March 29, 2024
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply 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, 2019.
FACTS
The Taxpayer filed an amended 2019 Virginia individual income tax return. The Internal Revenue Service (IRS) subsequently adjusted the Taxpayer’s federal adjusted gross income (FAGI) for that year. Based on this adjustment, the Department issued an assessment for additional tax due. The Taxpayer filed an appeal, contending that the IRS’s adjustment of her income is being challenged in the federal tax court and a decision has not yet been 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. 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 (6/14/2011).
The Department adjusted the Taxpayer’s return based on the federal information available from the IRS as permitted by Virginia statute. The amount of the adjustment was confirmed by means of an IRS account transcript. As such, the assessment is correct. If the federal tax court determines that the Taxpayer’s FAGI for the 2019 taxable year was different than what was reported to the Department by the IRS, she will be permitted to file an amended return to correct her liability pursuant to Virginia Code § 58.1-311 and Virginia Code § 58.1-1823.
The Taxpayer will receive an updated bill that will include accrued interest to date. The Taxpayer should remit the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collection actions.
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 (804) *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4540.B