Tax Attorney in Arlington, VA

Federal IRS representation for Arlington County residents, the Pentagon civilian and uniformed workforce across the Department of Defense, the Joint Chiefs of Staff, the Office of the Secretary of Defense, the Army, Navy, Air Force, Marines, and Space Force service headquarters, DARPA, the Defense Intelligence Agency, and the Defense Logistics Agency, Central Intelligence Agency officers commuting from Langley, Amazon HQ2 employees in Crystal City and Pentagon City, defense contractors across Rosslyn, Ballston, Courthouse, and Crystal City — Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, CACI International, Leidos, General Dynamics, Boeing, Bechtel, L3Harris, SAIC, ManTech, Engility — and the Salvadoran, Mexican, Filipino, Korean, Bolivian, Ethiopian, Eritrean, and Vietnamese immigrant-professional communities across Columbia Pike, Westover, Cherrydale, Buckingham, and Glencarlyn. We handle audits, back taxes, liens, levies, payroll-tax disputes, U.S. Tax Court petitions tried in Washington, D.C., and refund suits in the U.S. District Court for the Eastern District of Virginia, Alexandria Division, and coordinate Virginia Department of Taxation matters under VA PAR-101 Power of Attorney where they sit alongside a federal case.

Reviewed by Parham Khorsandi, Esq. — California Bar #266658. Last reviewed: May 26, 2026.

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Serving Rosslyn, Courthouse, Clarendon, Ballston, Virginia Square, Crystal City, Pentagon City, Aurora Highlands, Shirlington, Westover, Cherrydale, Lyon Park, Lyon Village, Columbia Heights, Glencarlyn, Buckingham, Fairlington, and the broader Arlington County federal-and-defense corridor

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If you owe back taxes in Arlington County, here is the 2026 picture

Arlington VA is unusual within Virginia: Arlington County is the entire jurisdiction. There is no separate "Arlington City" overlay on top — Arlington County government covers the whole 26 square miles directly under the consolidated-county structure recognized by the Virginia General Assembly in 1932. That is different from neighboring Alexandria, which is an independent city, and from most of Virginia, where a city sits inside a county. For an Arlington VA taxpayer, the local-tax stack is one layer deep: the Arlington County Treasurer at 2100 Clarendon Boulevard, Suite 215, the Arlington County Commissioner of the Revenue at 2100 Clarendon Boulevard, Suite 200, and the Arlington County Department of Real Estate Assessment at the same address handle all city-and-county functions together. Virginia personal income tax runs from 2.0% to 5.75% under Va. Code § 58.1-320; the Virginia corporate rate is 6.0% under Va. Code § 58.1-400. Virginia also enacted a pass-through-entity election under Va. Code § 58.1-390.3 allowing eligible partnerships and S corporations to pay the entity-level Virginia tax and work around the federal SALT cap. The combined Arlington VA sales-tax rate is 6.0% — the 4.3% state rate under Va. Code § 58.1-603, plus the 0.7% Northern Virginia Regional rate under Va. Code § 58.1-603.1, plus the 1.0% Arlington local piggyback under Va. Code § 58.1-606.

If you have received an IRS CP504, LT11, or Statutory Notice of Deficiency, or if the Virginia Department of Taxation has issued a Notice of Assessment with proposed tax, penalty, and interest, the deadline to act is short. We pull your IRS account transcripts, calculate your federal CSED, file Form 2848 Power of Attorney with the IRS and VA Form PAR-101 with the Virginia Department of Taxation, and put administrative brakes on collection while the case is built. The 90-day federal Tax Court deadline under IRC § 6213(a) runs in parallel with the Virginia administrative-appeal window under Va. Code § 58.1-1821 — both clocks demand attention from day one.

Federal tax representation for Arlington VA taxpayers

Victory Tax Lawyers, LLP is a California-Bar-admitted tax-resolution law firm based in Los Angeles. Our federal practice runs nationwide: the Internal Revenue Service accepts our Form 2848 Power of Attorney in every state, and the U.S. Tax Court — a single federal tribunal with jurisdiction over IRS deficiency cases — holds regular trial sessions for Northern Virginia taxpayers at the National Courts Building, 400 Second Street NW in Washington, D.C., roughly four miles north of Courthouse station and an easy Orange or Silver Line Metro ride across the Potomac. From our Robertson Boulevard office in Los Angeles, we represent Arlington County residents, Pentagon civilian employees and uniformed officers across all branches of service, CIA officers commuting to Langley, Defense Intelligence Agency analysts, intelligence-community professionals with Q clearances, TS/SCI access, Special Access Program (SAP) read-ins, and Compartmented (SAR) clearances, Amazon HQ2 employees in Crystal City and Pentagon City, defense contractor executives across Rosslyn, Ballston, Courthouse, and Crystal City, and Northern Virginia immigrant-professional families in IRS audits, collection cases, Tax Court petitions, Offers in Compromise under IRC § 7122, Installment Agreements under IRC § 6159, lien discharges under IRC § 6325, levy releases under IRC § 6343, and Trust Fund Recovery Penalty defenses under IRC § 6672.

For Virginia state tax matters — the 2.0% to 5.75% graduated personal income tax under Va. Code § 58.1-320, the 6.0% Virginia corporate income tax under Va. Code § 58.1-400, the combined 6.0% Arlington sales-tax rate, withholding-tax assessments, the pass-through-entity election under Va. Code § 58.1-390.3, or contested matters at the Virginia Department of Taxation — we file VA Form PAR-101 with the Department and handle the administrative track directly through the Office of Tax Policy and the Appeals Unit. For litigation in the Arlington County Circuit Court under Va. Code § 58.1-1825 (the post-administrative refund-suit remedy) or appeals to the Court of Appeals of Virginia, we refer to locally admitted Virginia counsel under a co-counsel arrangement. The federal portion of the engagement, which is usually the bigger exposure given the Pentagon, CIA, Amazon HQ2, and defense-contractor concentration in Arlington, stays with us.

Arlington County is the operational nerve center of the United States federal national-security and defense apparatus. The Pentagon — the headquarters of the Department of Defense and the largest office building in the world by floor area — sits on the south bank of the Potomac at the Arlington end of the 14th Street Bridge. The building houses the Office of the Secretary of Defense, the Joint Chiefs of Staff, the headquarters of the Army, Navy, Air Force, Marine Corps, and Space Force, the Defense Advanced Research Projects Agency (DARPA) in Arlington, the Defense Intelligence Agency operational elements, and the Defense Logistics Agency liaison. CIA Headquarters at Langley sits eight miles upriver in McLean — just over the county line into Fairfax County — and pulls a thick commuter base from Arlington. Amazon HQ2 anchors Crystal City and Pentagon City with a target of 25,000 employees and a steady ramp of RSU vests, ISO grants, and IRC § 83(b) election deadlines for the post-2018 cohort. Around them, defense and intelligence contractors — Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, CACI International, Leidos, General Dynamics, Boeing Crystal City, Bechtel, L3Harris, SAIC, ManTech International, and Engility legacy entities — produce the highest per-capita concentration of cleared private-sector workers in the United States. Reagan National Airport (DCA) sits along the southeast edge of Arlington with American Airlines as the largest single airline tenant. The federal procedures are uniform; the facts are Arlington VA-specific.

Your tax rights as an Arlington VA taxpayer

Two parallel rights frameworks apply when you owe tax. Federal rights come from the Internal Revenue Code and IRS Publication 1, the Taxpayer Bill of Rights. State rights come from the Virginia Taxpayer Bill of Rights under Va. Code § 58.1-1845 and the procedural rules of the Virginia Department of Taxation. Knowing both is the difference between a clean resolution and a missed appeal window that ends in a state tax lien recorded against your Clarendon condominium, your Lyon Park bungalow, or your Cherrydale colonial.

Right to representation

IRC § 7521(b)(2) and (c) give you the right to be represented by an attorney, CPA, or Enrolled Agent during any IRS examination or interview. Once Form 2848 is on file, the IRS must deal with us first, not you. Virginia mirrors this through Form PAR-101 Power of Attorney, accepted for all Virginia Department of Taxation matters including audits, assessments, appeals, offers in compromise, and installment requests.

Right to U.S. Tax Court review

IRC § 6213(a) gives you 90 days from a Statutory Notice of Deficiency to petition the U.S. Tax Court without paying the tax first. Miss the 90 days and the federal assessment becomes final. The U.S. Tax Court holds regular trial sessions for Northern Virginia taxpayers at the National Courts Building, 400 Second Street NW, Washington, D.C. — about four miles north of Arlington's Courthouse station, an easy Orange or Blue Line Metro ride across the Potomac.

