VA P.D. 19-69 Individual Income Tax 2019-06-25

Can Virginia issue a 2013 income-tax refund claimed on a return filed after the three-year deadline because the taxpayer relied on an accountant?

Short answer: No. A Virginia overpayment may be refunded only if the Department discovers it or receives the taxpayer's written claim within three years after the original timely-return deadline. The 2013 return was due May 1, 2014, making May 1, 2017 the refund deadline. The taxpayer did not file until August 15, 2018. Virginia could use the late return to abate the earlier nonfiler assessment, but Va. Code § 58.1-499(D) barred payment of the resulting overpayment and gave the Department no discretion to extend the deadline. The taxpayer's lack of awareness and the accountant's failure to explain the limit did not change the result; responsibility for timely and accurate filing remained with the taxpayer.

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This page answers the general question as of 2019. Ezel answers yours, under current Virginia tax law, with citations.

Disclaimer: This is an official published Ruling of the Virginia Tax Commissioner (Virginia Department of Taxation), issued as a redacted public document. It is based on the specific facts the taxpayer presented and the law in effect when issued; different facts or later changes in the law can change the result, and another taxpayer should not assume it applies to their situation. Virginia's retail sales and use tax is administered by the Department, but many Virginia local taxes, including the business license (BPOL) tax, business tangible personal property tax, and machinery and tools tax, are administered by local commissioners of the revenue. This summary is informational only and is not legal or tax advice. Consult a licensed Virginia tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

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Plain-English summary

Virginia assessed a nonfiler for 2013. The taxpayer later filed the actual return, which showed an overpayment. The Department removed the assessment but refused to pay the refund because the return arrived after the statutory refund deadline. She argued that she did not know the rule and her accountant had not told her.

The refund remained barred. Virginia's three-year limit gave the Department no discretion, and reliance on a preparer did not shift filing responsibility away from the taxpayer.

The deadline calculation

Va. Code § 58.1-499(A) authorizes refunds of overpayments caused by withholding, estimated payments, or taxpayer error. Subsection (D) prohibits a refund unless the Department discovers the overpayment or receives the written claim within three years from the original timely-return deadline.

For the 2013 individual return:

Original due date: May 1, 2014
Refund-claim deadline: May 1, 2017
Actual filing date: August 15, 2018

The filing was more than a year late for refund purposes. It could establish that the earlier assessment should be abated, but it could not revive the expired refund claim.

Why the accountant argument failed

Virginia recognizes that taxpayers commonly rely on professionals, but Va. Code § 58.1-341 leaves the taxpayer responsible for ensuring that returns are filed and accurate. Not knowing the limitations period or not being advised by the accountant did not authorize the Department to disregard the statute.

What this means for you

A late original return can erase an assessment yet still lose the refund. Liability correction and refund timeliness are separate.
The clock starts from the statutory due date. Do not assume it starts when Virginia contacts you or when the return is eventually filed.
Preparer reliance does not extend the deadline. Track refund statutes independently.
Virginia described the rule as mandatory. The Department said it had no discretion to pay this claim.

Common questions

Q: Why did Virginia abate the assessment but keep the overpayment?

A: The return corrected the amount owed, but the separate three-year refund deadline had already expired.

Q: Could the accountant's mistake create an exception?

A: No. The ruling says the taxpayer remains responsible for timely filing even when using a professional.

Q: What was the last day to claim this 2013 refund?

A: May 1, 2017, three years after the May 1, 2014 original due date.

Citations and references

Va. Code § 58.1-499(A), (D) — overpayments and three-year refund limit
Va. Code § 58.1-341(A) — individual filing deadline and responsibility
Related Virginia rulings cited: P.D. 11-82, P.D. 12-93, P.D. 16-169

Source

Landing page: Virginia Laws, Rules & Decisions
Ruling: P.D. 19-69

Original ruling text

June 25, 2019

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will respond to your letter in which you seek a refund of the overpayment of individual income tax paid by * (the “Taxpayer”) for the taxable year ended December 31, 2013.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2013 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a return. The Department requested additional information in order to determine if the Taxpayer was taxable in Virginia. When a response was not received, the Department issued an assessment. Subsequently, the Taxpayer filed a 2013 Virginia individual income tax return claiming a refund. The Department abated the assessment, but denied the refund request because the return was filed beyond the statute of limitations for claiming a refund. The Taxpayer appeals, contending that the refund should be paid.

DETERMINATION

Statute of Limitations

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:

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 . . . .

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 2013 individual income tax return was May 1, 2014. As such, the return was required to be filed by May 1, 2017, in order to receive a refund for the 2013 taxable year. The Taxpayer’s original 2013 income tax return was not filed until August 15, 2018, well after the statute of limitations had expired.

Professional Tax Preparation

The Taxpayer claims that she was unaware of the statute of limitations and was not informed by her accountant. A taxpayer’s reliance on a tax professional to prepare income tax returns, while understandable, does not relieve the taxpayer of the responsibility for ensuring that the return is filed and the information reported on the return is accurate. See Virginia Code § 58.1-341, Public Document (P.D.) 11-82 (5/31/2011), P.D. 12-93 (6/8/2012), and P.D. 16-169 (8/29/2016).

CONCLUSION

The provisions of Virginia 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 cannot grant your request for refund of the overpayment of individual income tax for the taxable year ended December 31, 2013.

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/1980-C

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