Does filing a "notice of intent to appeal" a Virginia tax assessment pause or extend the 90-day appeal deadline?

Plain-English summary

A husband and wife filed a Virginia part-year resident return for 2018 (allocating the husband's income to his period of nonresidency and claiming retirement-income subtractions) and a resident return for 2019 (claiming subtractions for out-of-state military income and foreign earned income). Under audit, the Department disallowed the subtractions, decided the couple didn't actually qualify as part-year residents for 2018, and issued assessments for both years, dated March 12, 2021. (A related 2017 assessment was separately abated after the couple filed an amended return, so it's not part of this ruling.)

The couple's accountant filed a "notice of intent to appeal" on April 9, 2021 -- 28 days after the assessment date, comfortably within Virginia's 90-day window to apply for correction under Va. Code § 58.1-1821. But Virginia strictly enforces that 90-day deadline for a COMPLETE appeal, and a mere notice of intent doesn't satisfy or extend it. The couple's actual complete appeal wasn't filed until March 22, 2022 -- more than 11 months after the assessment date, and roughly 9 months after the true June 10, 2021 deadline. Because the complete appeal came in well after the 90-day period had run, the Department found the entire application barred by the statute of limitations, without ever reaching whether the husband was actually a Virginia resident during those years.

What this means for you

Anyone (or their accountant) planning to appeal a Virginia tax assessment

Calendar the 90-day deadline from the assessment date itself, and make sure your COMPLETE appeal -- not just a notice that you intend to appeal -- is filed within that window. A notice of intent can feel like you've "started the clock protection," but under Virginia's regulations it does nothing to pause or extend the actual deadline.

Accountants and tax professionals handling client appeals

If you file a placeholder notice of intent to preserve a client's options while gathering documentation, don't let it substitute for filing the real, complete appeal. Track the 90-day deadline independently and file the complete appeal well before it expires, regardless of when the notice of intent went in.

Taxpayers with a strong substantive argument (like a residency dispute) but a late appeal

The merits of your underlying argument won't be reached if the appeal itself is untimely. This ruling never addressed whether the husband was really a Virginia resident -- the case was decided entirely on the missed deadline.

Common questions

Q: Does filing a "notice of intent to appeal" extend Virginia's 90-day appeal deadline?
A: No. Per 23 VAC 10-20-165 B, a notice of intent to appeal does not satisfy or extend the 90-day limitations period for filing a complete appeal.

Q: From what date does the 90-day appeal deadline run?
A: From the date of the assessment itself (deemed made when written notice is mailed to the taxpayer's last known address), not from when the taxpayer later learns about it or decides to appeal.

Q: What happens if my complete appeal is filed after the 90-day deadline?
A: The application for correction is barred by the statute of limitations, and the assessment stands regardless of the strength of the taxpayer's substantive arguments.

Q: Can I preserve my appeal rights by sending a quick letter now and filing the full appeal documentation later?
A: Not safely -- only a genuinely COMPLETE appeal filed within 90 days protects your rights; a preliminary notice of intent does not stop the clock.

Citations and references

• Va. Code § 58.1-1821 (90-day deadline to apply for correction of an assessment)
• 23 VAC 10-20-165 B (strict enforcement of the 90-day appeal deadline; notice of intent does not extend it)
• Va. Code § 58.1-1820 (assessment deemed made when notice is mailed)

Subject

Administration: Appeal - Not Timely Filed

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 23-35

Original ruling text

April 5, 2023

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will respond to your letter in which you seek correction of the individual income tax assessments issued to your clients, * (the “Taxpayers”), for the taxable years ended December 31, 2018 and 2019.

FACTS

The Taxpayers, a husband and wife, filed a Virginia part-year resident income tax return for the 2018 taxable year, allocating all of the husband’s income to his period of nonresidency and claiming subtractions for retirement income. The Taxpayers filed a Virginia resident income tax return for the 2019 taxable year, claiming subtractions for military income earned in another state and foreign earned income. Under audit, the Department disallowed the subtractions and determined that the Taxpayers did not qualify as part-year residents for 2018. The Department issued assessments accordingly. The Taxpayers appeal, contending the husband was not a Virginia resident during the taxable years at issue.

The Taxpayers’ appeal also covered a separate assessment issued for the 2017 taxable year, but that assessment has been abated subsequent to the filing of an amended return by the Taxpayers. This determination, therefore, will be limited to the assessments issued for the 2018 and 2019 taxable years.

DETERMINATION

Virginia Code § 58.1-1821 states that “[a]ny person assessed with any tax administered by the Department of Taxation may, within ninety days from the date of such assessment, apply for relief to the Tax Commissioner.” Title 23 of the Virginia Administrative Code (VAC) 10-20-165 B 1 provides that “[t]he Department strictly enforces the 90-day limitations period for filing a timely administrative appeal. A taxpayer must file a complete appeal within 90 calendar days after the date of assessment.” In addition, filing a notice of intent to appeal does not satisfy or extend the 90-day limitations period. See Title 23 VAC 10-20-165 B 2 and D 4.

In this instance, the assessments issued to the Taxpayers were dated March 12, 2021. Based on the provisions of Virginia Code § 58.1-1821 and Title 23 VAC 10-20-165, the Taxpayers’ complete appeal must have been filed by June 10, 2021. The Taxpayers filed a notice of intent to appeal on April 9, 2021, however, as noted above, that did not extend the 90-day limitations period. The Taxpayers filed their appeal on March 22, 2022, well after the 90-day limitations period. Accordingly, the Taxpayers’ application for correction is barred by the statute of limitations.

The Taxpayers will receive updated bills that will include accrued interest to date. The Taxpayers should remit the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collection actions.

The Code of Virginia section and regulations cited are available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. 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/4127.X