Could Virginia consider an administrative appeal filed December 10 when the 90-day deadline expired November 23?

Subject

Taxpayer did not file a timely appeal.

Plain-English summary

Virginia assessed the taxpayer for 2012 after IRS information showed a Virginia mailing address and the taxpayer did not answer a residency inquiry. The assessment notice was issued August 25, 2015.

Virginia law required a complete administrative appeal within 90 days after the assessment. The deadline was November 23, but the taxpayer filed on December 10. The Tax Commissioner therefore lacked a timely application for correction and treated the appeal as barred.

The assessment had been made from the best information available and was presumed correct. Even though the formal appeal was late, Virginia asked the taxpayer to file a 2012 return within 30 days so the assessment could be adjusted to a more accurate liability.

Common questions

Can the Tax Commissioner overlook a late 90-day appeal? This ruling treated the statutory deadline as a bar to the application.

Did missing the appeal deadline prevent every adjustment? No. Virginia still invited a return that could change the best-information assessment.

Citations and references

• Va. Code §§ 58.1-111, 58.1-1820, 58.1-1821, and 58.1-205.
• 23 VAC 10-20-165.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 16-2

Original ruling text

February 2, 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 year ended December 31, 2012.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer filed his 2012 federal income tax return using a Virginia mailing address. The Department requested additional information to determine whether the Taxpayer was also required to file a Virginia return. When no response was received, the Department issued an assessment. The Taxpayer appealed, contending he was a resident of * (State A) during the taxable year at issue.

DETERMINATION

Appeal — Statute of Limitations

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 on August 25, 2015. Thus, based on the provisions of Va. Code § 58.1-1821, the Taxpayer was required to file an administrative appeal by November 23, 2015. The Taxpayer did not file his appeal until December 10, 2015. Therefore, the Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations.

Assessment Based on Available Information

The assessment at issue was made based on the best information available to the Department pursuant to Va. Code § 58.1-111. Virginia Code § 58.1-205 provides that in any proceeding relating to the interpretation of the tax laws of Virginia, an "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.

The Taxpayer may have additional information that more accurately reflects his Virginia taxable income. Accordingly, the Taxpayer is hereby requested to file a Virginia income tax return for the 2012 taxable year to more accurately reflect his Virginia income tax liability.

The Taxpayer should file the requested return within 30 days of the date of this letter. Mail the return and payment for the corresponding liability to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23218-7203, Attention: *. Once the return is received, it will be processed and the assessment will be adjusted accordingly. If the return is not filed within the allotted time, the assessment will be considered to be correct and collection action will resume.

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 determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns
Tax Commissioner

AR/1-6207754709.M