The Virginia Tax Statute of Limitations
The Virginia Administrative Tax Code and Section 58.1-104 of the Virginia Code provide the tax rules for Virginia's tax department. The Commonwealth's tax department has three-years to collect overdue taxes from its residents. However, the three-year period does not apply if the taxpayer failed to file necessary tax returns. The Virginia tax authorities have an unlimited amount of time to pursue delinquent taxes if the taxpayer fails to file a return.
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Legal Definition
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Statutes of limitations are legal time limits in which parties may file lawsuits or pursue legal claims. Tax limitations periods for a state's tax department depend upon the state's specific laws. In Virginia, the Code prescribes limitations periods for tax collection efforts.
Virginia's Statute of Limitations for Collecting Penalties
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If the taxpayer fails to pay tax penalties or interest on delinquent tax assessments, then the Virginia tax department has up to 20-years to collect the overdue interest and penalties by filing a tax lien against the taxpayer's assets. The Commonwealth's tax department must collect overdue penalties and interest within 20-years from the date of assessed penalty. If the taxpayer files for bankruptcy, the statute of limitations period is suspended during the stay in bankruptcy court. The Virginia tax commissioner has additional time to collect assets during tax levies and tax liens.
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Virginia's Statute of Limitations for Federal Tax Changes or Erroneous Refund
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Virginia's tax code gives the tax commissioner one year to collect increased tax assessments based upon the taxpayer's increase in income and federal tax base. In situations where the state's tax department inadvertently issued an incorrect refund, the Commonwealth treats the incorrect tax payment as a liability. Taxpayers must pay back the incorrect tax refund within two years. In cases where the taxpayer intentionally files an incorrect tax return, the Commonwealth has up to five years to collect the underreported tax refund.
Virginia's Statute of Limitations for Fraudulent Tax Returns or Failure to File
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In these situations, Virginia's tax code allows the state's tax commissioner an unlimited period to pursue collections. Additionally, taxpayers who fail to report necessary changes in income risk collections for an unlimited period.
Virginia's Statute of Limitations for Taxpayer's Estate
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Virginia taxpayers who die during any tax year may have an executor or administrator appointed to execute the taxpayer's will or trust. If the taxpayer's estate requests a written tax determination of outstanding taxes on the estate's property, then the tax department has 18-months to provide the written assessment and up to three-years to collect the tax payments from the original return date.
Consideration
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Tax laws may frequently change. The most current or detailed advice is available through a certified accountant or tax attorney licensed to practice law in your jurisdiction.
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References
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- Photo Credit Shockoe Slip, Richmond, Virginia image by Christopher Martin from Fotolia.com
