                                 CODE OF VIRGINIA

LIMITATIONS ON ASSESSMENT (§ 58.1-312)

A. The tax imposed by this chapter may be assessed at any time if:

   1. No return is filed;

   2. A false or fraudulent return is filed with intent to evade tax;

   3. The taxpayer fails to comply with &#xA7; 58.1-311 in not reporting a change
   or correction increasing his federal taxable income as reported on his federal
   income tax return, or in not reporting a change or correction which is treated
   in the same manner as if it were a deficiency for federal income tax purposes,
   or in not filing an amended return; or

   4. The taxpayer fails to comply with &#xA7; 58.1-311.1 by not reporting a
   change or correction decreasing the tax paid to another state for which a
   credit was claimed on his Virginia income tax return as a result of an
   examination conducted by any other state or an amended income tax return filed
   with any other state.

B. The tax may be assessed within six years after the return was filed, whether
such return was filed on or after the date prescribed, if the taxpayer knowingly
failed to disclose on his state income tax return a transaction identified by
the Tax Commissioner as an abusive tax avoidance transaction and published as
provided in &#xA7; 58.1-204. A return of tax filed before the last day
prescribed by law for the timely filing thereof shall be considered as filed on
the last day. If such return is false or fraudulent, an assessment may be made
at any time whether or not the falsity or fraud is related to the abusive tax
avoidance transaction.

C. If the taxpayer pursuant to &#xA7; 58.1-311 or 58.1-311.1 reports a change or
correction or files an amended return increasing his federal taxable income,
decreasing the tax paid to another state, or reports a change or correction
which is treated in the same manner as if it were a deficiency for federal
income tax purposes, the assessment (if not deemed to have been made upon the
filing of the report or amended return) may be made at any time within one year
after such report or amended return was filed. The amount of such assessment of
tax shall not exceed the amount of the increase in Virginia tax attributable to
such federal change or correction. The provisions of this paragraph shall not
affect the time within which or the amount for which an assessment may otherwise
be made.

D. If a deficiency is attributable to the application to the taxpayer of a net
operating loss carry-back, or to a net capital loss carry-back, it may be
assessed at any time that a deficiency for the taxable year of the loss may be
assessed.

E. An erroneous refund shall be considered an underpayment of tax on the date
made, and an assessment of a deficiency arising out of an erroneous refund may
be made at any time within two years from the making of the refund, except that
the assessment may be made within five years from the making of the refund if it
appears that any part of the refund was induced by fraud or misrepresentation of
a material fact.

F. If a return is required for a decedent or for his estate during the period of
administration, the tax shall be assessed within eighteen months after written
request therefor (made after the return is filed) by the executor, administrator
or other person representing the estate of such decedent, but not more than
three years after the return was filed, except as otherwise provided in this
subsection.

HISTORY: Code 1950, § 58-151.0104; 1971, Ex. Sess., c. 171; 1984, c. 675; 2006,
c. 234; 2007, c. 524.