Could a taxpayer overturn a Virginia income-tax assessment with an appeal that identified no error, relevant facts, or supporting authority?

Plain-English summary

Virginia upheld the 2008 assessment because the taxpayer did not file a complete, evidence-supported appeal. The Department had received federal information associated with a Virginia address and asked the taxpayer for facts needed to determine whether his income was subject to Virginia tax.

After the taxpayer failed to respond, Virginia assessed tax. His later appeal letter still did not identify the alleged error, explain the relevant facts or grounds, cite controlling authority, or provide objective evidence of the correct liability.

Virginia assessments were presumed correct, placing the burden on the taxpayer. The ruling also noted that judicial relief can be unavailable when an erroneous assessment results from a taxpayer's willful refusal to supply required information. With nothing showing the assessment was wrong, Virginia upheld it as immediately due and payable.

What this means for you

• Respond promptly to residency and income information requests.
• State each alleged assessment error separately.
• Include relevant facts, documents, and controlling authority.
• Do not assume a short protest letter shifts the burden back to the Department.

Common questions

Q: Why did Virginia issue the assessment?
A: Federal tax documents were tied to a Virginia address, and the taxpayer did not answer requests needed to determine liability.

Q: What made the appeal incomplete?
A: It omitted alleged errors, relevant facts, grounds, supporting authority, and evidence of the correct liability.

Q: Did the ruling calculate the taxpayer's actual correct tax?
A: No. It upheld the assessment because the taxpayer failed to prove it incorrect.

Citations and references

• Va. Code §§ 58.1-205, 58.1-1821, and 58.1-1826.
• 23 VAC 10-20-165.

Subject

Taxpayer has failed to provide objective evidence of the assessment

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 11-178

Original ruling text

October 25, 2011

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek correction of the individual income tax assessment issued to * (the "Taxpayer") for the taxable year ended December 31, 2008.

FACTS

The Department received information from the Internal Revenue Service that tax documents for the 2008 taxable year were sent to the Taxpayer at a Virginia address. The Department requested additional information from the Taxpayer to determine if the Taxpayer's income was subject to Virginia individual income tax. When the Taxpayer did not respond to the information requests, the Department issued an assessment to the Taxpayer for the year in question.

DETERMINATION

Virginia Code § 58.1-1821 provides, "Any person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner." Title 23 of the Virginia Administrative Code (VAC) 10-20-165 mandates that a taxpayer file a complete appeal within the 90-day limitations period. A complete administrative appeal must include:

1. A statement signed by the taxpayer or duly appointed or authorized agent or

attorney setting forth each alleged error in the assessment;

2. The grounds upon which the taxpayer relies and all facts relevant to the taxpayer's contention; and

3. Controlling legal authority (statutes, regulations, rulings of the Tax Commissioner, count decisions, etc.) upon which the taxpayer's position is based.

Pursuant to Va. Code § 58.1-205, any "assessment of a tax by the Department shall be deemed prima facie correct." As such, the burden of proof is on the Taxpayer to show he was not subject to income tax in Virginia. Virginia Code § 58.1-1826 precludes a court from granting relief to taxpayers seeking correction of erroneous state tax assessments in cases in which the erroneous assessment is attributable to the taxpayer's willful failure or refusal to provide the Department with necessary information as required by law.

In this case, an assessment was issued to the Taxpayer for the 2008 taxable year. The Taxpayer's letter does not set forth the alleged error, relevant facts and grounds upon which he relies as the basis of the appeal. Further, the Department has made several attempts to obtain information from the Taxpayer to accurately determine his liability, if any. The Taxpayer has failed to file a complete appeal with regard to the taxable year at issue.

The Taxpayer has not shown that the assessment issued by the Department is incorrect. Moreover, he has failed to provide objective evidence as to the correct liability for the 2008 taxable year. Therefore, the assessment is upheld and is immediately due and payable.

The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4793524417.D