Was a September 2013 refund claim for tax year 2009 timely when the taxpayers paid by the original due date and filed within Virginia's extension period?

Subject

Extended due date kept the refund claim timely

Plain-English summary

Virginia found the taxpayers' September 2013 amended return and refund claim for 2009 timely. They had paid the full tax balance by the original May 2010 due date and filed the original return before the six-month extended due date.

When those extension conditions are satisfied, Virginia's three-year period for filing an amended return runs from the extended due date rather than the original due date. The Department therefore directed that the amended return be processed and the appropriate refund issued.

What this means for you

• A valid Virginia filing extension can also shift the starting point for the three-year amended-return deadline.
• The taxpayer must pay the properly estimated balance by the original due date and file within the extended period.
• If the extension conditions are missed, Virginia may treat the taxpayer as though no extension was granted.
• Keep proof of both payment and filing dates when a refund deadline depends on an extension.

Citations and references

• Va. Code §§ 58.1-341 A, 58.1-344, and 58.1-1823.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 14-149

Original ruling text

August 27, 2014

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek a refund of individual income tax paid by your clients, * (the "Taxpayers"), for the taxable year ended December 31, 2009.

FACTS

On May 26, 2010, the Taxpayers filed their Virginia individual income tax return for the 2009 taxable year. They filed an amended return in September 2013, claiming a refund. The Department denied the refund because the amended return was not filed within the statute of limitations. The Taxpayers filed an appeal, contending the amended return was filed within three years of the extended due date of the original return.

DETERMINATION

Virginia Code § 58.1-341 A requires that taxpayers file individual income tax returns by May 1 of the year following the taxable year for which the return is filed. Taxpayers are allowed to elect to take a six month extension to file their returns. In order to elect an extension, a taxpayer must (i) file the return within the extended period, and (ii) on or before the original due date for the filing of the return, pay the full amount properly estimated as the balance of the tax due for the taxable year. See Va. Code § 58.1-344. If the taxpayer intends to take the extension but then does not file a return or pay the full amount of the tax due by the extended due date, the taxpayer is treated as if no extension had been granted. See Public Document (P.D.) 10-238 (9/30/2010).

When a return has been filed on or before an original or extended due date, whether such extension was granted by the Department or automatically, an amended return must be filed within three years of the original or extended due date, as applicable. See Va. Code § 58.1-1823.

In this case, the Taxpayers paid the full amount of tax due prior to the due date of May 3, 2010 (May 1 fell on a Saturday) and filed their original return before the extended due date. As such, the Taxpayers had three years from the extended due date to file an amended return and claim a refund for an overpayment of tax. By filing an amended return in September 2013, the Taxpayers claim for refund was made prior to the expiration of the statute of limitations. Accordingly, the amended return will be processed and the appropriate refund will be issued.

The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions 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/1-5627410032.M