Tax Type
Individual Income Tax
Description
Terminate the accrual of interest on federal tax deficiencies.
Topic
Returns/Payments/Records
Date Issued
12-14-1982
December 14, 1982
Re: Request for Ruling/Individual Income Tax
Dear **************
This will reply to your correspondence of December 2, 1982 in which you request a ruling in regard to advance payment of State income tax and procedures related thereto.
FACTS
The tax returns of certain clients of *******and ********** are undergoing audit or examination by the Internal Revenue Service, which may result in these clients being assessed additional tax and interest thereon. In anticipation of such assessments, these clients desire to terminate the accrual of interest before the proposed liability is assessed by depositing with the department funds sufficient to cover their potential liability. Internal Revenue Procedure 82-51 permits such advance payments in order to terminate the accrual of interest on federal tax deficiencies.
********* specifically requests whether such a procedure is applicable under Virginia law and departmental regulations. Further, should such a Procedure be applicable for State tax purposes,
************** wishes to determine whether tax overpaid under such a plan would be refundable to the taxpayer.
RULING
§58-1118.1 of the Code of Virginia provides that an amended tax return may be filed within three years from the due date of the original return or within 60 days from the final determination of any change or correction in the liability of a taxpayer for federal tax purposes. Should a taxpayer desire to remit an advance payment of tax in anticipation of an assessment, he should file an amended income tax return and remit payment therewith. If the advance payment of tax results in an overpayment of one's tax liability, a request for the refund of overpaid tax will be honored if an amended tax return is filed within 3 years of the due date of the original return or 60 days of the final determination of any change in one's- federal return. Any such return should be accompanied by documentation from the Internal Revenue Service that a change or correction was made on the taxpayer's federal return.
If you have any further questions, please feel free to call on us.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner