Tax Type
Corporation Income Tax
Description
Statute of limitations for audit assessment
Topic
Statute of Limitations
Date Issued
08-26-1986
August 26, 1986
Re: §58.1-1821 Application: Corporation Income Tax
§58.1-104 Period for assessing additional tax
Dear ************************
This is in response to your letter of March 24, 1986, in which you protested an assessment of additional tax for 1981 and 1982. You point out that there is a typographical error in the 1980 assessment. However, the effect is insignificant because the error results in less than $0.50 difference in Virginia tax and the amounts are rounded to the nearest dollar.
You protest several adjustments that the auditor made to the foreign source income subtraction for 1981. Because the auditor was not furnished the necessary information he excluded unidentified interest income and estimated the expenses attributable to the remaining income. These adjustments appear to be reasonable and proper based on the limited information furnished to the auditor. Enclosed for your information is a recent ruling letter dated August 14, 1986, Public document No. 86-154, in which the application of expenses to the foreign source income subtraction is explained.
However, effective January 1, 1985, the General Assembly changed the period for assessing additional tax to three years from the date the tax was due and payable instead of the date the return was filed. Waivers were properly executed for 1980, therefore the assessment for 1980 was validly made. The waiver for 1981 was not executed until September 4, 1985, which is more than three years after April 15, 1982.
Accordingly, the assessment for 1981 will be abated. You will shortly receive an updated bill for the 1980 assessment which should be paid within 30 days to avoid the accrual of additional interest.
Sincerely,
W. H. Forst
Tax Commissioner
Related Documents
Rulings of the Tax Commissioner