When did the 2009 Virginia Tax Amnesty addendum say the 20% post-amnesty penalty would not apply to audit or appealed liabilities?

Subject

Addendum to the 2009 Virginia Tax Amnesty Guidelines

Plain-English summary

Virginia clarified four situations in which the 20% post-amnesty penalty would not apply to eligible liabilities. The addendum amended items 6 and 7 of Section VI of the September 28, 2009 guidelines and added items 9 and 10.

For a business's first field audit, the exception required no penalty on the deficiency, payment of uncontested liability within 30 days of assessment, and payment of any contested amount remaining after an administrative or court appeal within 30 days of the final determination.

The same payment conditions applied to a second or later field audit, with the additional requirement that the compliance ratio exceed 85% for sales tax and 60% for use tax.

The addendum also protected an amnesty-eligible bill being appealed in circuit court during the amnesty period if the taxpayer paid the liability finally determined by the circuit court or Supreme Court within 30 days of entry of the final order. Missing that deadline triggered the 20% penalty.

Finally, it added an exception for a Department audit or examination of a business or individual that did not require a visit to the home or business, again subject to the stated no-deficiency-penalty and timely-payment conditions.

Historical exception map

Common questions

Was this a ruling for one taxpayer?

No. It was a Department-issued addendum to the general 2009 amnesty guidelines.

Did every repeat audit qualify?

No. The addendum required compliance ratios above 85% for sales tax and 60% for use tax, along with the other stated conditions.

What happened if a court-determined liability was not paid within 30 days?

The addendum said the 20% penalty would be applied.

Citations and references

• Va. Code §§ 58.1-1821 and 58.1-1825.
• Virginia Public Document 09-140, the September 28, 2009 Virginia Tax Amnesty Guidelines amended by this addendum.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Guidelines addendum: P.D. 09-175

Original ruling text

Addendum to the 2009 Virginia Tax Amnesty Guidelines

October 29, 2009

On September 28, 2009, the Virginia Department of Taxation issued guidelines for the 2009 Virginia Tax Amnesty program (Public Document 09-140). These guidelines contained information regarding the 20 percent post-Amnesty penalty, as well as described certain situations in which the penalty would not apply. It has become clear, however, that further clarification of these situations is required. Therefore, Section VI, numbers 6 and 7 are amended as follows:

6. Any assessment generated from a field audit of a business for an amnesty eligible period, provided that the audit is TAX’s first audit of the taxpayer, no penalty has been applied to the tax deficiency, any uncontested liability is paid within 30 days from the date of assessment, and payment for any contested liability remaining upon resolution of an appeal under Va. Code §§ 58.1-1821 or 58.1-1825 is paid within 30 days from the date of the Tax Commissioner’s or the court’s final determination.

7. Any assessment generated from a field audit of a business for an amnesty eligible period in cases where the audit is a second or subsequent audit of the taxpayer, provided that the Compliance Ratio is greater than 85 percent for sales tax and greater than 60 percent for use tax, no penalty has been applied to the tax deficiency, any uncontested liability is paid within 30 days from the date of assessment, and payment for any contested liability remaining upon resolution of an appeal under Va. Code §§ 58.1-1821 or 58.1-1825 is paid within 30 days from the date of the Tax Commissioner’s or the court’s final determination.

In addition, Section VI is clarified with the addition of the following items to which the 20 percent penalty will not be applied:

9. Any amnesty eligible bill that is being appealed under Va. Code § 58.1-1825 during the amnesty period, provided the taxpayer pays the liability as determined by the circuit court or, if there is an appeal therefrom, the Supreme Court, within 30 days of the date of entry of the final order making that determination. If the taxpayer fails to satisfy the remaining liability within the 30 day period, the 20 percent penalty will be applied.

10. Any assessment generated from an audit or examination of a business or individual performed by TAX that does not require a visit to the residence or business for an amnesty eligible period, provided that no penalty has been applied to the tax deficiency, any uncontested liability is paid within 30 days from the date of assessment, and payment for any contested liability remaining upon resolution of an appeal under Va. Code §§ 58.1-1821 or 58.1-1825 is paid within 30 days from the date of the Tax Commissioner’s or the court’s final determination.

Approved:

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Janie E. Bowen
Tax Commissioner