December 13, 2024
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.) 24-28 (3/10/2024).
FACTS
In P.D. 24-28, the Department found that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2019 taxable year. The Taxpayer has cited six prior cases in which the Department determined that taxpayers abandoned their Virginia domicile. The Taxpayer seeks a reconsideration of P.D. 24-28, asserting that the Department’s determination was incorrect.
DETERMINATION
Title 23 of the Virginia Administrative Code (VAC) 10-20-165 F provides that a taxpayer who disagrees with the Department’s final determination issued pursuant to Virginia Code § 58.1-1822 may request a reconsideration of the determination. In order to grant a request for reconsideration, the Department must receive the request no later than 45 days after the date of the determination letter, and a taxpayer must meet one of four specific requirements set forth in that section:
1. The facts upon which the original determination is based are misstated by the Tax Commissioner or are inaccurate, and the determination would have a different result based on a correction of the Tax Commissioner’s misstatement of the facts presented or a clarification of the original facts presented in the taxpayer’s administrative appeal;
2. The law upon which the original determination is based has been changed by legislation, court decision, or other authority effective for the tax period(s) at issue;
3. The policy upon which the original determination is based is misapplied, and the determination would have a different result based on the application of the proper policy; or
4. The taxpayer has discovered additional evidence or documentation that was not available to the taxpayer at the time the original administrative appeal was filed with the Department, and the additional evidence or documentation could produce a result different from the original determination.
In this case, none of the reconsideration requirements have been satisfied. The Taxpayer should be aware that the Department interprets the third criterion to mean that the Department has not applied the correct law to the case. Here, there is no dispute that the law of domicile applies, and this was the law that the Department applied to the facts in P.D. 24-28. The Taxpayer simply believes that the Department reached the incorrect result. If the Department were to interpret the third criterion in that manner, there would be no reason to have criteria. Every taxpayer who asks for a reconsideration could simply say that the Department “misapplied” policy by not arriving at the result the taxpayer was seeking. See P.D. 20-188 (11/10/2020) and P.D. 23-83 (7/13/2023). In addition, specific reconsideration criteria are in place to ensure an economical administrative appeals process. The time for a taxpayer to compare and contrast past cases is when they first submit their appeal to the Department, not after they receive an adverse appeal determination.
While the Department recognizes the Taxpayer’s disagreement with its determination in P.D. 24-28, he has failed to meet the requirements for a reconsideration. Consequently, P.D. 24-28 constitutes the Department’s final determination in this matter.
The assessment, therefore, is upheld. An updated bill will be issued to the Taxpayer shortly, which will include accrued interest to date. The Taxpayer should remit the balance due upon receipt to avoid the accrual of additional interest and possible collections actions.
The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public documents cited are available at 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 and Legislative Affairs, Tax Adjudication and Resolution Division, at (***) ***** or email at *****@tax.virginia.gov.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia