If I file Virginia Nonresident Tax 763, can they force me to also send copy of Federal forms?

Question

What might happen if I refuse?

Answer 1

Some states that use the Federal return as the starting point require that you submit a copy of the Federal return.  If that is true in Virginia your return will not be considered properly filed if it does not include a copy of the federal return.

Answer 2

Yes, they can force you to send the forms because Virginia, like many states, relies on certain items on the federal forms to calculate state tax.  

If you refuse to hand over federal forms voluntarily, they can issue a summons for them.  If you refuse to obey the summons, they can hold you in civil or criminal contempt.  If they hold you in contempt, they can fine you or conceivably put you in jail (although the latter is very unlikely).

And if you refuse to hand over the federal forms, they can get them anyway from the IRS.  They can also compute your Virginia tax liability on their own without relying on the federal forms.  If they compute tax liability without the forms, they will not give you any deductions to which you might otherwise be entitled.

There is no scenario under which you can benefit from refusing to provide the federal forms.  I understand your frustration, but in the end, the deck is stacked against you.

Answer 3

The federal government and the states share tax return information.  There is no way you can keep the federal tax return information from Virginia.

If you refuse, it is likely that your state tax return will not be processed.  It will be returned to you as incomplete since it did not include the necessary attachments.  At that point, you won't be filed, and all the consequences of not filing can befall you.  

There would be no need to subpoena your documents.  The state would simply figure what you owed based on the least beneficial method and assess that tax, plus penalties and interest.