March 26, 2018
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek a correction of the individual income tax assessed to ***** (the “Taxpayers”) for the taxable year ended December 31, 2008.
FACTS
The Taxpayers purchased a land preservation tax credit (the “Credit”) in 2008. They claimed a majority of the Credit on their 2008 Virginia individual income tax return. In April 2012, the Taxpayers received notice that the Credit was devalued and that a notice of assessment would be issued shortly. Department records indicate that an assessment was issued in accordance with the devalued Credit.
Pursuant to a settlement of an appeal with the donor of the land preservation easement, the Credit was revalued in May 2017. The Taxpayers' adjusted assessment was sent in September 2017. The Taxpayers appeal, contending that both the original and adjusted assessments are barred by the statute of limitations because the April 2012 assessment was never received.
DETERMINATION
Virginia Code § 58.1-1812 provides that the Department must assess omitted taxes within three years of the later of the due date of the return or the actual date that the return was filed. As such, an assessment for the 2008 taxable year must have been issued on or before May 1, 2012. The Taxpayers contend that they never received the assessment issued in April 2012.
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 Department's records indicate that the enclosed assessment was mailed to the Taxpayers' last known address within the three-year limitations period on April 5, 2012. Accordingly, the assessment was timely made.
Title 23 of the Virginia Administrative Code (VAC) 10-20-160 D 6 provides that the date of an assessment is not affected if the amount of the assessment is later corrected, whether the correction is the result of an application under an appeal, protective claim for refund, or on the Department's own initiative after receiving additional information. In this case, the assessment issued in April 2012 was adjusted in September 2017 pursuant to the settlement of an appeal. As such, the assessment for the 2008 taxable year remains due and payable.
The Taxpayer will receive an updated bill with accrued interest to date. The bill should be paid within 30 days of the bill date to avoid the accrual of additional interest.
The Code of Virginia and regulation 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 ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1464.B