What administrative request fees did Virginia Tax Bulletin 17-5 announce effective July 1, 2017, and could taxpayers request a waiver?

Plain-English summary

Virginia Tax Bulletin 17-5 announced four administrative fees effective July 1, 2017:

• Offer in compromise based on doubtful collectability: $50
• Ruling letter: $275
• Local business tax advisory opinion: $275
• Corporate income tax filing-status change: $100

The fee had to accompany the request. A taxpayer could seek a waiver, but only if the Tax Commissioner found the charge created an unreasonable burden.

Filing-status requests

For a corporate filing-status change, the fee and form had to be submitted with the request before the return's due or extended due date. The bulletin said changes between separate and combined filing were generally granted, while changes to or from consolidated filing were generally denied absent extraordinary circumstances. The fee remained payable even if the request was denied.

Common questions

Were these fees optional? No. The 2017 bulletin said they were required with the covered request unless a waiver was granted.

Did paying the $100 filing-status fee guarantee approval? No.

Are these current fee amounts? The bulletin reports the amounts effective July 1, 2017; current requirements must be confirmed separately.

Citations and references

• Item 275 V, 2017 Appropriation Act, House Bill 1500, Chapter 836
• Va. Code §§ 58.1-105, 58.1-203, 58.1-3701, 58.1-3983.1, and 58.1-442

Subject

IMPORTANT INFORMATION REGARDING NEW ADMINISTRATIVE FEES

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 17-87

Original ruling text

TAX BULLETIN 17-5

Virginia Department of Taxation

June 7, 2017

IMPORTANT INFORMATION REGARDING

NEW ADMINISTRATIVE FEES

Item 275 V of the 2017 Appropriation Act (House Bill 1500, Chapter 836 of the 2017 Acts of Assembly ) requires the Department of Taxation (“the Department”) to impose fees for each request for an offer in compromise with respect to doubtful collectibility under Va. Code § 58.1-105; a letter ruling under Va. Code § 58.1-203; a local business tax advisory opinion under Va. Code §§ 58.1-3701 or 58.1-3983.1; and a corporate income tax filing status change request under Va. Code § 58.1-442. Such fees are effective July 1, 2017. The following chart shows the new fees:

Type of Request

Fee Amount

Offer in Compromise – Doubtful Collectibility

$50

Ruling Letter

$275

Local Business Tax Advisory Opinion

$275

Corporate Income Tax Filing Status Change

$100

Each fee must be paid at the time the request is made. For an offer in compromise with respect to doubtful collectibility, the payment must be attached to Form OIC-Fee and submitted with Form OIC I-3 and FIN I-1 (for individuals) or Form OIC B-3 and FIN B-1 (for businesses). For ruling letters and local business tax advisory opinions, the payment must be attached to Form Rulings-Fee and submitted with the ruling or advisory opinion request.

For a corporate income tax filing status change request, the payment must be attached to Form Filing Status-Fee and submitted with the request prior to the due date or extended due date of the return. Generally, the Department will grant requests to change an affiliated group’s filing status from separate to combined or from combined to separate. Requests to change to or from a consolidated filing status will generally be denied absent extraordinary circumstances. The administrative fee must be paid, even if the change in filing status is not granted.

Taxpayers may request waivers from these administrative fees. Waivers will be granted only if the Tax Commissioner finds that such fee creates an unreasonable burden on the person making the request. For further information, see the instructions on the relevant fee form.

Further Instructions

Form OIC-Fee, Form Rulings-Fee, and Form Filing Status-Fee will be available on the Department’s website, http://www.tax.virginia.gov , by July 1, 2017. If you have additional questions, please visit the Department’s website or contact the Department at (804) 367-8031 for individual income tax questions or (804) 367-8037 for corporate income tax questions.