Did disability suspend Virginia's three-year deadline for claiming a 2012 income-tax refund?

Subject

Statute of Limitation

Plain-English summary

Virginia denied a refund reported on an original 2012 individual income-tax return filed in October 2016.

The return was due May 1, 2013, and the three-year refund period ended May 2, 2016 because May 1 fell on a Sunday. Filing in October missed that deadline. Va. Code § 58.1-499 D gave the Department no discretion to extend it.

The taxpayer argued that disability tolled the limitation period. Virginia rejected that argument: Va. Code § 58.1-341 F provides for a fiduciary or authorized agent to file when a taxpayer cannot do so because of disability, but it does not suspend the refund deadline.

What this means for you

Disability did not preserve an otherwise late refund claim under the law applied in this ruling. If a taxpayer cannot file personally, arranging a timely filing through an authorized person remains essential.

Citations and references

• Va. Code §§ 58.1-499 A and D and 58.1-341 A and F.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 17-9

Original ruling text

February 17, 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 October 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 the statute of limitations tolled because she was disabled.

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. Virginia Code § 58.1-341 F provides that an individual who is unable to make a return because of a disability has the responsibility of having such return filed by a fiduciary or duly authorized agent. Thus, Virginia law addresses the requirements of filing returns for taxpayers who have disabilities. While a severe illness or medical condition may be considered a disability for purposes of Va. Code § 58.1-341 F, the statute does not provide for the suspension of the statute of limitations for an individual who is mentally or physically disabled. See Public Document (P.D.) 10-204 (9/2/2010).

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 original 2012 Virginia income tax return was not filed until October 2016, after the statute of limitations had expired. The provisions of Va. 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. Accordingly, I must deny your 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 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/1157.M