Current through Register Vol. 41, No. 3, September 23, 2024
A.
Generally. If the amount of tax paid by any individual exceeds that which is
actually due, the overpayment shall be refunded to the taxpayer or, at the
taxpayer's request, credited against his tax liability for the next succeeding
taxable year.
B. Set-off debt
collection.
1. Generally. Pursuant to the
provisions of the Set-Off-Debt Collection Act (§ 58.1-520 et seq. of the
Code of Virginia) the tax refund of any individual may be used in whole or in
part to set off any delinquent debt owed by the taxpayer to a claimant agency
as defined in § 58.1-520 of the Code of Virginia, which includes all state
agencies, local governments, and the Supreme Court. The determination of
whether a refund set-off is proper and the resolution of questions concerning a
set-off must be addressed to the claimant agency and not the Department of
Taxation.
2. Amended returns. Any
portion of a tax refund which has been transmitted to a claimant agency
pursuant to a final debt set-off is deemed to have been paid to the taxpayer.
Therefore, if an amended return is filed relative to an overpayment of tax
which has been transmitted to a claimant agency, only that portion in excess of
the amount transmitted shall be refunded. If an amended return shows a lesser
overpayment than that on the original return and such prior refund amount has
been transmitted to a claimant agency, the taxpayer will be liable for payment
to the department for the difference between the original overpayment and the
amount shown on the amended return, as though the original refund had been made
directly to the taxpayer.
A husband and wife who file separately on a combined return
and who, after notification that all or a portion of the refund resulting from
such return has been set-off to satisfy a delinquent debt claim, file an
amended return which results in a shift in the refund interest from one spouse
to the other shall be deemed to have fraudulently conveyed interest in the
refund and such amended returns shall not be accepted unless the result is an
overall increased refund. (For additional information, see Set-Off Debt
Collection Act Regulations, Chapter 380 of Title 23 of the Virginia
Administrative Code.)
C. Interest on refunds.
1. Generally. The payment of interest on
refunds of tax overpayments shall be controlled by the provisions of §
58.1-1833 of the Code of Virginia.
2. Withholding and estimated tax. Tax
withheld by an employer pursuant to the provisions of § 58.1-460 et seq.
of the Code of Virginia and any amount paid as estimated tax is deemed to be
paid when the income tax return for the taxable year is filed or on the due
date of the return, whichever is later.
3. Net operating loss and net capital loss.
Any overpayment of tax attributable to the carry-back to a preceding taxable
year of any net operating loss or net capital loss shall be deemed to be made
on the day on which the return for the year in which the loss occurred was
filed, or the last day prescribed by law for such filing, whichever is later.
(See also 23VAC10-20-200 and
23VAC10-110-320.)
Statutory Authority
§§ 58.1-203 and 58.1-309 of the Code of Virginia.