Right to Virginia administrative review

Va. Code § 58.1-1821 gives a taxpayer 90 days from a final Virginia Department of Taxation assessment to file an administrative appeal with the Tax Commissioner. The Commissioner issues a written determination, and a dissatisfied taxpayer may then file a refund suit in the appropriate Virginia Circuit Court under Va. Code § 58.1-1825. Virginia has no specialized state tax tribunal — circuit-court refund litigation is the formal next step.

Collection Due Process

IRC § 6320 (lien) and IRC § 6330 (levy) give you a 30-day window to request a CDP hearing once the IRS files a Notice of Federal Tax Lien or issues a Final Notice of Intent to Levy. A timely CDP filing halts collection and preserves judicial review through the Tax Court.

Right to settle for less than owed

Federally, IRC § 7122 authorizes Offers in Compromise based on doubt as to liability, doubt as to collectibility, or effective tax administration. Virginia runs a parallel program under Va. Code § 58.1-105 (the Tax Commissioner's settlement authority) with similar hardship and insolvency standards. Both programs require all returns filed before consideration.

Right to recover fees

IRC § 7430 allows recovery of administrative and litigation costs if the IRS takes a position that is not substantially justified and the taxpayer prevails. Va. Code § 58.1-1827 provides a parallel state cost-recovery remedy in certain cases. The threshold is high but real, especially in audit reconsideration and Innocent Spouse cases under IRC § 6015.

How Victory Tax Lawyers helps Arlington VA taxpayers

Offer in Compromise under IRC § 7122

We file Form 656 with Form 433-A(OIC) or 433-B(OIC), document the Reasonable Collection Potential, and negotiate doubt-as-to-collectibility offers when full collection is not feasible within the remaining CSED. For Arlington VA taxpayers, a federal OIC does not resolve Virginia state liability; we run a parallel Virginia Offer in Compromise with the Department of Taxation under Va. Code § 58.1-105 where the state debt is real. The Virginia 5.75% top marginal rate and the Arlington personal-property tax on vehicles and business equipment frequently produce a state component that materially affects RCP, particularly for Pentagon civilian employees with deferred compensation, CIA officers with cover-allowance reconciliation, Amazon HQ2 employees holding RSU at the Day-1 and Day-2 tower step-ups, and Crystal City defense executives carrying long RSU vest tails.

Installment Agreements under IRC § 6159

Streamlined IAs (under $50,000), partial-pay IAs under IRC § 6159(d), and full-pay agreements. We push for partial-pay structures where the IRC § 6502 ten-year CSED will extinguish the balance before payoff — an underused resolution path for Arlington taxpayers carrying between $50,000 and $250,000 in federal debt, particularly DoD contractor employees at Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, and CACI International whose RSU vests have caught up with them, Pentagon civilian SES members whose Form 1099-R federal-retirement reconciliation went sideways, and Amazon HQ2 employees relocating from Seattle, New York, or California with stranded multi-state withholding.

Lien discharge, subordination, and withdrawal

When a Notice of Federal Tax Lien blocks a Clarendon condominium sale or a Lyon Village refinance, we file Form 14135 (discharge), Form 14134 (subordination), or Form 12277 (withdrawal). NFTLs filed with the Arlington County Circuit Court Clerk at 1425 North Courthouse Road encumber title on Rosslyn, Courthouse, Clarendon, Ballston, Virginia Square, Crystal City, Pentagon City, Aurora Highlands, Shirlington, Westover, Cherrydale, Lyon Park, Lyon Village, Buckingham, Fairlington, and Glencarlyn properties; the IRS procedures under IRC § 6325 set the cure path. For taxpayers holding active security clearances at the Pentagon, CIA, DIA, NSA, NGA, or any of the cleared defense contractors based in Arlington, an unreleased federal tax lien is also a documented clearance-renewal concern under SF-86, Section 26 financial considerations.

Levy release under IRC § 6343

Wage levies, bank levies, and accounts-receivable levies. We document economic hardship under IRC § 6343(a)(1)(D) and Treasury Reg. § 301.6343-1(b)(4), and where the levy is procedurally defective, we challenge it through Collection Due Process or Appeals. Virginia state tax liens follow a parallel track under Va. Code § 58.1-1804 (memoranda of lien recorded with the Arlington County Circuit Court Clerk) and Va. Code § 58.1-1805 (judgment liens). The Virginia Department of Taxation can also issue administrative wage liens directly under Va. Code § 58.1-1812.

