Virginia Tax Appeals: Letter to Virginia Tax Commissioner Janie E. Bowen

August 2, 2006

Ms. Janie E. Bowen
Tax Commissioner
Virginia Department of Taxation
P.O. Box 2475
Richmond, VA 23216-2475

RE: Proposed Changes to document entitled "Administrative Appeal Guidelines for Tax Assessments Issued by the Department of Taxation."

Dear Ms. Bowen:

We want to thank you for the opportunity to work with the Department of Taxation on this project. In an effort to continue the collaborative spirit of the agreement between the Department of Taxation and the Virginia Society of Certified Public Accountants (VSCPA), we are sending you a brief synopsis of several key items that we believe warrants further consideration by the Department of Taxation before submitting the "Administrative Appeal Guidelines for Tax Assessments Issued by the Department of Taxation" into the regulatory drafting process. Please note that we are substantially in agreement with the original document as drafted; however, we would recommend several enhancements to better position these provisions with taxpayers. The following bullet points represent the proposed revisions that we believe will enhance the effectiveness of these guidelines in the Department's dealings with taxpayers throughout the state of Virginia.

Proposed Revisions

1. Subject to the proposed revisions, we recommend that these guidelines be formally adopted by the Department of Taxation as a regulation through procedures established under the Administrative Processes Act (APA). We believe this is a key element to enhancing the effectiveness of the current appeals process.
2. In an effort make sure this document covers the specific issues discussed as part of the Task Force coalition-building process, we recommend changing the word "Issued" in the title to "Reviewed" to better suit the needs of taxpayers.
3. Revise §3(A) to clarify the consecutive calendar day criteria. We recommend inserting "(i.e. including weekends, holidays, etc.)" at the end of the sentence.
4. Insert "business" before days in §3(C)(1) and §3(C)(2).
5. Insert 'penalties and/or interest" after tax in the first sentence of §5 to ensure that a conference will be available to a taxpayer assessed with only penalties or interest, e.g. under a converted assessment per Va. Code sec. 58.1-1813.
6. Expand §5(G)(1) to include not only an analyst but at least one of the following: tax commissioner, a deputy, executive, or assistant tax commissioner whose responsibilities include the oversight of administrative appeals, director of appeals and rulings and director of policy development. This addition will provide taxpayers with the opportunity for a more comprehensive and complete hearing.

In addition to the proposed revisions, the Task Force would like to the ability to have an appeals conference for appeals of local taxes before the tax commissioner. To make such a change, several provisions and/or definitions in this document would have to be changed, in addition to providing the locality with the ability to have a local representative present at the conference.

Once again, the VSCPA Task Force wants to thank you for the effort displayed by the Department of Taxation to better enhance its relationship with taxpayers throughout the state of Virginia.

If you have any questions, please feel free to call me, Damon DeSue, at (757) 321-5140, or VSCPA Government Affairs Director Erin Collins at (804) 733-8272.

Sincerely,

Damon L. DeSue
Chair — VSCPA Tax Appeals Task Force