August 10, 2021
Re: § 58.1-1821 Appeal: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the individual income tax assessment issued to ***** (the “Taxpayer”) for the taxable year ended December 31, 2017.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return. Because no return was on file, the Department requested additional information from the Taxpayer to determine if she was required to file a return and pay Virginia income tax. When no response was received, the Department issued an assessment based upon the best information available. The Taxpayer appeals, contending that the income attributed to her must be incorrect because the tax due on the assessment was much greater than what she normally owes.
DETERMINATION
Virginia Code § 58.1-341 provides that a Virginia resident who is required to file a federal income tax return is also required to file a Virginia income tax return, unless the resident is exempt from filing under Virginia Code § 58.1-321. Additionally, even if a resident is not required to file a federal return but has Virginia adjusted gross income that exceeds the filing threshold, the resident is required to file a Virginia individual income tax return. When a resident does not file a proper Virginia return, Internal Revenue Code (IRC) § 6103(d) authorizes the Department to obtain information from the IRS that will enable the Department to determine the resident’s tax liability.
The Taxpayer states that her 2017 return was filed late, but the Department has never received a such a return from the Taxpayer. The IRS information available to the Department indicates that the Taxpayer received a Form 1099 from ***** listing $***** of non-employee compensation income and a 1099 from ***** for $***** of interest income, for a total income of $*****.
The assessment at issue was made based upon the best information available to the Department pursuant to Virginia Code § 58.1-111. If either of the 1099s is incorrect, the Taxpayer must address that matter with the entity that issued the 1099 and obtain a corrected form. The Taxpayer should also file a Virginia individual income tax return for the 2017 taxable year and provide any necessary supporting documentation, including any corrected 1099 form she may be able to obtain.
The return should be submitted within 60 days from the from the date of this letter to: Virginia Department of Taxation, Office of Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****. Upon receipt, the return will be reviewed and the assessment will be adjusted, as appropriate. If the return is not received within the allotted time, the assessment will be considered correct as issued.
The Code of Virginia sections cited are available online at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s website. 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/3639-C