Virginia State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Virginia, with full citations and the original source on every page.
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Can Virginia disallow both Schedule C business expenses and Schedule A itemized deductions on an audit, and uphold the resulting assessment, if the taxpayer never sends in records to support them?
Yes. Virginia starts its individual income tax computation from federal adjusted gross income (FAGI), and the Department has authority under Va. Code §§ 58.1-219 and 58.1-310 to examine and adjust bot…
Could Virginia disallow a resident's 2022 and 2024 Schedule C deductions when the taxpayer failed to provide the requested audit records?
Yes. Virginia may examine and adjust federal adjusted gross income when reported amounts appear inconsistent with federal law. Because the taxpayer supplied no support for the Schedule C deductions, b…
Did Virginia consider the merits of a Schedule C assessment appeal received after the 90-day administrative deadline?
No. The assessments were issued October 22, 2025, making January 20, 2026 the final day for a timely appeal. The Department received the appeal on February 24, 2026, so the Tax Commissioner denied it …
Could Virginia disallow resident taxpayers' 2024 Schedule C deductions when they failed to provide the requested audit records?
Yes. Virginia may examine and adjust federal adjusted gross income when reported amounts appear inconsistent with federal law. Because the taxpayers supplied no support for their Schedule C deductions…
Could Virginia disallow a resident's 2022-2024 Schedule C deductions when the taxpayer failed to provide the requested audit records?
Yes. Virginia may examine and adjust federal adjusted gross income when reported amounts appear inconsistent with federal law. Because the taxpayer supplied no support for the Schedule C deductions, t…
Can Virginia disallow federal Schedule C business-expense deductions and uphold an income tax assessment when a taxpayer under audit fails to provide documentation to support those deductions?
Yes. Just like the near-identical companion ruling P.D. 26-49, the Tax Commissioner upheld the Department's authority to disallow undocumented Schedule C deductions and adjust federal adjusted gross i…
Can Virginia disallow federal Schedule C business-expense deductions and uphold an income tax assessment when a taxpayer under audit fails to provide documentation to support those deductions?
Yes. Just like the near-identical companion ruling P.D. 26-49, the Tax Commissioner upheld the Department's authority to disallow undocumented Schedule C deductions and adjust federal adjusted gross i…
Can Virginia disallow federal Schedule C business-expense deductions and uphold an income tax assessment when a taxpayer under audit fails to provide documentation to support those deductions?
Yes. The Tax Commissioner upheld the Department's authority to examine and adjust federal adjusted gross income (FAGI), including Schedule C deductions, when the reported amounts cannot be verified, a…
If I concede that the business I reported on Schedule C did not exist, can Virginia still uphold the assessment disallowing those deductions?
No -- Virginia is not bound by your federal Schedule C, and here there was nothing left to salvage. After the Department disallowed the taxpayer's 2022 through 2024 Schedule C deductions for lack of d…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers' Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers' Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers' Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. The Department can examine and disallow Schedule C deductions on a Virginia return, and because an assessment is 'prima facie correct,' the taxp…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers's Sc…
Can Virginia disallow or adjust the Schedule C business deductions on my state return, and what happens if I don't give the auditor documentation?
Yes. Virginia can examine and disallow the federal Schedule C deductions on your state return; the taxpayers' argument that the Department has no authority over Schedule C was rejected. Because Virgin…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Can Virginia disallow my Schedule C deductions on audit, and will it credit tax withheld from my wages that it added to my income?
Mostly no, but with a small win. Virginia is not bound by your federal Schedule C: the Department disallowed the taxpayer's 2022 through 2024 Schedule C deductions for lack of documentation, and becau…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers's Sc…
How long do I have to claim a Virginia individual income tax refund, and does relying on my accountant extend that deadline?
You have three years from the return's original due date to claim a Virginia income tax refund, and the deadline is strict. The Department denied a 2020 nonresident refund claim filed in June 2024 -- …
When does Virginia's 90-day deadline to appeal a tax assessment start, and does a later bill restart the clock?
Virginia strictly enforces a 90-day deadline to appeal a tax assessment, measured from the date on the official 'Notice of Assessment' -- not from a later consolidated bill or statement of balance due…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayers's Sc…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
Is Virginia bound by my federal Schedule C, and who has the burden when the Department disallows my deductions on audit?
No -- Virginia is not bound by your federal Schedule C. This is one of a series of materially identical Virginia Schedule C desk-audit determinations. Here the Department disallowed the taxpayer's Sch…
When a Virginia refund depends on an amended federal return, does the one-year clock run from when you filed the federal amendment or from when the IRS accepted it?
