Virginia assessed me income tax based on IRS data, but I didn't live or work in Virginia that year — isn't saying so enough to cancel the assessment?

Plain-English summary

The Department received IRS data indicating a married couple may have needed to file a 2019 Virginia income tax return. Its records showed none had been filed, so it asked the couple for information — and when no response came, it issued an assessment. The couple appealed under Va. Code § 58.1-1821, saying they did not live or work in Virginia during 2019. The assessment was upheld.

Why "we didn't live or work there" wasn't enough. Virginia taxes two classes of residents (Va. Code § 58.1-302): actual residents (more than 183 days in Virginia) and domiciliary residents — people whose permanent home, the place they intend to return to, is Virginia. A Virginia domiciliary remains taxable by Virginia even while living and working somewhere else. So a bare statement about where the couple lived and worked in 2019 doesn't answer the question the Department has to decide: whether Virginia was still their domicile that year.

The burden was theirs, and they didn't carry it. A Department assessment is prima facie correct (§ 58.1-205), so the taxpayer must prove it wrong. The Department wrote twice — April 10, 2024 and October 16, 2024 — asking for supporting information, including a completed domicile questionnaire. The couple never responded. The ruling also flags a sharper edge: under § 58.1-1826, a court cannot grant relief from even an erroneous assessment when the error is attributable to the taxpayer's willful failure or refusal to provide required information.

One last chance. The Commissioner upheld the assessment but gave the couple a final 30-day window to either file a 2019 Virginia resident return or respond to the information request with the completed questionnaire. If they do, the assessment will be reviewed and adjusted as appropriate; if not, it will be considered correct.

What this means for you

Former (or claimed non-) Virginians who get a nonfiler assessment

Denying Virginia contact isn't a defense — documenting your domicile is. Complete the domicile questionnaire and supply the facts (where your home, license, registrations, voting, family, and work were) that show either that Virginia was never your domicile or that you abandoned it. The assessment starts out presumed correct, and only evidence moves it.

Anyone tempted to ignore Department letters

Silence is the worst strategy available. Not only does the assessment stand administratively, but § 58.1-1826 can lock the courthouse door: judicial relief is unavailable where even a genuinely erroneous assessment traces to your own willful failure to provide information. Deadlines in these letters are real — this couple is down to a final 30 days.

Practitioners

This ruling pairs the standard nonfiler mechanics (IRS data match → information request → assessment on non-response) with the domicile framework: a client's affidavit of out-of-state presence, without the questionnaire and corroborating records, will not overcome § 58.1-205.

Common questions

Q: We told Virginia we didn't live or work there that year. Why did the assessment stand?
A: Because Virginia taxes its domiciliary residents even when they live or work elsewhere. Where you were physically isn't the whole question — the Department needed evidence of where your permanent home (domicile) was, and the requested domicile questionnaire was never returned.

Q: What is the domicile questionnaire?
A: A Department form gathering the facts used in the multi-factor domicile analysis, so the Department can make an informed decision about liability. In this case it was requested twice, in April and October 2024, and never provided.

Q: Can't we just fight the assessment in court instead?
A: That path narrows fast: Va. Code § 58.1-1826 precludes a court from granting relief where an erroneous assessment is attributable to the taxpayer's willful failure or refusal to supply information required by law.

Q: Is there still a way out here?
A: Yes — within 30 days of the letter, the couple can file a 2019 Virginia resident return or finally answer the information request (including the questionnaire). The Department will then review and adjust the assessment as appropriate; otherwise it's final.

Citations and references

Statutes:

• Va. Code § 58.1-1821 — administrative appeal (application for correction) to the Tax Commissioner
• Va. Code § 58.1-301 — conformity; Virginia taxable income starts from federal adjusted gross income
• Va. Code § 58.1-302 — domiciliary and actual residents; domiciliaries taxed even while elsewhere
• Va. Code § 58.1-205 — assessments are prima facie correct; burden on the taxpayer
• Va. Code § 58.1-1826 — no court relief where the erroneous assessment stems from willful failure to provide information

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-58

Original ruling text

April 25, 2025

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 assessment issued to * and *** (the “Taxpayers”) for the taxable year ended December 31, 2019.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayers may have been required to file a Virginia income tax return for the 2019 taxable year. A review of the Department’s records showed that the Taxpayers had not filed a return. The Department requested additional information from the Taxpayers in order to determine if their income was taxable in Virginia. When a response was not received, the Department issued an assessment. The Taxpayers submitted an application for correction, contending they did not live or work in Virginia during 2019.

DETERMINATION

Virginia Code § 58.1-301 provides, with certain exceptions, that the terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia . For individual income tax purposes, Virginia conforms to federal law, in that it starts the computation of Virginia taxable income (VTI) with federal adjusted gross income (FAGI). Income properly included in the FAGI of a Virginia resident is subject to taxation by Virginia, unless it is specifically exempt as a Virginia modification pursuant to Chapter 3 of Title 58.1 of the Code of Virginia .

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia Code § 58.1-302. The domiciliary residence of a person means the permanent place of residence of that person and the place to which that person intends to return even though they may be residing elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained their place of abode within Virginia. A Virginia domiciliary resident continues to be subject to Virginia taxation even if they work in another state or country. Additionally, a person who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days, is also subject to Virginia taxation.

The Taxpayers’ application merely stated that they did not live or work in Virginia in 2019. As stated above, however, if the Taxpayers had been domiciliary residents of Virginia that year, their income would have been subject to taxation even if they did not live or work in Virginia.

Virginia Code § 58.1-205 provides that in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayers to show they were not subject to income tax in Virginia. Furthermore, Virginia Code § 58.1-1826 precludes a court from granting relief to taxpayers seeking correction of erroneous state tax assessments in cases in which the erroneous assessment is attributable to a taxpayer’s willful failure or refusal to provide the Department with necessary information as required by law.

By letters dated April 10, 2024, and October 16, 2024, the Department requested additional information to support the application, including a completed domicile questionnaire, so that the Department could make an informed decision concerning the Taxpayers’ Virginia income tax liability. To date, the Taxpayers have failed to respond with the requested information.

Because the Taxpayers have not furnished the requested information, the Department must uphold the assessment for the 2019 taxable year. The Department will, however, grant the Taxpayers a final opportunity to either file a 2019 Virginia resident return or provide a response to the information request, including a completed domicile questionnaire. The documentation or return must be provided within 30 days from the date of this letter. Please send the documentation or return to the Department’s Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, P.O. Box 27203, Richmond, Virginia 23261-7203, Attention: *. Upon receipt, the information will be reviewed and the assessment will be adjusted, as appropriate. If the return or documentation is not received within the allotted time, the assessment will be considered to be correct.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. If you have any questions regarding this response, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4667.Y