May 2, 2018
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek a refund of individual income tax paid by ***** (the “Taxpayers”) for the taxable year ended December 31, 2013. I apologize for the delay in responding to your request.
FACTS
The Taxpayers were audited by the Internal Revenue Service (IRS) for the 2013 taxable year, and the IRS notified the Department of adjustments it made to the Taxpayer's federal income tax return. When the Taxpayers failed to file an amended Virginia income tax return reflecting the IRS adjustments, the Department issued an assessment based on the IRS information. The Taxpayers filed an appeal, contending they do not understand why an assessment was issued.
DETERMINATION
Virginia Code § 58.1-311 requires any individual to report a change or correction in federal taxable income within one year of the final determination of such change or correction by filing an amended return with the Department. If the taxpayer fails to file an amended return reflecting the federal adjustment, Virginia Code § 58.1-312 A 3 permits the Department to assess the appropriate tax at any time.
Where the IRS has audited the federal taxable income of a taxpayer, the Department does not look behind the IRS's final determination. See Public Document (P.D.) 11-107 (6/14/2001). The Department issued a letter dated February 10, 2017, copy enclosed, notifying the Taxpayers of the change. When no response was received, the Department adjusted the taxpayers’ 2013 return based on the federal information available from the IRS as permitted by Virginia statute. The Taxpayers have not provided an explanation or any supporting documentation to prove the federal information is incorrect. Accordingly, there is no basis to revise the assessment and the Taxpayers' request for a refund of Virginia income tax paid cannot be granted.
The Code of Virginia sections and public document 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/1252.B