Virginia Law

A. Notice. If under the provisions of 23VAC10-20-141, the Tax Commissioner makes the determination that padlocking is an appropriate method of collecting delinquent taxes, the taxpayer must be so notified. Padlocking may not occur unless the following requirements are met:

1. A notice of the department's intention to padlock is mailed to the last known address of the taxpayer or personnally delivered to the taxpayer not less than 10 days prior to the date padlocking occurs.

2. Such notice shall set out the amounts of delinquent taxes, the periods for which such taxes are delinquent, the types of taxes that are delinquent, and the date such taxes were first assessed by the Department of Taxation.

3. The notice shall contain a brief statement explaining what action the Department of Taxation intends to take if the delinquent taxes are not paid or satisfactory arrangement is not made to pay such taxes and a brief statement explaining the taxpayer's administrative remedies.

4. The notice shall inform the taxpayer of the date, time and location of the administrative hearing to be held at which the taxpayer may show cause why the business enterprise should not be padlocked. Failure to appear at the administrative hearing will be deemed a waiver of the hearing.

5. The notice shall inform the taxpayer that an allegation that the assessment is erroneous will not be considered at the hearing. If the taxpayer desires to make such an allegation it shall be in the form of an application for correction of an erroneous assessment pursuant to § 58.1-1821 of the Code of Virginia. The application shall fully set forth the grounds upon which the taxpayer relies and all facts relevant to the taxpayer's contention. (See subsection C.)

6. The notice shall give the taxpayer a telephone number that he can call to get more information regarding the Department of Taxation's intent to padlock the business enterprise.

B. Complementary actions. The department's notice may be issued at the same time as a notice to revoke a dealer's registration certificate under § 58.1-613 of the Code of Virginia. The show cause hearing under subdivision A 4 may be held in conjunction with a hearing required under § 58.1-613 of the Code of Virginia for the revocation of a sales tax certificate of registration.

C. Application for correction. The taxpayer may file an application for correction of an erroneous assessment pursuant to § 58.1-1821 of the Code of Virginia if he has reason to believe that the assessment is erroneous. However, if a taxpayer files an application after the department has issued a notice of intent to padlock the business enterprise, it is presumed that one of the taxpayer's reasons for filing the application is to prejudice or to render wholly or partially ineffectual proceedings to collect the delinquent tax. In this case, the department may determine that it is in the best interest of the Commonwealth to continue efforts to collect the delinquent tax during the time that it is considering the application for correction, unless the taxpayer posts a bond in an amount and with security satisfactory to the Tax Commissioner.