Audit defense and U.S. Tax Court litigation

Correspondence audits, office audits, and field examinations — including sensitive issues like cryptocurrency, foreign accounts under FinCEN Form 114 (FBAR), S-corporation reasonable-compensation, IRC § 174 capitalization of classified research and development, IRC § 1202 qualified-small-business-stock exclusion on defense-tech founder shares, IRC § 83(b) election timing on Amazon HQ2 restricted-stock grants, and military combat-zone exclusion under IRC § 112 for Pentagon-stationed officers rotating to forward areas. If the audit closes unfavorably, we petition the U.S. Tax Court within the 90-day IRC § 6213(a) window. Washington, D.C. trial sessions cover Northern Virginia petitioners including Arlington County residents.

Penalty abatement under IRC § 6651 and IRM 20.1.1

First-Time Abate administrative relief, reasonable-cause abatement, and statutory exceptions for failure-to-file and failure-to-pay penalties. On accuracy-related penalties under IRC § 6662, we document substantial authority or adequate disclosure to defeat the assessment. Virginia penalties under Va. Code § 58.1-347 (late filing) and § 58.1-351 (late payment) follow a separate reasonable-cause analysis applied by the Department of Taxation. For deployed Pentagon-stationed officers and CIA officers on cover assignments overseas, IRC § 7508 extends federal filing and payment deadlines automatically; we document the extension period and reverse improperly assessed penalties.

Twelve types of Arlington VA tax matters we handle

Federal cases for Arlington County residents and businesses, framed against the Virginia Department of Taxation and the consolidated-county local-tax overlay where it matters.

Pentagon, OSD, Joint Chiefs, and military service-headquarters tax issues

Arlington is the Pentagon's residential and commuter base. The 27,000-person Pentagon workforce includes the Office of the Secretary of Defense, the Joint Chiefs of Staff, the Army, Navy, Air Force, Marine Corps, and Space Force headquarters, the Defense Advanced Research Projects Agency, the Defense Intelligence Agency liaison, and the Defense Logistics Agency liaison. Common issues include FERS and CSRS federal-retirement Form 1099-R reconciliation, Thrift Savings Plan early-withdrawal exposure under IRC § 72(t), combat-zone exclusion under IRC § 112 for officers rotating to forward areas, and the IRC § 7508 automatic extension of federal filing and payment deadlines for service members in designated combat zones or qualified contingency operations. Special Mission Unit personnel and other classified-rotation military pull combat-zone treatment routinely.

CIA Langley, DIA, and intelligence-community classified IRC § 174 and clearance issues

CIA Headquarters at Langley sits eight miles upriver from Arlington Courthouse, and the Defense Intelligence Agency liaison runs out of the Pentagon. Arlington is the residential heart of the intelligence-community commuter base for Langley, Fort Meade NSA, Springfield NGA, and Bolling DIA. Common matters include Q-clearance, TS/SCI, Special Access Program (SAP), and Special Compartmented Information (SAR) financial-considerations review under SF-86 Section 26; cover-allowance income reconciliation for officers under non-official cover; foreign-bank-account FBAR exposure tied to overseas tours; and IRC § 174 capitalization treatment for classified research handled by intelligence-community contractors at Booz Allen Hamilton, CACI, Leidos, and SAIC. Compartmented program-of-record costs require method-change documentation that often cannot be itemized at the level normally expected on examination — we coordinate with the company tax department and the IRS examiner accordingly.

Amazon HQ2 RSU, ISO, and IRC § 83(b) elections in Crystal City

Amazon HQ2 in Crystal City and Pentagon City — announced 2018, with a target of 25,000 employees across two main towers and an ongoing build-out — concentrates a sizable technology-equity cohort in Arlington County. RSU vest events are taxed as W-2 ordinary income at the supplemental 22% federal withholding rate, which is below the actual marginal rate for senior software development engineers, principal engineers, and senior managers. ISO disqualifying dispositions trigger AMT under IRC § 55. IRC § 83(b) elections for restricted-stock grants on the early Amazon HQ2 cohort and on adjacent defense-tech pre-IPO companies demand exact 30-day filing windows. For relocators from Seattle, New York, or California, the prior-state stranded withholding, the year-of-move part-year-resident filings, and the residency tiebreaker analysis on shared-domicile facts are all in play. Amazon, like most public-company employers, runs Equity Edge or a similar broker platform that does not automatically true up the 22% supplemental rate to the employee's marginal bracket — the underpayment shows up the following April.

