Could a taxpayer revive decades of Virginia assessments through a late appeal that gave no objective facts, specific errors, or valid legal authority?

Plain-English summary

A taxpayer challenged assessments spanning many years with unsupported residency and tax-validity assertions and demanded civil and criminal penalties against Virginia.

Virginia rejected the challenge. Nearly all years were outside the 90-day appeal window, and the only timely year lacked the facts, alleged errors, and legal authority required for a complete appeal.

Timeliness

An assessment is made when written notice is mailed to the last known address. A complete administrative appeal must be filed within 90 days.

The December 18, 2018 appeal could reach only assessments issued on or after September 19, 2018. Of all challenged years, only the 2014 assessment met that date test.

Completeness and fraud penalty

The 2014 correspondence did not identify a specific assessment error or valid controlling authority. Virginia therefore denied it as incomplete under 23 VAC 10-20-165.

The ruling found no factual or legal basis for the taxpayer's fraud accusations. It further stated that deliberately failing to file solely on such assertions intentionally understates liability to evade tax and triggers the 100% fraud penalty in Va. Code § 58.1-308.

What this means for you

• Calendar the 90-day administrative appeal deadline.
• State each alleged error and the relevant facts.
• Cite controlling statutes, regulations, rulings, or cases.
• Unsupported tax-invalidity claims can worsen penalty exposure.

Common questions

Q: Why could Virginia address only 2014?

A: It was the only assessment issued within 90 days before the appeal was mailed.

Q: Was a timely letter alone enough?

A: No. The appeal also had to contain sufficient facts, errors, and legal authority.

Q: Was further review available?

A: The ruling identified judicial relief under Va. Code § 58.1-1825.

Citations and references

• Va. Code §§ 58.1-1820, 58.1-1821 — assessment and appeal timing
• 23 VAC 10-20-165 — complete appeal requirements
• Va. Code §§ 58.1-308, 58.1-1825 — fraud penalty and judicial remedy

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 19-33

Original ruling text

April 17, 2019

Re: § 58.1-1821 Appeal: Individual Income Tax

Dear *:

This will reply to your correspondence in which you contest all individual income tax liability assessed to * (the “Taxpayer”) for the 1981 through 1988, 1990 through 1993, 1998 through 2001, 2005 through 2008, 2011, 2012, and 2014 taxable years.

FACTS

The Taxpayer has submitted a letter in which he has made multiple claims and assertions. No objective evidence or reasonable explanation has been provided for his claims. It appears the Taxpayer is asserting he was not a resident for some of the taxable years at issue and an uncited 1936 federal court case ruling proves he was not required to pay taxes. In addition to demanding that assessments be abated, the Taxpayer has asserted a claim for civil and criminal penalties against the Department.

DETERMINATION

Statute of Limitations

Virginia Code § 58.1-1821 states, “Any person assessed with any tax administered by the Department of Taxation may, within 90 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 taxpayers contention.” Pursuant to Virginia 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, Virginia 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.

The Taxpayer filed an appeal for the taxable years at issue with the Department by letter postmarked December 18, 2018. Accordingly, the Department only has jurisdiction to address the appeal of assessments issued on and after September 19, 2018. The only assessment issued after that date was the assessment for the 2014 taxable year.

Appeal Requirements

Title 23 of the Virginia Administrative Code (VAC) 10-20-165 A defines a complete appeal as “an administrative appeal containing sufficient information as prescribed in subsection D of this section, so that the grounds upon which the taxpayer relies in contesting an assessment are fully set forth to allow the Tax Commissioner to make an informed final determination.”

Title 23 VAC 10-20-165 D provides that:

1. In order to be complete, an administrative appeal shall contain the following: … (f) A statement … setting forth each alleged error in the assessment, the grounds upon which the taxpayer relies and all facts relevant to the taxpayer’s contention; and (g) Controlling legal authority (statutes, regulations, rulings of the Tax Commissioner, court decisions, etc.) upon which the taxpayer’s position is based.

For the 2014 taxable year, the correspondence filed by the Taxpayer does not constitute a complete appeal. The appeal neither alleges any errors in the assessment, nor provides any valid legal authority upon which the Taxpayer’s position is based. Because the Taxpayer has not alleged any grounds upon which the Department may act, the appeal of the assessment for the 2014 taxable year must be denied as incomplete.

CONCLUSION

The Taxpayer’s claim that the Department has committed fraud and owes the Taxpayer civil penalties has no basis in fact or Virginia law. An individual who fails to file income tax returns based solely on such a claim has intentionally understated his or her income tax liability with the intent to evade tax and is subject to a 100% fraud penalty pursuant to Virginia Code § 58.1-308.

The Taxpayer has written to the Department numerous times regarding these assessments and has received abundant information regarding such assessments. Accordingly, the assessments at issue are correct and remain due and payable. An updated bill will be issued shortly, which will include a fraud penalty and accrued interest. Payment of the assessments should be made within 30 days of the bill date in order to avoid the accrual of additional penalty and interest.

If the Taxpayer wishes to appeal this matter further, he may pursue a judicial remedy under Virginia Code § 58.1-1825.

The Code of Virginia sections 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 the Office of Tax Policy, Appeals and Rulings, at *.

Sincerely,

Craig M. Burns

Tax Commissioner

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