Denied -- filed too late. When a Virginia refund depends on a change to your federal return, you have one year from the 'final determination date' to file the amended Virginia return. For a change mad…
If you mail a Virginia return but the Department never receives it, does mailing count as filing for the three-year refund deadline?
Denied. The taxpayer filed a 2019 Virginia return in April 2024 claiming a refund, but Virginia's three-year refund window (Va. Code § 58.1-499 D) had already closed on May 1, 2023. The taxpayer said …
If you file a Virginia return years late, can an amended return or a delayed IRS 'final determination' still get your overpayment refunded?
Denied. A couple filed their 2018 and 2019 Virginia returns years late—the 2018 return in December 2023 and the 2019 return in April 2024—each reporting an overpayment. Virginia's three-year refund de…
If I move to Virginia partway through the year, am I taxed as a full-year resident -- and can I get a credit for the income tax I paid to my old state?
You are taxed only as a part-year resident. This taxpayer moved from another state to Virginia in 2020; the Department had assessed her as a full-year Virginia resident, but the Commissioner held she …
What documentation does Virginia require to keep a Schedule C business-expense deduction, and can the Cohan rule or a federal Tax Court win on another year save undocumented expenses?
Mostly denied, with one small win. Virginia disallowed a sole proprietor's Schedule C business-expense deductions for 2021 because the taxpayers couldn't prove they had actually paid the expenses. On …
If the U.S. Tax Court later proves the IRS adjustment wrong, can Virginia still refund the tax it assessed on that adjustment, or do its filing deadlines control?
Denied—right on the merits, too late on the deadlines. The IRS adjusted the taxpayers' 2018 federal return, so Virginia assessed additional tax in March 2022 and later collected it by applying part of…
If I'm a Virginia resident working remotely from home for an out-of-state employer, can I claim a Virginia credit for the income tax that state charged me?
Denied. A Virginia resident who spent early 2021 working remotely from his Virginia home for an out-of-state employer claimed a credit on his Virginia return for the income tax he paid that state. The…
The company I invested in sent my Qualified Equity and Subordinated Debt Investments Tax Credit paperwork to the wrong address, so I missed the April 1 deadline. Can I still get the credit?
Denied -- the deadline is hard, and it does not matter that a third party dropped the ball. This investor applied for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit for a 202…
Can Virginia extend or pause its three-year refund deadline for a taxpayer who couldn't file on time because of illness or disability?
Denied for the closed years. A taxpayer filed his 2018, 2019, and 2020 Virginia returns together in May 2024, seeking refunds; Virginia paid the 2020 refund but denied 2018 and 2019 as outside the thr…
Does the six-month filing extension give me three more years to amend for a refund, even if I filed my original return before the original due date?
Denied. Taxpayers timely filed their 2020 Virginia return, then filed an amended return seeking a refund, which the Department rejected as too late. They argued the amendment was within three years of…
Is Virginia's April 1 deadline for the Qualified Equity and Subordinated Debt Investments Tax Credit firm, and does mailing the application before the deadline count?
Denied. Investors sought Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit (Form EDC) for a 2024 investment. They said they mailed the application in March 2025, but the Departm…
I donated over $5,000 of used clothing and household goods to charity but never got a qualified appraisal — can Virginia at least let me deduct the first $5,000 of it?
No — missing the required substantiation for your donation's ACTUAL value denies the entire deduction, with no fallback to a lower tier's threshold. A couple claimed cash and noncash charitable-contri…
If I move out of Virginia but keep some ties here -- like renewing my Virginia driver's license or keeping a house -- when do I stop being a Virginia resident for income tax?
The assessment was abated -- the taxpayer successfully changed his domicile out of Virginia. The Department had assessed him as a 2020 Virginia resident, but he had moved to another state ("State A") …
I got a new or consolidated bill for an old tax assessment. Does that new bill restart my 90-day deadline to appeal?
No -- a later bill does not restart your appeal clock, and this taxpayer's 2024 appeal of 2014-2015 assessments was time-barred. Virginia assessed her 2010 and 2011 income tax in March 2014 and March …
I live and work overseas but my family stays in our Virginia home and I kept a Virginia license and voter registration. Am I still a Virginia resident for income tax?
The assessment was abated -- he was not a Virginia resident. This taxpayer had lived and worked abroad ("Country A") since 2008, but the Department taxed him as a 2019 Virginia domiciliary resident be…
I donated clothes, furniture, and household goods to charity. What records does Virginia require to deduct them, and is a completed Form 8283 enough?
