Could a taxpayer receive a 2012 Virginia income tax refund when the original return was filed in December 2016?

Subject

Statute of Limitations and Refunds

Plain-English summary

Virginia denied a refund shown on a 2012 individual income tax return because the taxpayer filed the original return after the three-year refund period expired.

The 2012 return was due May 1, 2013. Because May 1, 2016 fell on a Sunday, the taxpayer had through May 2, 2016 to file a refund claim. The return was not filed until December 2016.

Va. Code § 58.1-499(D) gave the Department no discretion to issue the late refund. The taxpayer's lack of awareness of the deadline did not change the result.

What this means for you

An overpayment does not remain refundable indefinitely. A late-filed original return can report a real overpayment while still being too late to recover it, so taxpayers should track the statutory refund deadline separately from the amount owed or withheld.

Common questions

Why was the deadline May 2 rather than May 1, 2016? May 1 fell on a Sunday.

Could the Department excuse the delay? No. The ruling says the statute provided no discretion to extend the three-year period.

Did not knowing the deadline help? No. Ignorance of the law did not avoid the deadline's consequences.

Citations and references

• Va. Code § 58.1-499(A), (D) — refunds and the three-year claim limit.
• Va. Code § 58.1-341(A) — individual income tax filing deadline.
• Brown v. Armistead, 27 Va. 594, 601 (1828), and the prior public documents cited by the Commissioner.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 17-211

Original ruling text

December 19, 2017

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek a refund of the overpayment of individual income tax paid by * (the “Taxpayer”) for the taxable year ended December 31, 2012.

FACTS

The Taxpayer filed a 2012 Virginia individual income tax return in December 2016, reporting an overpayment of income tax and requesting a refund. The Department denied the refund because the return was filed beyond the refund period allowed by the statute of limitations. The Taxpayer appeals the Department's denial, contending he was not aware of the statutory deadline to claim a refund.

DETERMINATION

Virginia Code § 58.1-499 A provides that in the case of any overpayment of any tax, whether by reason of excessive withholding, overestimating and overpaying estimated tax, or error on the part of the taxpayer, the Department shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part that:

No refund under this section . . . shall be made . . . whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return . . . [Emphasis added.]

Virginia Code § 58.1-341 A requires that a taxpayer file an individual income tax return by May 1 of the year following the tax year for which the return is filed. Based on Virginia statutes, the due date for the Taxpayer's 2012 individual income tax return was May 1, 2013. As such, the return was required to be filed by May 2, 2016, in order to receive a refund for the 2012 taxable year (May 1, 2016, was on a Sunday).

The Department has ruled in similar situations numerous times. See, for example, Public Document (P.D.) 84-137 (8/24/1984), P.D. 87-64 (2/27/1987), P.D. 95­101 (5/5/1995), P.D. 07-49 (4/26/2007), P.D. 10-38 (4/8/2010), P.D. 15-29 (2/24/2015), and P.D. 17-18 (3/13/2017).

The original 2012 Virginia income tax return was not filed until December 2016, after the statute of limitations had expired on May 2, 2016. The provisions of Virginia Code § 58.1-499 D are clear and do not provide the Department with any discretion in enforcing the three-year limitations period to apply for a refund. In addition, the Supreme Court of Virginia has long accepted the principle that individuals may not avoid the legal consequences of their actions by pleading ignorance of the law. See Brown v. Armistead , 27 Va. 594, 601, 1828 Va. LEXIS 43 (1828). The Taxpayer, therefore, could not avoid the application of the statute of limitations by being unaware of it. Accordingly, I cannot approve the Taxpayer's request for refund of the overpayment of individual income tax for the taxable year ended December 31, 2012.

The Code of Virginia sections and public documents 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/1410.M