Tax Type
Individual Income Tax
Description
Department denied the refund because the statute of limitations had expired
Topic
Records/Returns/Payments
Statute of Limitations
Date Issued
08-27-2012
August 27, 2012
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you appeal the denial of an individual income tax refund on behalf of your client, ***** (the "Taxpayer"), for the taxable year ended December 31, 2005. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer did not file Virginia individual income tax returns for the 2005 through 2007 taxable years. You represent that after her husband passed away in 2004, the Taxpayer became ill and died in 2008. The executor of the estate filed 2005 through 2007 individual income tax returns in December 2009. Payments for the tax liabilities incurred for the 2006 and 2007 taxable years were made when the returns were filed. The 2005 return reported an overpayment. The Department denied the refund because the statute of limitations had expired. The executor appeals the denial of the refund, contending the Taxpayer's health issues led to her failure to file the returns.
DETERMINATION
Virginia Code § 58.1-499 D specifies that the Department cannot issue a refund, "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 or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon with the tax is based."
In addition, Va. 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).
In this case, the Taxpayer's extension of time to file her 2005 return became invalid when the original return was not filed by the extended due date, November 1, 2006. As such, the Taxpayer had three years from the original due date, May 1, 2006, in which to timely file the 2005 return and receive a refund of the overpayment. The original 2005 Virginia income tax return was not filed until December 2009, well after the statute of limitations had expired on May 1, 2009. Accordingly, I must deny the request for the 2005 refund.
The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions regarding this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Craig M. Burns
Tax Commissioner
- Craig M. Burns
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AR/1-5023500076.D
Rulings of the Tax Commissioner