Did illness or disability suspend Virginia's three-year deadline when a taxpayer filed a refund return 27 days after the deadline?

Plain-English summary

A taxpayer's late-filed 2014 return showed an overpayment and eliminated an assessment, but it reached Virginia 27 days after the three-year refund deadline. She cited medical conditions.

Virginia could not issue the refund. Disability changes who must ensure filing, not the statutory deadline.

Deadline calculation

The 2014 return was due May 1, 2015. Under Va. Code § 58.1-499(D), a refund claim had to arrive within three years—by May 1, 2018. The original return arrived May 28.

Disability rule

Va. Code § 58.1-341(F) requires a fiduciary or authorized agent to file for an individual unable to file because of disability. It does not suspend the refund limitation for physical or mental disability.

What this means for you

• A late return can eliminate an assessment yet still lose the refund.
• Arrange fiduciary or agent filing when illness prevents personal filing.
• Track the original statutory due date, not the assessment date.
• File a protective claim before the three-year period ends.

Common questions

Q: Did Virginia dispute that illness can be a disability?

A: No. It held that disability does not toll the refund deadline.

Q: Why abate the assessment but deny the refund?

A: The return could correct liability, while the separate refund statute barred payment of the late claim.

Citations and references

• Va. Code § 58.1-499(A), (D) — refund and limitation
• Va. Code § 58.1-341(A), (F) — filing and disability
• Related Virginia ruling cited: P.D. 10-204

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 19-29

Original ruling text

April 8, 2019

Re: § 58.1-1821 Appeal: Individual Income Tax

Dear *:

This will respond 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, 2014.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2014 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a return. The Department requested additional information in order to determine if the Taxpayer was taxable in Virginia. When a response was not received, the Department issued an assessment. Subsequently, the Taxpayer mailed a 2014 Virginia individual income tax return claiming a refund. The Department abated the assessment, but denied the refund request because the return was filed beyond the statute of limitations for claiming a refund. The Taxpayer appeals, contending that the refund should be paid.

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:

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 2014 individual income tax return was May 1, 2015. As such, the return was required to be filed by May 1, 2018, in order to receive a refund for the 2014 taxable year. The Taxpayer’s original 2014 income tax return was not filed until May 28, 2018, after the statute of limitations had expired.

The Taxpayer cites her medical conditions as prohibiting her ability to timely file her return. 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 Virginia 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).

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. Accordingly, I cannot grant your request for refund of the overpayment of individual income tax for the taxable year ended December 31, 2014.

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

Related Documents

88-217

10-204