Could an individual appeal a Virginia converted assessment more than a year after the 90-day deadline because he learned of the tax lien later?

Subject

Taxpayer was required to file an administrative appeal within 90 days

Plain-English summary

Virginia dismissed the appeal because it was filed well after the 90-day deadline. The Department issued the converted assessments on April 6, 2006, so the individual had until July 5, 2006 to seek relief under Va. Code § 58.1-1821. His appeal was dated June 29, 2007.

The individual argued for an exception because he did not know about the Department's collection action and recorded lien. The Commissioner found no exception in the statute or the Department's administrative appeal guidelines for learning of the lien later.

Because the application was time-barred, the Commissioner did not resolve the individual's claim that the corporation's assets and withholding-tax funds had been illegally seized. The lien remained effective until the delinquent liabilities were satisfied.

What this means for you

• Calculate Virginia's administrative appeal deadline from the assessment date, not from later collection activity.
• A recorded lien or later awareness of collection does not restart the statutory period under this ruling.
• File a complete, timely appeal even when related disputes over corporate assets remain unresolved.
• Missing the deadline can prevent the Tax Commissioner from reaching the merits.

Common questions

Q: When did the 90-day period begin?
A: It ran from the April 6, 2006 assessment date, with a stated deadline of July 5, 2006.

Q: Did late notice of the lien excuse the filing delay?
A: No. The Commissioner found no applicable statutory or guideline exception.

Q: Did the ruling decide whether the corporation's funds were illegally seized?
A: No. The appeal was dismissed as untimely before that issue could be decided.

Citations and references

• Va. Code §§ 58.1-1813 and 58.1-1821.
• P.D. 06-140.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-68

Original ruling text

May 22, 2008

Re: § 58.1-1821 Application: Corporate Officer Liability

Dear *:

This will reply to your letter in which you seek correction of converted

assessments issued to * (the "Taxpayer").

FACTS

The Department issued numerous assessments to the * (the "Corporation") for withholding tax, sales and use tax, litter tax and tire tax for liabilities owed for the taxable periods January 2004 through March 2005. In April 2006, when the Corporation failed to pay the deficiencies, the Department assessed the Taxpayer penalties in the amount of the taxes, penalties and interest owed by the Corporation pursuant to Va. Code § 58.1-1813. In order to collect the penalty, the Department recorded a memorandum of lien with the circuit court in *** (the "County") in June 2006.

By letter dated June 29, 2007, the Taxpayer contests the assessments with regard to the converted withholding tax. He asserts that the Corporation's assets, including the withholding tax, were illegally seized in 2004. The Taxpayer states that he intended to pay the taxes withheld to the Department, but he was unable to until he obtained the illegally seized funds. He requests that the Department accept his appeal and the memorandum of lien be released pending the resolution of the issues with the Corporation.

DETERMINATION

Virginia Code § 58.1-1821 provides that "[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner." [Emphasis added.] In this case, the penalties for the Corporation's liabilities were assessed against the Taxpayer on April 6, 2006. The Taxpayer was required to file an administrative appeal within 90 days after this assessment date, or by July 5, 2006.

The Taxpayer's administrative appeal is dated June 29, 2007, well after the 90-day limitations period. The Taxpayer asserts that he filed his appeal as soon as he knew of the memorandum of lien. He believes that he should be granted an exception to the 90-day rule because he was not aware of the collection action taken by the Department. Neither the statute nor the Administrative Appeal Guidelines for Tax Assessments Issued by the Virginia Department of Taxation provides an exception for such circumstances. See Public Document (P.D.) 06-140 (11/29/2006). Therefore, the Taxpayer's application for correction pursuant to Va. Code § 58.1-1821 is barred by the statute of limitations, and the memorandum of lien will remain in full effect until the Taxpayer satisfies the delinquent liabilities due to the Commonwealth.

The Code of Virginia section cited and other reference documents are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions about this response, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Janie E. Bowen

Tax Commissioner

AR/1-1628435504.B