Tax Type
Individual Income Tax
Description
Refund of Tax
Topic
Returns and Payments
Date Issued
04-20-1999
April 20, 1999
Re: § 58.1-1821 Application: Individual Income Taxation
Dear***
This will reply to your letter in which you request a refund on behalf of your clients, *************** (the "Taxpayer'), for the 1992 taxable year. I apologize for the delay in responding.
FACTS
On May 7, 1998, the Taxpayer filed an amended return with the department requesting a refund for the 1992 taxable year. The request is based on an Internal Revenue Service (IRS) final determination dated June 7, 1997 which resulted in a decrease in the Taxpayer's federal adjusted gross income.
You have asserted that the amended return was inadvertently filed beyond the statute of limitations. You are asking the department to waive the statute of limitations because the accountants did not promptly receive the IRS's final determination and former employees of the accounting firm failed to timely prepare the return.
In addition, you contend that if legislation enacted by the 1998 General Assembly had been in effect earlier, the 1992 amended return would have been timely filed. This legislation (House Bill 629) extends the statute of limitations for filing an amended return pursuant to a final determination by the IRS from ninety days to one year for returns filed on or after July 1, 1998.
DETERMINATION
Prior to July 1, 1998, Code of Virginia § 58.1-1823 required an amended return to be filed within ninety days of the final determination of any federal change or correction in the liability of a taxpayer. House Bill 629 amended this section to extend the ninety day statute of limitations to one year for amended returns filed on or after July 1, 1998.
In this case, the amended return was filed before the effective date of House Bill 629, but after the then effective ninety day statute of limitations period. While I sympathize with your situation, Virginia law does not provide an exemption for the application of time limitations imposed by Code of Virginia § 58.1-1823. In addition, the department has previously denied refund claims on amended returns when a taxpayer's representative fails to file on a timely basis. See Public Document (P.D.) 90-20, (1/11 /90), copy enclosed.
Accordingly, your request for a refund must be denied. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/16125B
Rulings of the Tax Commissioner