Could Virginia consider an administrative tax appeal filed more than 90 days after the assessment notice was mailed?

Subject

Taxpayer's appeal application barred by the statute of limitations.

Plain-English summary

Virginia adjusted a military couple's 2012 joint return by adding back military basic pay and mailed an assessment on March 29, 2016. The taxpayer later tried to appeal on the ground that the service member was not a Virginia resident.

Virginia did not reach that residency issue. An administrative appeal had to be filed within 90 days after the assessment notice was mailed, making the deadline June 27, 2016. The appeal was not filed until August 4.

Because the statutory deadline had expired, the appeal was barred and the assessment remained due and payable.

What this means for you

• The 90-day clock runs from the date Virginia mails the assessment notice.
• A complete appeal must reach the Department within that period.
• A potentially valid underlying tax argument does not extend the filing deadline.
• Calendar the appeal date immediately when an assessment arrives.

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. 17-119

Original ruling text

June 29, 2017

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 Taxpayer, an active duty military service member, filed a joint 2012 Virginia income tax return with her husband. The husband's military basic pay was subtracted from their Virginia adjusted gross income on the grounds that he was domiciled in * (State A). The Department adjusted the return, added back the military basic pay, and issued an assessment. The Taxpayer appealed the assessment contending he was not a resident of Virginia.

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 on March 29, 2016. Based on the provisions of Va. Code § 58.1-1821, the Taxpayer was required to file an administrative appeal by June 27, 2016. The Taxpayer did not file an appeal until August 4, 2016. Therefore, the Taxpayer's appeal application pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations. Accordingly, the assessment remains due and payable.

The Code of Virginia sections and regulations 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/816.o