Tax Type
Individual Income Tax
Description
Statute of limitations; Foreign source income
Topic
Statute of Limitations
Date Issued
02-09-1987
February 9, 1987
Re: Virginia Code §58.1-1821 Application
Individual Income Tax
Dear***************
This is in reply to your letter of September 29, 1986 in which you petition on behalf of your clients for waiver of the statute of limitations for filing amended returns claiming a refund. Specifically, you request that the department accept amended returns for taxable years 1978, 1979, 1980 and 1981. These returns were filed in order to claim a subtraction from federal adjusted gross income for foreign source income.
The subtraction from federal adjusted gross income, allowed under Virginia Code §58.1-322 C. 7., for foreign source income was originally enacted by the 1981 session of the Virginia General Assembly. This legislation (1981 Acts of Assembly, Chapter 402, Senate Bill 641) provided in its enactment clause that it "shall be effective for taxable years beginning on and after January one, nineteen hundred eighty-one." Therefore, there is no statutory authority for allowing a subtraction from federal adjusted gross income for foreign source income for taxable years beginning prior to January 1, 1981. Accordingly, there is no basis to amend your client's returns for taxable years 1978, 1979 and 1980.
Even though the foreign source income subtraction was first allowable in taxable years beginning on and after January 1, 1981, Virginia Code §58.1-1823 specifically limits the time in which an amended return can be accepted and a refund issued. This section provides that:
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- Any person filing a tax return required for any tax administered by the Department of Taxation may, within three years from the last day prescribed by law for the timely filing of the return, or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, whichever is later, file an amended return with the Department.
- Any person filing a tax return required for any tax administered by the Department of Taxation may, within three years from the last day prescribed by law for the timely filing of the return, or within sixty days from the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, whichever is later, file an amended return with the Department.
For the above reasons, I must reject your client's claims for refunds for taxable years 1978, 1979, 1980 and 1981.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner