Could a taxpayer challenge Virginia's 2008 and 2012 income-tax assessments after the 90-day administrative appeal periods expired?

Subject

Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations.

Plain-English summary

An individual argued that he was not a Virginia resident in 2008 or 2012, but he filed his administrative appeal after the statutory deadline.

Va. Code § 58.1-1821 and 23 VAC 10-20-165 required a complete appeal within 90 days after assessment. Virginia issued the 2008 assessment on April 4, 2011 and the 2012 assessment on August 8, 2013. The corresponding deadlines were July 5, 2011 and November 6, 2013.

The taxpayer did not appeal until February 16, 2015. Because the 90-day periods had expired, the application was barred without reaching the merits of the residency claims. Both assessments remained due and payable.

Citations and references

• Va. Code §§ 58.1-1821 and 58.1-1820.
• 23 VAC 10-20-165.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 16-165

Original ruling text

August 25, 2016

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 years ended December 31, 2008 and 2012.

FACTS

The Taxpayer filed Virginia resident individual income tax returns for the 2006, 2007, 2009 and 2010 taxable years and a part-year resident return for the 2011 taxable year. The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return for the 2008 taxable year. A review of the Department's records showed the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer in order to determine if his income was subject to Virginia income tax. When a response was not received, the Department issued an assessment. In addition, an assessment was issued for 2012 based on information provided by the Taxpayer. The Taxpayer filed an appeal, contending he was not a resident of Virginia in 2008 and 2012.

DETERMINATION

Virginia Code § 58.1-1821 states, “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. Such application shall be in the form prescribed by the Department and shall fully set forth the grounds upon which the taxpayer relies and all facts relevant to the taxpayer's contention.” Pursuant to Va. Code § 58.1-1821 and Title 23 of the Virginia Administrative Code (VAC) 10-20-165, a complete appeal must be filed with the Department within 90 days from the date of assessment. In addition, Va. Code § 58.1-1820 provides that assessments made by the Department are deemed to be made when a written notice of assessment is mailed to a taxpayer at his last known address.

In this case, the Department issued the assessment for the 2008 taxable year on April 4, 2011, and the assessment for the 2012 taxable year on August 8, 2013. Based on the provisions of Va. Code § 58.1-1821, the Taxpayer was required to file an administrative appeal by July 5, 2011 and November 6, 2013, respectively. The Taxpayer did not file his appeal until February 16, 2015, well after the appeals period had expired. Therefore, the Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations.

Accordingly, the assessments for the taxable years ended December 31, 2008 and 2012 remain due and payable. Updated bills will be issued shortly, which will include accrued interest. Payment of the assessments should be made within 30 days of the bill date in order to avoid the accrual of additional interest.

The Code of Virginia sections and regulation 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 ruling, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns
Tax Commissioner

AR/1-6268808019.D