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November Updates and Filing Reminders for Tax Preparers and Corporation Income Tax from the VA Dept. of Taxation

11 Nov 2011 10:25 AM | Anonymous

Filing Reminder for Corporation Income Tax Clients

Corporation income tax returns for the taxable year ended July 31, 2011 are due to be filed by Nov. 15, 2011.  For fastest and easiest filing, use Corporate Income Tax e-File to file your client's return.

Remember, even though Virginia law provides for an automatic six-month filing extension, that extension does not apply to tax payments. To avoid penalties, be sure your client pays at least 90 percent of the tax liability by Nov. 15, 2011.  Use our free Business iFile service to make your client's payment online.

A reminder for your clients whose corporation's taxable year ended Jan. 31, 2011: the extended filing date is coming up soon!  Return and payment for any tax due must be filed by Nov. 15, 2011.   

For complete information on corporation income tax filing and payment requirements, see the instructions for Form 500 on our website

Power of Attorney Process Issues F.A.Q.

Virginia established a new Power of Attorney process last year that allowed Authorized Agents to receive automatic copies of correspondence sent to the taxpayers they represent.  To address confusion on the Power of Attorney process, here is a list of Frequently Asked Questions on Power of Attorney matters and submission of R-7 and PAR 101 forms.

Q:  Why register as an Authorized Agent?

A: Anyone who wishes to be automatically copied on correspondence sent to a taxpayer must submit Form R-7 to register as an Authorized Agent with Virginia and Form PAR 101 identifying them as representative for that taxpayer. This includes all types of representatives: attorneys, friends, family members, accountants, etc.

Q: Who qualifies to register as an Authorized Agent or receive Power of Attorney authorization?

A:  Any individual can register as Authorized Agents and receive Power of Attorney authorization; businesses cannot.  The Department of Taxation will not accept a Form R-7 or any Power of Attorney documents that list a business as the authorized Power of Attorney.

Q: Will Virginia accept any alternate Power of Attorney documents?

A:  A federal Form 2848 specifying Virginia tax matters and specific years or a durable power of attorney document can be accepted only to allow discussion of related account issues. Alternate Power of Attorney documents cannot authorize the Department of Taxation to issue automatic copies of correspondence.  However, representatives authorized through alternate Power of Attorney documents can still obtain copies of taxpayer correspondence within the scope authorized by the Power of Attorney document. These representatives must submit written requests to Customer Service for the specific correspondence they wish to obtain.

Q:  Is the federal Form 8821 an acceptable Power of Attorney document?

A:  No, the federal Form 8821 is not an acceptable Virginia Power of Attorney document.  The Department of Taxation will not process these forms to record Power of Attorney authorization.

Q:  Will it be a problem if I use different information on my R-7 and PAR 101?

A:  Authorized Agents should use the exact same mailing address, name spelling, and contact information on both the R-7 and the PAR 101.  Differences in information may lead to confusion on the Authorized Agent’s identity and delays in processing PAR 101 forms.

Q:  What do I do if I need to update my Authorized Agent information?

A:  All updates to the Authorized Agent profile (mailing address, etc.) should be made on the Form R-7 with the change of information box checked.

Q:  Can I fill in the PAR 101 with my Federal CAF# instead of an Authorized Agent number?

A:  No. An Authorized Agent number (AA#) is issued to agents upon processing of their R-7.  This number is unique to VA and is not the same as the Federal CAF# or an Enrollment Card Number.

Q:  How many Authorized Agents can receive automatic copies of taxpayer correspondence?

A:  Only two (2) Agents per taxpayer may be named on the PAR 101 to receive automatic copies of correspondence.  Other agents can still be named to act on the taxpayer’s account by attaching a supplemental information list to the PAR 101 form.  These additional Agents will not receive automatic copies of correspondence, but they may obtain copies of correspondence by submitting a written request to Customer Service.

Q:  Is my Power of Attorney document valid without my signature?

A:  Without the Agent signature, authorization has not been accepted and TAX will be unable to communicate with said Agent.  Therefore, all Authorized Agents named on the PAR 101 must sign the form under the signature of representative section on line 7.  Agents on a supplemental form of the type outlined in the previous question must sign the supplemental statement.

Form R-7, Form PAR101, and their accompanying instructions are available online at the Virginia Department of Taxation’s website.

Taxpayer Bill of Rights

The Virginia Taxpayer Bill of Rights booklet outlines your rights in contacts with the Virginia Department of Taxation, and contains a wealth of other useful information, forms and instructions.

Intended as a guide to the rights provided in the Code of Virginia under the Virginia Taxpayer Bill of Rights, the publication also describes the role of the Taxpayer Rights Advocate and the agency’s collections, office audit, and field audit processes in detail, and covers the basics for offers in compromise and administrative appeals as well.  The booklet’s appendices include forms and instructions for submitting an appeal or an offer in compromise, plus forms for designating a Power of Attorney.

As you will find, the Virginia Taxpayer Bill of Rights booklet is a valuable resource for both taxpayers and tax professionals.  Be sure to bookmark or download a copy for your tax reference library!

Need More Information?

For more information on any of the topics in this message, please visit our website at http://www.tax.virginia.gov.
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is a 501(c)6 non-profit organization.

8100 Three Chopt Rd. Ste 226 | Richmond, VA 23229 | Phone: (800) 927-2731 | asv@virginia-accountants.org

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