The deductions were disallowed and the assessments upheld. These joint filers claimed noncash charitable contributions -- clothing, toys, holiday decorations, furniture, electronics, and housewares --…
I retired and moved to another state, but I kept my Virginia house and license and never answered Virginia's residency questionnaire. Am I still a Virginia resident?
The assessment was upheld -- the taxpayer stayed a Virginia domiciliary resident because he failed to prove he abandoned Virginia. This is the losing counterpart to Virginia's domicile wins: to change…
I moved to another state right before the COVID-19 pandemic but never got that state's driver's license or vehicle registration. Am I still a Virginia resident for taxes?
The assessment was abated and her payments refunded with interest -- she was not a Virginia domiciliary resident for 2020. She had moved around for work for years and began living and working in anoth…
I moved to another state and vote there, but I still own rental houses in Virginia and kept my Virginia driver's license. Am I still taxed as a Virginia resident?
The assessment was abated -- she was not a Virginia domiciliary resident for 2019. She had moved in 2015 into a home she owned in another state ("State A"), gotten a State A ID card, and, most importa…
I already live in another state but got a Virginia driver's license and registered a car here. Does that make me a Virginia resident for income tax?
The assessment was abated -- the taxpayer was not a Virginia resident for 2019. He had been domiciled in another state ("State A") since 2006, and the Department had already accepted that change when …
If the IRS audits my federal return and raises my income, can I fight the resulting Virginia assessment by arguing the IRS got it wrong?
No -- the assessment stood. When the IRS audits your federal return and increases your income, Virginia starts from your federal adjusted gross income and follows that final federal result; it does no…
I gave Virginia my donation lists to back up my charitable deductions, but they were disallowed. Why?
The assessment was upheld. This taxpayer claimed charitable-contribution itemized deductions for the 2020 tax year and, asked for proof, submitted donation lists. The Department found that at least 8 …
I sent Virginia my donation lists to support my charitable deductions, but they were disallowed. Why?
The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…
We filed jointly and sent Virginia our donation lists, but our charitable deductions were still denied. Why?
The assessments were upheld. This married couple claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, but when the Department asked for proof, it found that at least 14 of the…
The Department disallowed my charitable deductions even though I sent in donation lists. Why isn't my documentation good enough?
The assessments were upheld -- the documentation was not credible. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, and when the Department asked for proof, …
How much documentation do I need to deduct donations of used goods like clothing and furniture on my Virginia return -- and if I don't have an appraisal, can I at least deduct part of it?
Mostly upheld, with partial relief. Virginia follows the federal (IRS) rules for proving noncash charitable donations, which set three tiers of documentation: for property up to $500 you need a detail…
I backed up my charitable deductions with donation lists, but Virginia disallowed them. Why?
The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…
I've lived and worked abroad for years but kept a Virginia driver's license, voter registration, and a couple of properties. Am I still a Virginia resident for income tax?
The assessments were abated -- the taxpayer successfully changed his domicile from Virginia to a foreign country ("Country A") before 2019, so he owed no Virginia income tax for 2019 or 2020. Changing…
Virginia says IRS data shows I should have filed a return, but I think I lived in another state. What happens if I don't respond to the Department's questions?
The assessment was upheld -- but with a final 30-day chance to fix it. The Department got IRS data suggesting this taxpayer should have filed a 2020 Virginia return; he hadn't, and when asked for info…
I took an out-of-state job for two years, then moved back to Virginia — was I a Virginia resident the whole time for income tax?
Yes — he never abandoned his Virginia domicile, so he was taxable as a Virginia resident for 2020 (with credit for the other states' tax). A Virginia domiciliary took a job in 'State A' in February 20…
I moved to another state years ago but kept voting in Virginia and renewing my Virginia driver's license — am I still a Virginia resident for income tax?
Yes — he stayed a Virginia domiciliary resident, so his income was taxable in Virginia (though he gets credit for the other state's tax). A retiree left Virginia in 2011, moved to 'State A' in 2014, b…
My pension contributions were taxed by another state before I moved to Virginia — can I subtract part of my pension payments on my Virginia return, and how do I compute it?
Yes — the retiree qualifies for Virginia's retirement income subtraction, and because his pension pays fixed monthly annuity payments he must use the federal 'simplified method' to compute how much of…
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These are official tax letter rulings and advisory opinions issued by Virginia's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.