Tax Type
Individual Income Tax
Description
Illegal gambling operation; IRS audit adjustments
Topic
Taxable Income
Date Issued
02-11-1991
February 11, 1991
Re: §58.1-1821 Application; Individual Income Tax
Dear******************
This will reply to your letter of January 14, 1991, in which you seek correction of an individual income tax assessment for ************** (the "Taxpayer").
FACTS
The taxpayer, a Virginia resident, was arrested in 1986 and charged with promoting an illegal gambling operation. A substantial amount of cash was seized when the arrest was made. The department estimated and assessed income tax and penalties against the taxpayer for 1986, based on the best information available at the time as to the unreported income from his illegal gambling operation.
Subsequently, the IRS concluded an audit of the taxpayer and determined that there was unreported income for 1986. However, the amount of unreported income determined by the IRS is significantly less than the amount estimated and assessed by the department.
DETERMINATION
Accordingly, the department's assessment of tax is revised to reflect the income figures as determined by the IRS audit. Enclosed is a computation of the additional Virginia tax, penalty and interest due, based on the IRS information. This amount should be paid within the next 30 days to avoid the accrual of additional interest.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner