The Department ruled against me on my residency dispute, and I found six other cases where taxpayers won similar arguments — can I get my case reconsidered on that basis?

Plain-English summary

In an earlier ruling, P.D. 24-28 (issued March 10, 2024), the Department had determined the Taxpayer remained a taxable domiciliary resident of Virginia for the 2019 taxable year. The Taxpayer sought reconsideration of that determination, citing six prior Department rulings in which OTHER taxpayers had successfully proven they'd abandoned their Virginia domicile, and arguing that P.D. 24-28's conclusion was simply wrong.

The four narrow reconsideration criteria. Title 23 VAC 10-20-165 F allows a taxpayer who disagrees with a final determination under Va. Code § 58.1-1822 to request reconsideration, but only within 45 days of the determination letter AND only by meeting one of four specific requirements: (1) the Tax Commissioner misstated or got the underlying facts wrong, in a way that would change the outcome if corrected; (2) the governing law changed by legislation, court decision, or other authority effective for the tax periods at issue; (3) the Department misapplied the correct policy, such that applying it properly would change the result; or (4) the taxpayer has discovered genuinely new evidence that wasn't available when the original appeal was filed, which could change the outcome.

Why citing favorable precedent didn't qualify. The Department explained that it interprets the third criterion — "misapplied policy" — narrowly, to mean the Department applied the WRONG legal standard, not that it applied the right standard but reached a result the taxpayer didn't like. Here, there was no dispute that Virginia's law of domicile was the correct framework, and that WAS the standard the Department actually applied in P.D. 24-28. The Taxpayer's real argument was that the Department should have reached a different conclusion under that same standard — which the Department said cannot count as "misapplied policy," because if it did, EVERY taxpayer denied on appeal could simply claim "misapplied policy" by arguing the Department should have ruled the other way, making the criteria meaningless.

Timing of the argument matters too. The Department noted that comparing a case to prior favorable rulings is something a taxpayer should do when FIRST submitting an administrative appeal — not after receiving an adverse determination and going looking for supporting precedent afterward. The specific reconsideration criteria exist precisely to keep the appeals process from turning into an open-ended second round of the same argument.

Result: because none of the four criteria were satisfied, P.D. 24-28 remained the Department's final determination, and the underlying assessment was upheld (with an updated bill including accrued interest to follow).

What this means for you

Taxpayers who disagree with a final determination

Reconsideration isn't a chance to re-argue your case or point to other taxpayers' favorable outcomes. You need to fit within one of the four specific criteria — misstated facts, a genuine change in law, a truly WRONG legal standard applied, or real new evidence — and simple disagreement with the result doesn't count as any of them, even when you can point to precedent that seems to support your position.

Building your strongest case the first time

If prior rulings support your position on a residency, domicile, or similar factual dispute, raise them in your ORIGINAL administrative appeal — not after you've already lost and are looking for a second chance. The Department has made clear that timing matters here.

Accountants and tax professionals

When a client's appeal is denied, carefully screen whether a reconsideration request genuinely fits one of the four narrow criteria before filing one — a request built on "the Department should have decided this differently" will be denied on threshold grounds without reaching the merits again, wasting the 45-day window that could otherwise be used to pursue other remedies (like a circuit court suit).

Common questions

Q: Can I get my case reconsidered by showing other taxpayers won similar arguments?
A: No. Citing favorable precedent for OTHER taxpayers doesn't fit any of the four reconsideration criteria — it's treated as simple disagreement with the result, not a basis for reconsideration.

Q: What does "misapplied policy" actually mean for reconsideration purposes?
A: It means the Department applied the WRONG legal standard or rule to your case — not that it applied the right standard but you think it reached the wrong conclusion.

Q: How much time do I have to request reconsideration?
A: 45 days from the date of the final determination letter.

Q: What if I find genuinely new evidence after my appeal was already decided?
A: That's one of the four valid criteria — but it must be evidence that wasn't available to you at the time you filed your original appeal, not evidence you simply didn't think to gather or cite earlier.

Citations and references

Statutes and regulations:

• 23 VAC 10-20-165 F — reconsideration of a final determination requires one of four specific criteria, requested within 45 days
• Va. Code § 58.1-1822 — Department's final determination on an administrative appeal

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 24-131

Original ruling text

December 13, 2024

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek reconsideration of the Department’s determination letter, issued as Public Document (P.D.) 24-28 (3/10/2024).

FACTS

In P.D. 24-28, the Department found that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2019 taxable year. The Taxpayer has cited six prior cases in which the Department determined that taxpayers abandoned their Virginia domicile. The Taxpayer seeks a reconsideration of P.D. 24-28, asserting that the Department’s determination was incorrect.

DETERMINATION

Title 23 of the Virginia Administrative Code (VAC) 10-20-165 F provides that a taxpayer who disagrees with the Department’s final determination issued pursuant to Virginia Code § 58.1-1822 may request a reconsideration of the determination. In order to grant a request for reconsideration, the Department must receive the request no later than 45 days after the date of the determination letter, and a taxpayer must meet one of four specific requirements set forth in that section:

1. The facts upon which the original determination is based are misstated by the Tax Commissioner or are inaccurate, and the determination would have a different result based on a correction of the Tax Commissioner’s misstatement of the facts presented or a clarification of the original facts presented in the taxpayer’s administrative appeal;

2. The law upon which the original determination is based has been changed by legislation, court decision, or other authority effective for the tax period(s) at issue;

3. The policy upon which the original determination is based is misapplied, and the determination would have a different result based on the application of the proper policy; or

4. The taxpayer has discovered additional evidence or documentation that was not available to the taxpayer at the time the original administrative appeal was filed with the Department, and the additional evidence or documentation could produce a result different from the original determination.

In this case, none of the reconsideration requirements have been satisfied. The Taxpayer should be aware that the Department interprets the third criterion to mean that the Department has not applied the correct law to the case. Here, there is no dispute that the law of domicile applies, and this was the law that the Department applied to the facts in P.D. 24-28. The Taxpayer simply believes that the Department reached the incorrect result. If the Department were to interpret the third criterion in that manner, there would be no reason to have criteria. Every taxpayer who asks for a reconsideration could simply say that the Department “misapplied” policy by not arriving at the result the taxpayer was seeking. See P.D. 20-188 (11/10/2020) and P.D. 23-83 (7/13/2023). In addition, specific reconsideration criteria are in place to ensure an economical administrative appeals process. The time for a taxpayer to compare and contrast past cases is when they first submit their appeal to the Department, not after they receive an adverse appeal determination.

While the Department recognizes the Taxpayer’s disagreement with its determination in P.D. 24-28, he has failed to meet the requirements for a reconsideration. Consequently, P.D. 24-28 constitutes the Department’s final determination in this matter.

The assessment, therefore, is upheld. An updated bill will be issued to the Taxpayer shortly, which will include accrued interest to date. The Taxpayer should remit the balance due upon receipt to avoid the accrual of additional interest and possible collections actions.

The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public documents cited are available at 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 and Legislative Affairs, Tax Adjudication and Resolution Division, at () * or email at **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

Related Documents

20-188

23-83

24-28