Could financial hardship excuse a 2007 Virginia refund return filed more than six months after the three-year deadline?

Plain-English summary

Virginia denied the 2007 refund because the original return was filed after the three-year deadline. The return was due May 1, 2008, and the refund claim had to be filed within three years of that due date.

Because May 1, 2011 fell on a Sunday, the final filing date was May 2, 2011. The taxpayer did not file until November 11, 2011.

The taxpayer cited timely filings for other years and current financial hardship. Virginia said it sympathized but had no statutory power to waive the refund limitation period on that basis.

Common questions

Q: Did financial hardship extend the refund deadline?
A: No. The Department said it was not empowered to waive the statute in this situation.

Q: What was the final filing date for this 2007 refund?
A: May 2, 2011.

Citations and references

• Va. Code § 58.1-499(A), (D).
• Va. Code § 58.1-341(A).

Subject

Failure to timely file a return

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 12-114

Original ruling text

July 19, 2012

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you request that the Department reconsider its denial of a Virginia individual income tax refund for * (the "Taxpayer") for the taxable year ended December 31, 2007. I apologize for the delay in responding

to your letter.

FACTS

The Taxpayer filed a 2007 Virginia income tax return on November 11, 2011. The Department denied the refund claimed on the return because it was filed beyond the statute of limitations. The Taxpayer appeals the denial, contending that all other taxable years were timely filed and she is currently experiencing a financial hardship.

DETERMINATION

Virginia Code § 58.1-499 A provides that in the case of any overpayment of any tax, whether by reason of excessive withholding, overestimating and overpaying estimated tax, or error on the part of the taxpayer, the Tax Commissioner shall order a refund of the overpayment. Under Va. Code § 58.1-499 D, however, the Department cannot issue a refund, "whether on discovery by the Department or on written application of the taxpayer, if such discovery is not made or such written application is not received within three years from the last day prescribed by law for the timely filing of the return."

Virginia Code § 58.1-341 A requires that a taxpayer file an individual income tax return by May 1 of the year following the taxable year for which the return is filed. In order to receive a refund, the Taxpayer's original return for the 2007 taxable year was required to be filed within three years of the due date, or by May 2, 2011 (May 1 fell on a Sunday). In this case, the Taxpayer filed an original 2007 income tax return on November 11, 2011, well after the expiration of the statute of limitations.

While I empathize with your situation, the Department is bound by the clear requirements under the law and is not empowered to waive the statute of limitations in this situation. Accordingly, I must deny the Taxpayer's request for refund for the 2007 taxable year.

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

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4962949680.D