May 16, 2024
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 “Taxpayer”) for the taxable year ended December 31, 2019.
FACTS
The Taxpayer filed a 2019 Virginia individual income tax return on June 26, 2023, requesting a refund of the overpayment of income tax. The Department denied the request because the return was filed beyond the refund period allowed by the statute of limitations. The Taxpayer filed an application for correction, contending that the Department had extended the filing deadline to November 2, 2020, and she had three years from this date to claim the refund. The Taxpayer also asserts that the Department should take into account extenuating circumstances that led her to file a late return.
DETERMINATION
Statute of Limitations
Virginia Code § 58.1-499 A provides that, in the case of any overpayment of any tax, whether by reason of excessive withholding, overestimating and overpaying estimated tax, or error on the part of the taxpayer, the Department shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part that:
No refund under this section . . . shall be made . . . whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return . . . [Emphasis added].
Virginia Code § 58.1-341 A requires that taxpayers file individual income tax returns by May 1 of the year following the taxable year for which the return is filed. Taxpayers are allowed to elect to take a six month extension to file their returns. In order to elect an extension, a taxpayer must (i) file the return within the extended period, and (ii) on or before the original due date for the filing of the return, pay the full amount properly estimated as the balance of the tax due for the taxable year. See Virginia Code § 58.1-344. If the taxpayer intends to take the extension but then does not file a return or pay the full amount of the tax due by the extended due date, the taxpayer is treated as if no extension had been granted. See Public Document (P.D.) 10-238 (9/30/2010).
When an original return has been filed after the extended due date, the taxpayer has from three years after the original due date to file an amended return. This is because Virginia Code § 58.1-344 A permits an individual to elect “an extension of time within which to file the income tax return . . . .” If a taxpayer has not filed an original return by the extended due date, a valid election to extend the due date has not been made. In such cases, the extension is negated and the last day allowed for the timely filing of the return reverts to the original due date of such return, usually May 1 of the year following the end of the taxable year.
Web Site Information
The Taxpayer contends that her refund claim was timely filed because the Department extended the due date for filing a 2019 income tax return to November 2, 2020. The Taxpayer refers to statements on the Department’s web site indicating the extension was automatic and no application was required to obtain it.
The information provided on the Department’s website is intended to provide helpful guidance to taxpayers. It is not intended to provide a detailed explanation of every provision or nuance of Virginia’s tax law. Even though the extension is “automatic” in that the taxpayer does not have to submit a separate application for it, the taxpayer must nevertheless elect it by (i) filing the return within the extended due date, and (ii) on or before the original due date for the filing of the return, paying the full amount properly estimated as the balance of the tax due for the taxable year. See Virginia Code § 58.1-344, P.D. 10-238 (9/30/2010), and P.D. 15-199 (10/19/2015).
Extenuating Circumstances
The Taxpayer states that there were other circumstances, including the death of her spouse in 2017 and the pandemic, which contributed to her delay in filing the return. Such circumstances, however, would not have extended the applicable filing deadlines or otherwise have affected the statute of limitations. See P.D. 22-9 (1/18/2022).
CONCLUSION
Because the Taxpayer failed to file her 2019 return before the extended due date in accordance with Virginia Code § 58.1-344, she only had three years from the original due date, May 1, 2020, in which to file a timely request for refund. The statute of limitations for filing a return claiming a refund for the 2019 taxable year expired the day after May 1, 2023. The Taxpayer’s 2019 income tax return was filed on June 26, 2023, well after the statute of limitations had expired.
The provisions of Virginia Code § 58.1-499 D are clear and do not provide the Department with any discretion in enforcing the three-year limitations period to apply for a refund. This is true regardless of any extenuating circumstances that may have resulted in a late filing. Accordingly, your request for the refund of the overpayment of individual income tax for the taxable year ended December 31, 2019, cannot be granted.
The Code of Virginia sections, tax bulletin, and public documents 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,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR/4695.X