                                 CODE OF VIRGINIA

PERIOD OF LIMITATIONS ON COLLECTION; ACCRUAL OF INTEREST AND PENALTY (§
58.1-1802.1)

A. Where the assessment of any tax imposed by this subtitle has been made within
the period of limitation properly applicable thereto, such tax may be collected
by levy, by a proceeding in court, or by any other means available to the Tax
Commissioner under the laws of the Commonwealth, but only if such collection
effort is made or instituted within seven years from the date of the assessment
of such tax. Except as otherwise provided in this section, effective for
assessments made on and after July 1, 2016, all collection efforts shall cease
after such seven-year period even if initiated during the seven-year period.
Prior to the expiration of any period for collection, the period may be extended
by a written agreement between the Tax Commissioner and the taxpayer, and
subsequent written agreements may likewise extend the period previously agreed
upon. The period of limitations provided in this subsection during which a tax
may be collected shall not apply to executions, levy or other actions to enforce
a lien created before the expiration of the period of limitations by the
docketing of a judgment or the filing of a memorandum of lien pursuant to &#xA7;
58.1-1805; nor shall the period of limitations apply to the provisions of
&#xA7;&#xA7; 8.01-251 and 8.01-458.

B. The running of the period of limitations on collection shall be suspended for
(i) the period the assessment is the subject of a proceeding pursuant to &#xA7;
58.1-1807, 58.1-1821, 58.1-1825, or 58.1-1828; (ii) the period the assets of the
taxpayer are in the control or custody of any state or federal court, including
the United States Bankruptcy Court; or (iii) the period that an installment
agreement entered into by the taxpayer pursuant to &#xA7; 58.1-1817 is in
effect.

C. If the Department of Taxation has no contact with the delinquent taxpayer for
a period of six years and no memorandum of lien has been appropriately filed in
a jurisdiction in which such taxpayer owns real estate, interest and penalty
shall no longer be added to the delinquent tax liability. The mailing of notices
by the Department to the taxpayer&#8217;s last known address shall constitute
contact with the taxpayer.

D. For purposes of this section, the &#8220;last known address&#8221; of the
taxpayer means the address shown on the most recent return filed by or on behalf
of the taxpayer or the address provided in correspondence by or on behalf of the
taxpayer indicating that it is a change of the taxpayer&#8217;s address.

E. In any pending or future administrative or judicial proceeding in which the
validity of a tax assessment is an issue, the participation of the Department of
Taxation in any capacity shall be considered a collection effort for purposes of
this section.

HISTORY: 1990, c. 659; 2010, c. 30; 2012, c. 840; 2016, c. 634; 2023, c. 265;
2024, Sp. Sess. I, c. 2; 2025, c. 725.