Document Number
17-51
Tax Type
Corporation Income Tax
Description
Statute of Limitations
Topic
Federal Conformity
Statute of Limitations
Date Issued
04-06-2017

April 6, 2017

Re:    § 58.1-1821 Application:  Corporate Income Tax

Dear *****:

This will reply to your letter in which you seek a refund of corporate income tax paid by ***** (the “Taxpayer”) for the taxable years ended September 30, 2001, and 2007.

FACTS

The Taxpayer and the Internal Revenue Service (IRS) entered into settlement agreements regarding changes to the Taxpayer's federal income tax liability for the taxable years ended September 30, 2001, and 2007.  The Taxpayer filed amended Virginia corporate income tax returns to claim refunds resulting from the changes.  The Department denied the refunds because the returns were filed more than one year after the agreements were finalized.  The Taxpayer appeals, contending that the settlement resulted in numerous amended returns having to be filed with different filing deadlines, and it exercised reasonable care in attempting to file the returns on time.

DETERMINATION

The general rule is that an amended return must be filed within three years of the original or extended due date, as applicable, to claim a refund.  See Va. Code § 58.1­-1823.  Virginia Code § 58.1-1823, however, also includes a number of exceptions to the general rule when specific circumstances are present.

Specifically, Va. Code § 58.1-1823 A (ii) permits a taxpayer one year from the final determination of a federal change or correction to file an amended return to request a refund. Title 23 of the Virginia Administrative Code (VAC) 10-20-180 B 4 provides that a closing agreement entered into with the IRS under § 7121 of the Internal Revenue Code (IRC) constitutes a final determination for purposes of Va. Code § 58.1­-1823.  The final determination occurs when the taxpayer receives notice of the signing by the Commissioner of Internal Revenue.

The information provided indicates the Taxpayer was notified that the IRS had accepted the agreements for the taxable years ended September 30, 2001, and 2007, on January 27, 2015, and December 19, 2014, respectively.  The return for the taxable year ended September 30, 2001, however, was not filed until February 29, 2016.  The return for the taxable year ended September 30, 2007, was not filed until February 8, 2016.  In each case, the return was filed more than one year after the final determination date.

Virginia Code § 58.1-1823 is clear and does not provide the Department with any discretion in enforcing the limitations periods to file an amended return to claim a refund.  Accordingly, the Department must deny your request for refund of the overpayment of corporate income tax for the taxable years ended September 30, 2001, and 2007.

The Code of Virginia sections and regulation 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/1113.M

Rulings of the Tax Commissioner

Last Updated 10/02/2017 07:20