Defense contractor RSU, classified IRC § 174, and clearance debt

Lockheed Martin Arlington, Northrop Grumman (Falls Church and Arlington), Booz Allen Hamilton (McLean and Arlington), CACI International (Reston and Arlington), Leidos (Reston), General Dynamics (Reston and Arlington), Boeing Crystal City, Bechtel, L3Harris, SAIC (Reston and Arlington), ManTech International (Herndon and Arlington), and Engility legacy entities all issue equity to Arlington-resident executives and senior engineers. RSU vest events generate W-2 inclusion taxed at the default 22% supplemental rate — well below the actual marginal rate for high earners. For Q-clearance, TS/SCI, and SCI-with-polygraph holders, undisclosed federal tax debt is a documented adverse factor on SF-86 Section 26, and active levies or unreleased liens can prompt a Defense Counterintelligence and Security Agency review or a CIA Office of Security review. Classified-research IRC § 174 capitalization treatment under the post-2021 Tax Cuts and Jobs Act amendment runs separately on the corporate side and is one of the more contested areas in current defense-contractor audits.

DC, Virginia, and Maryland tri-state commuter wage allocation

Arlington residents work across three jurisdictions on any given week: Washington, D.C. for federal departments, K Street, and Capitol Hill; Maryland for NIH, Walter Reed, and FDA Silver Spring; Virginia itself for the Pentagon, Tysons, Reston, Crystal City, and Rosslyn. Maryland and Virginia run a reciprocal agreement (Md. Code § 10-703 and Va. Code § 58.1-342) limiting wage tax to the state of residence on bilateral commutes. DC is barred by federal law (Pub. L. 93-198) from taxing nonresidents on wage income earned within the District. The combined practical result for an Arlington resident: Virginia tax on all wage income regardless of where earned, with no separate DC or Maryland nonresident filing on wages. Misallocation by employer payroll systems is one of the most common audit triggers we see on Arlington engagements.

Crystal City, Rosslyn, and Ballston short-term-rental Schedule C and IRC § 280A

Crystal City sits directly across the Potomac from the Mall and the Tidal Basin and pulls a heavy DC-tourism short-term-rental market. Rosslyn anchors the Key Bridge corridor across to Georgetown. Ballston, Clarendon, and Courthouse have a dense Metro-walkable apartment-and-condo base. The IRC § 280A vacation-home rules govern whether your Arlington condo rental is reported as Schedule C (active business) or Schedule E (passive rental), and the 14-day personal-use line under § 280A(d)(1) is unforgiving. Active STR owners face self-employment tax under IRC § 1401 and may engage IRC § 469 material-participation analysis. The IRC § 199A qualified-business-income deduction may apply on the Schedule C path. Arlington County also requires short-term-rental registration with the Arlington County Department of Community Planning, Housing, and Development and collects the Transient Occupancy Tax through the Treasurer.

IRC § 1202 qualified-small-business-stock for defense-tech founders

Northern Virginia defense-tech founders and early employees frequently hold C-corporation stock that qualifies for the IRC § 1202 100% federal exclusion on up to $10 million of gain (or 10x basis), if the five-year holding period and active-business tests are met. The IRS scrutinizes § 1202 claims closely on audit. We document original issuance, gross-asset limits, and the redemption rules under § 1202(c)(3). Virginia conforms to federal taxable income as the starting point under Va. Code § 58.1-322, which generally pulls the federal § 1202 exclusion through to the state return.

IRC § 174 research-and-experimental capitalization for classified work

The Tax Cuts and Jobs Act amendment to IRC § 174, effective for tax years beginning after December 31, 2021, requires defense, intelligence, and aerospace companies to capitalize and amortize domestic R&E expenditures over five years (15 years for foreign research) rather than expensing them. Classified federal R&D handled by Booz Allen Hamilton, CACI, Leidos, MITRE Corporation, SAIC, and a long tail of cleared subcontractors faces an outsized hit because much of the work cannot be itemized in the same detail as commercial R&E. Compartmented program-of-record costs require careful method-change documentation. We coordinate with the company's tax department on examination responses and Form 3115 method-change filings.

