Could a taxpayer receive Virginia's 2009 amnesty benefits for old liabilities when the required returns were not filed by December 5, 2009?

Subject

Taxpayer had not filed returns by December 5, 2009, the Taxpayer was not eligible for amnesty.

Plain-English summary

Virginia had assessed the taxpayer for unfiled individual income-tax returns from 1993 and 1995-1999, with other older assessments and responsible-officer withholding liabilities also outstanding. He filed several returns in 2015 and asked to use Virginia's 2009 amnesty program.

The amnesty ran from October 7 through December 5, 2009. A taxpayer had to file all relevant returns and supporting documents and pay the eligible liability during that period. In exchange, Virginia waived all penalty and half the interest.

Because the taxpayer had not filed the required returns by December 5, 2009, he did not qualify. The later 2015 filings could replace estimated liabilities with return-based assessments, but could not reopen the expired amnesty program.

The outstanding assessments remained due and payable. The ruling also noted that eligible but unpaid liabilities after amnesty were subject to an additional 20% post-amnesty penalty on unpaid tax.

Common questions

Could filing the old returns in 2015 retroactively qualify for 2009 amnesty? No. The program's filing and payment deadline had expired.

What relief did 2009 amnesty offer? Payment of the tax and half the interest in exchange for waiver of the remaining interest and all penalty.

Citations and references

• Va. Code § 58.1-1840.1 D 2.
• P.D. 09-140.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 15-250

Original ruling text

December 23, 2015

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek relief relating to various individual income tax and withholding tax assessments issued to * (the "Taxpayer").

FACTS

The Department issued income tax assessments to the Taxpayer for failure to file Virginia income tax returns for the 1993, and 1995 through 1999 taxable years. The Taxpayer filed the returns in 2015. The Department abated the estimated liabilities and issued assessments based on the filed returns. Assessments for the 1988, 1990 and 1992 taxable years also remain outstanding. In addition, the Department converted several assessments to the Taxpayer from a business in which he was the responsible officer. The Taxpayer filed an appeal, contending he was advised to request amnesty to settle the outstanding tax liabilities.

DETERMINATION

Under Va. Code § 58.1-1840.1 D 2, amnesty allowed a taxpayer to satisfy his or her state tax liability by paying off the entire tax liability and one-half of the interest due. In exchange, the balance of the interest and the entire penalty would be waived. The amnesty program ran for a 60-day period beginning October 7, 2009 and ending December 5, 2009. In order to receive the amnesty benefits, taxpayers were required to file all relevant tax returns and associated documentation, such as statements of income, W-2's, etc., as would have been required if the return had been filed timely and properly by December 5, 2009.

At the conclusion of Amnesty, any tax liability that was eligible for amnesty benefits, but remained unpaid, was subject to a 20% post-amnesty penalty. The penalty applied to unpaid taxes only, not to outstanding balances of penalties or interest. The 20% amnesty penalty was in addition to all other penalties. See Public Document (P.D.) 09-140 (9/28/2009). Because he had not filed the returns by December 5, 2009, the Taxpayer was not eligible for amnesty. As such, the Taxpayer's request cannot be granted. The outstanding assessments remain due and payable.

The Code of Virginia sections, and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. 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/1-6155775437.D