Tax Type
Estate Tax
Description
Statute of limitations for refunds
Topic
Payment and Refund
Statute of Limitations
Date Issued
10-09-1990
October 9, 1990
Re: Request for Ruling - Refund of Virginia Estate Tax
Dear *****************
This is in response to your letter of April 11, 1990 in which you requested a ruling that the above-named estate remain open for the next 13 years for the purpose of filing refund claims with the Commonwealth of Virginia.
Facts
The Internal Revenue Service has accepted the estate's election to pay the federal estate tax over the next 13 years, pursuant to Internal Revenue Code §6166. During that time, the estate expects to pay additional interest and other expenses that will be claimed as additional expenses of administration of the estate under procedures established by the IRS. This will result in a lower federal taxable estate and, consequently, a lower credit for state death taxes. The lower credit for state death taxes will result in the overpayment of Virginia estate tax previously paid. You request a ruling that the estate remain open for the next 13 years for the purpose of filing refund claims with Virginia based on the adjustment of the federal taxable estate and state death tax credit with respect to payment of interest and other expenses of administration.
Discussion
The amount of the federal taxable estate determines the amount of the credit for state death taxes. The amount of the estate tax due Virginia is based on the maximum amount of the credit for state death taxes allowable under §2011 of the Internal Revenue Code.
Because the Internal Revenue Service has accepted the estate's election to remain open for 13 years, the amount of the federal taxable estate will be reduced as additional administrative expense deductions are allowed by the IRS, reducing the amount of estate tax due Virginia.
In Virginia, the method for claiming a refund for taxes previously paid is the filing of an amended return. VR §630-7-906 provides that amended returns for the refund of estate tax must be filed according to the provisions of Va. Code §58.1-1823.
Under Va. Code §58.1-1823 an amended return claiming a refund must be filed within three years of the due date of the original return or, if later, within 60 days of the final determination of a change in federal tax liability as defined in VR §630-1-1823 (copy enclosed). In this case, the three year period from the original due date has expired.
Accordingly, in order for the estate to claim a refund, an amended return claiming a refund of Virginia estate taxes paid must be filed no later than 60 days after the final determination of any change or correction in the federal taxable estate and credit for state death taxes. The representative of the estate must attach to the amended Virginia return a statement explaining the changes made and the reasons for the changes and furnish a copy of the IRS amended closing letter or other appropriate notice that the change in federal tax liability shown on federal form 843, an amended form 906, or similar form has been accepted by the IRS. At that time, the department will evaluate the evidence furnished and determine if it should reassess the estate and refund any overpayment.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner