I think a circuit court improperly assessed fines and costs against me for a traffic conviction -- can I appeal that to the Virginia Department of Taxation?

Plain-English summary

A taxpayer was found guilty of a traffic infraction in a Virginia circuit court, and the court entered a judgment for fines and costs. When the county later filed a claim with the Department to set off (offset) any state tax refund owed to the taxpayer against that court debt, the taxpayer instead filed an appeal directly with the Department of Taxation -- arguing the court had failed to properly deliver the conviction and hadn't given him notice of the fines and fees due.

The Department's answer was a jurisdictional one: it simply doesn't have the authority to hear this kind of appeal. Va. Code § 58.1-1821 gives the Department appeals jurisdiction over taxes it administers on behalf of the Commonwealth, plus certain local business (BPOL) and business/mobile property tax assessments. Court fines and costs from a criminal or traffic conviction aren't on that list.

Where the confusion likely comes from: Virginia courts can refer delinquent fines and costs to the Department's court debt collection section, and the Department is authorized under Va. Code § 19.2-349 to collect those amounts using the SAME procedures it uses to collect taxes under Title 58.1 -- including, potentially, offsetting the taxpayer's state income tax refund under the Setoff Debt Collection Act (Va. Code § 58.1-520 et seq.). But performing tax-style COLLECTION on behalf of a court doesn't convert the court's fines and fees into an actual "tax" that can be appealed to the Department. Any adjustment to the underlying debt -- disputing the conviction, the judgment, or how it was delivered -- has to be pursued with the court itself (through the clerk's office) or through legal counsel, not through a Department of Taxation appeal.

What this means for you

Anyone disputing a court fine, cost, or judgment that shows up on a tax-refund setoff notice

Don't file an appeal of the underlying fine or judgment with the Department of Taxation -- it has no authority over that. The Department's only role, if any, is collecting the already-final court debt (potentially by offsetting your state refund); to dispute the debt itself, go back to the court clerk's office or consult an attorney.

Anyone confused about why a court debt collection notice references tax law

The Department is authorized to use Title 58.1 tax-collection tools (like refund setoff) to collect delinquent court debt on a court's behalf. That's purely a collection MECHANISM -- it doesn't change the legal nature of the underlying debt or give the Department any power to reconsider the court's decision.

Common questions

Q: Can I appeal a court's traffic-fine judgment to the Virginia Department of Taxation?
A: No. The Department's appeals jurisdiction is limited to taxes it administers plus certain local business tax assessments -- it has no authority over court-imposed fines and costs.

Q: Why is the Department involved in collecting my court fines at all?
A: Virginia courts may refer delinquent fines and costs to the Department for collection, and the Department is authorized to use the same tools it uses for tax collection (including setting off a state refund) -- but this is a collection role, not a review role.

Q: If I think my refund was wrongly offset against a court debt, where should I raise that?
A: With the court itself (its clerk's office) or with legal counsel -- the Department cannot adjust or reconsider the underlying court judgment.

Citations and references

• Va. Code § 58.1-1821 (Department's appeals jurisdiction over Department-administered taxes and certain local business/property tax assessments)
• Va. Code § 19.2-349 (authorizes the Department to collect delinquent court fines and costs using Title 58.1 tax collection procedures)
• Va. Code § 58.1-520 et seq. (Setoff Debt Collection Act; a state tax refund may be used to offset a debt owed to another claimant agency, including a court)
• P.D. 06-42 (4/10/2006) (prior ruling on the Department's court-debt collection/setoff role)

Subject

Administration : Appeals - Court Fines and Costs

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 21-145

Original ruling text

November 16, 2021

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will respond to your letter in which * (the “Taxpayer”) seeks correction of fines and costs from a traffic infraction conviction in *** (the “County”).

FACTS

Publicly available court records indicate that the Taxpayer was found guilty of a traffic infraction in the County’s circuit court and a judgment was entered for fines and costs. After the County filed a claim for a refund set off with the Department, the Taxpayer filed an appeal with the Department, arguing that the court failed to lawfully deliver a conviction and failed to deliver a judgment or notice of penalties, fees or fines due.

DETERMINATION

Under Virginia Code § 58.1-1821, the Department has appeals jurisdiction over taxes the Department administers on behalf of the Commonwealth. The Department also has appeals jurisdiction over local business, professional and occupational license (BPOL) tax assessments and certain local business and mobile property tax assessments. See Virginia Code § 58.1-3703.1 and 58.1-3983.1. The Department has no appeals jurisdiction over the imposition of court fines and costs.

The Taxpayer should be aware that delinquent fines and costs issued by Virginia courts for criminal and civic offenses may be sent to the Department’s court debt collection section for collection under the authority granted by Virginia Code § 19.2-349. This section merely collects these amounts on behalf of the Virginia court system. Such delinquent judgments are subject to the tax collection provisions of Title 58.1 of the Code of Virginia . See Virginia Code § 19.2-349 D. As such, they may be subject to collection under the Setoff Debt Collection Act, Virginia Code § 58.1-520 et seq ., whereby a taxpayer’s Virginia individual income tax refund may be used to offset a debt the taxpayer owes to another claimant agency, which may include a Virginia court. See also Public Document (P.D.) 06-42 (4/10/2006). In this case, however, it does not appear that the Taxpayer has had any such refunds withheld to date.

Although the Department is given authority under Virginia Code § 19.2-349 to collect delinquent court fines and fees using the same tax collection procedures described under Title 58.1, this does not convert court fines and fees into a “tax” for purposes of appealing the fines and fees to the Department. Any adjustment to the underlying debt would have to be performed by the claimant agency, i.e. , the court in this case.

Accordingly, the Department has no jurisdiction over the Taxpayer’s appeal. If you believe that the County circuit court has improperly assessed fines and costs, I suggest that you raise the issue with the court Clerk’s office or consult legal counsel regarding any other available options you may have.

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 call * at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/3858.B

Related Documents

06-42