Tax Type
Retail Sales and Use Tax
Description
Statute of limitations extended to six years
Topic
Statute of Limitations
Date Issued
09-08-1988
September 8, 1988
Re: Va. Code §58.1-1821 Application/Sales and Use Tax
Dear*********************
This will reply to your letter of June 6, 1988, seeking the correction of an assessment issued in the above referenced case for the period January 1982, through November 1987.
FACTS
************* ("The Taxpayer") is a wholesaler/retailer of produce. The Taxpayer contests the period of limitations that was applied to the audit including the interest and penalties assessed.
DETERMINATION
The Taxpayer contends that the Department should not have extended the audit beyond the three year period of limitations because the Taxpayer's registration for collection and remittance of sales tax was terminated in March of 1979. Prior to this time the Taxpayer was registered and the Taxpayer was audited by the Department in 1978, showing knowledge on the Taxpayer's behalf of registration requirements.
In addressing the statute of limitations for assessing sales and use tax, Va. Code §58.1 -634, states that:
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- The Tax Commissioner shall not examine any person's records beyond the three-year period of limitations unless he has reasonable evidence of fraud, or reasonable cause to believe that such person was required by law to file a return and failed to do so.
In this case, the Taxpayer failed to file any sales and use tax returns between March 1979 and the conclusion of the audit period. We can find no evidence that the Taxpayer's sales and use tax was terminated inadvertently, nor does the Taxpayer offer any such evidence. Moreover, even had an error been made, this does not relieve the Taxpayer from his responsibility for filing returns. Despite having been previously registered for collection and remittance of the tax, the Taxpayer made no inquiry as to why he no longer received returns, did not register until eight years later, and failed to file returns to the Commonwealth when tax was due.
Therefore, based on the facts of this case, I find that the six-year statute of limitations applied to the Taxpayer's assessment is proper. However, under the provisions of Va. Code §58.1 - 105, I agree to abate the penalty assessed. only will receive a corrected assessment.
If I can be of further assistance, please contact the Department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner