within 90 days from the date of the final IRS determination.
The information provided by the Taxpayer indicates final determination dates by the IRS of August 1, 1997 for the taxable years ending December 31, 1991 and 1992 and as May 30, 1997 for the taxable year ending December 31, 1993. The Taxpayer in this case did not file amended returns until January 26, 1998. This is not within the 90 day period allowed for filing amended returns under the law. As such, the department does not have the necessary statutory authority to issue the refunds.
Although I am sympathetic to your situation, the department must comply with the statutory restrictions with respect to refunds as specified in Code of Virginia § 58.1-1823. Accordingly, your request for the department to reconsider the refunds for the taxable years ending December 31, 1992 and 1993 must be denied.
If you have any questions regarding this determination, please contact *****, of the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/20597P
Rulings of the Tax Commissioner