Bulletin Number
VTB 84-21
Tax Type
Individual Income Tax
Description
Amended returns; American Brand, Inc. v. Department of Taxation
Topic
Returns and Payments
Date Issued
12-14-1984
Tax Bulletin 84-21
DATE: December 14, 1984
SUBJECT: American Brands Decision
On August 29, 1984, the Supreme Court of Virginia refused the Department's appeal from the Circuit Court of the City of Richmond in American Brand, Inc. v. Department of Taxation.
Virginia Code §58-1118.1 permits a taxpayer to file an amended return claiming a refund more than three years after the last day prescribed for filing the original return if the amended return is filed within 60 days of a "final determination" of a change in liability for federal taxes.
Among the events which the Department had ruled to constitute a "final determination'; was the signing of the IRS Form 870 (Waiver of Restrictions on Assessment and Collection of Deficiency and Tax and Acceptance of Overassessment.) In this case, the court held that the "final determination" occurred when American Brands was assessed additional tax based upon Form 370, not when American Brands signed Form 870.
The Department interpreted § 58-1118.1 to permit the refund of only the Virginia tax attributable to the change in federal tax liability when an amended return was filed more than three years after the last day prescribed for filing the original return. The court held that an amended return could correct any errors made in the original return and was not limited to changes attributable to changes in federal tax liability.
Regulation § 630-1-1823, adopted on September 19, 1984, follows the interpretation of Va. Code § 58-1118.1 by the court in American Brands.
Tax Bulletins