October 19, 2015
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek reconsideration of the Department's determination letter, issued as Public Document (P.D.) 15-45 (3/18/2015), to ***** (the "Taxpayers") for the taxable year ended December 31, 2010.
FACTS
The Taxpayers filed an individual income tax return for the 2010 taxable year in September 2014. The Department processed the return but denied the refund because the return was not filed within the statute of limitations. The Taxpayers filed an appeal, contending the return was filed within three years of the extended due date.
In P.D. 15-45, the Department determined that the statute of limitations began to run as of the original due date of the return because the Taxpayers failed to elect the extension when they did not file their return by the extended due date. As a result, the denial of the refund was upheld. The Taxpayers request reconsideration, contending that they had come from a state that did not have an income tax and were unfamiliar with Virginia's tax laws. The Taxpayers also refer to information found on the Department's website regarding extensions. In addition, the Taxpayers state that certain circumstances contributed to the filing delay.
DETERMINATION
Statute of Limitations
Statute of limitations serve to protect individuals, businesses, and governments from situations "in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise." See United States v. Kubrick, 444 U.S. 111, 117, 100 S.Ct. 352, 317 (1979). The United States Supreme Court also expressed reluctance in the Kubrick decision to extend the statute of limitations beyond that which the legislature intended. The Department is unwilling to do so as well.
Ignorance of the Law
The Supreme Court of Virginia has long accepted the principle that individuals may not avoid the legal consequences of their actions by pleading ignorance of the law. See Brown v. Armistead, 27 Va. 594, 601, 1828 Va. LEXIS 43 (1828). The Taxpayers, therefore, could not avoid the application of Virginia's tax laws, including any applicable statutes of limitations, merely because they were unaware of them or believed they were complex.
Web Site Information
The Taxpayers refer to statements on the Department's web site indicating the extension was automatic and no application was required to obtain it. It appears that the Taxpayers believe this information indicates the last day for timely filing an individual income tax return is the extended due date in all cases.
The information provided on the Department's website is intended to provide helpful guidance to taxpayers. It is not intended to provide a detailed explanation of every provision or nuance of Virginia's tax law. Even though the extension is "automatic" in that the taxpayer does not have to submit a separate application for it, the taxpayer must nevertheless elect it by (i) filing the return within the extended due date, and (ii) on or before the original due date for the filing of the return, paying the full amount properly estimated as the balance of the tax due for the taxable year. See Va. Code § 58.1-344. As stated in P.D. 15-45, if the taxpayer does not file a return or pay the full amount of the tax due by the extended due date, the taxpayer is treated as if no extension had been granted. See P.D. 10-238 (9/30/2010).
Additional Circumstances
The Taxpayers state that there were other circumstances that contributed to their delay in filing the return, but they do not provide details. The Taxpayers have previously explained that the husband experienced a loss of employment around the time of the original filing deadline. Such circumstances, however, would not have extended the applicable filing deadlines or otherwise have affected the statute of limitations.
CONCLUSION
The law and the Department's policy are clear with respect to the application of the statute of limitations in this case. Accordingly, I cannot grant the Taxpayers' request for an income tax refund for the 2010 taxable year. This letter constitutes the Department's final determination on this matter.
The Code of Virginia sections and public documents 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/1-6066909986.M