Could Virginia excuse a refund claim filed several weeks after the three-year deadline because the taxpayer was traveling and unfamiliar with the law?

Subject

Department had no discretion to excuse late refund claim

Plain-English summary

Virginia denied the taxpayer's 2010 refund because her original return was filed after the three-year limitation period. The Department had no discretion to make an exception because she was traveling for work or did not know Virginia's deadline.

The ruling states that the 2010 return was due May 2, 2011 because May 1 fell on a Sunday. To receive a refund, the taxpayer had to file by May 2, 2014. She filed in June 2014 and reported an overpayment.

Va. Code § 58.1-499 D bars a refund when the Department does not discover the overpayment and the taxpayer's written application is not received within three years from the prescribed filing date. The Commissioner described that limit as clear and mandatory.

What this means for you

• A Virginia overpayment does not remain refundable indefinitely.
• The refund period runs from the prescribed return deadline, not from when the taxpayer learns about the rule.
• Personal circumstances such as work travel did not authorize the Department to extend this statutory deadline.

Common questions

Q: How late was the return?

A: It was filed in June 2014, several weeks after the May 2, 2014 deadline stated in the ruling.

Q: Did the Department dispute that there was an overpayment?

A: The ruling denied the refund because the claim was late; it does not identify a dispute over the reported overpayment amount.

Q: Could the Commissioner grant equitable relief?

A: No. The ruling says the statute provided no discretion in enforcing the three-year limit.

Citations and references

• Va. Code §§ 58.1-1821, 58.1-499 A and D, and 58.1-341 A.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 15-29

Original ruling text

February 24, 2015

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you request a refund of the overpayment of individual income tax paid by * (the "Taxpayer") for the taxable year ended December 31, 2010.

FACTS

The Taxpayer filed a 2010 Virginia individual income tax return in June 2014, reporting an overpayment of income tax and claiming a refund. The Department denied the refund because the return was filed beyond the refund period allowed by Virginia's statute of limitations. The Taxpayer appeals the Department's denial, contending that she was unfamiliar with Virginia law and missed the deadline by several weeks because she was travelling for work.

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 Department shall order a refund of the overpayment. Virginia Code § 58.1-499 D specifies, however, in pertinent part that:

No refund under this section . . . shall be made . . . 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 . . . [Emphasis added.]

Virginia Code § 58.1-341 A requires that a taxpayer file an individual income tax return by May 1 of the year following the tax year for which the return is filed. Based on Virginia statutes, the due date for the Taxpayer's 2010 individual income tax return was May 2, 2011 (May 1, 2011, was on a Sunday). As such, the return was required to be filed by May 2, 2014, in order to receive a refund for the 2010 taxable year.

The original 2010 Virginia income tax return was not filed until June 2014, after the statute of limitations had expired on May 2, 2014. The provisions of Va. Code § 58.1-499 D are clear and do not provide the Department with any discretion in enforcing the three-year limitations period to apply for a refund. Accordingly, I must deny your request for refund of the overpayment of individual income tax for the taxable year ended December 31, 2010.

The Code of Virginia sections 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/1-5840996670.M