Reagan National (DCA) airline crew tax under 49 U.S.C. § 40116

Reagan National Airport (DCA) sits along the southeast edge of Arlington County and is American Airlines' largest hub on the East Coast. 49 U.S.C. § 40116(f) bars a state from taxing the wages of an airline employee whose flight time is split across multiple states, unless the employee is a resident of that state or earns more than 50% of flight time there. For an Arlington-resident pilot or flight attendant flying for American (DCA hub), United (IAD hub), Delta, JetBlue, Southwest, Spirit, or Alaska, the analysis affects whether part-year resident filings in other states are required and whether the home state of Virginia controls. We run the § 40116 analysis case by case and prepare or contest the multi-state filings.

Salvadoran, Mexican, Filipino, Korean, and Bolivian FBAR

Arlington's Columbia Pike corridor, Westover, Buckingham, and Glencarlyn host one of the largest Salvadoran and Bolivian populations on the East Coast, alongside Mexican, Filipino, and Korean communities. FBAR exposure on Banco Agricola, Banco Cuscatlan, Banco de Comercio, BBVA Bancomer, Banamex, Santander, Banco Nacional de Bolivia, Banco Mercantil Santa Cruz, Banco BISA, the Land Bank of the Philippines, BDO Unibank, Bank of the Philippine Islands, Hana Bank, Woori Bank, KEB Hana Bank, and Shinhan Bank is steady. Remittance flows through Western Union, Remitly, and informal channels produce reporting questions under IRC § 6038D Form 8938 and FinCEN Form 105 on cash movements. We run IRS Streamlined Filing Compliance Procedures (Domestic and Foreign), ITIN applications, and treaty residency tiebreaker analyses regularly for the Columbia Pike, Buckingham, and Westover community.

Ethiopian-American, Eritrean-American, and Vietnamese FBAR

Arlington shares the Ethiopian and Eritrean East African corridor with Alexandria and Fairfax County, with notable concentrations along South George Mason Drive, Columbia Pike, and the Bailey's Crossroads boundary. The Vietnamese-American community runs through the Eden Center on the Falls Church side and bleeds into Arlington along Wilson Boulevard. FBAR exposure on Commercial Bank of Ethiopia, Awash Bank, Dashen Bank, Wegagen Bank, Bank of Abyssinia, the Housing and Savings Bank of Ethiopia, Eritrean institutions, Vietcombank, Vietinbank, BIDV, and Sacombank is steady. We run IRS Streamlined and IRC § 6038D Form 8938 cleanups for these communities.

Virginia Hospital Center 1099 physician practice

Virginia Hospital Center (1701 N. George Mason Drive, Arlington) is the principal hospital serving the county. Many attending and consulting physicians at Virginia Hospital Center run 1099 private-practice income on Schedule C alongside W-2 salary. Estimated-tax shortfalls under IRC § 6654 are routine, S-corporation reasonable-compensation issues compound the picture, and IRC § 199A qualified-business-income deduction limits for specified-service trade-or-business (SSTB) income come into play on high-earning practitioners. We handle the federal resolution and coordinate Virginia conformity through Va. Code § 58.1-322.

Nine common causes of tax debt for Arlington VA taxpayers

Patterns we see repeatedly in Arlington-based engagements. None of them are unusual — all of them are resolvable.

1. Underwithheld Amazon HQ2 RSU vest events

An Amazon HQ2 SDE-III, principal engineer, or senior manager at the 35% or 37% federal marginal bracket sees only 22% supplemental withholding on RSU vests. The shortfall, plus Virginia's 5.75% top marginal rate, produces a five-figure balance due the following April. Same fact pattern at Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, CACI, Leidos, General Dynamics, and Boeing Crystal City. An unreleased federal balance can flag a clearance reinvestigation under SF-86.

2. Federal-retirement and TSP early-withdrawal exposure

FERS and CSRS retirees, Pentagon SES members, and uniformed officers rolling Thrift Savings Plan balances or taking pre-59.5 distributions face IRC § 72(t) 10% additional tax, federal income tax on the gross distribution, and Virginia state income tax under Va. Code § 58.1-322. Form 1099-R reconciliation is a routine source of underpayments.

3. Combat-zone IRC § 112 and IRC § 7508 documentation gaps

Pentagon-stationed officers and Special Mission Unit personnel rotating to designated combat zones or qualified contingency operations receive automatic IRC § 112 exclusion on military pay earned in the zone and automatic IRC § 7508 extension of federal filing and payment deadlines (180 days plus zone-service days). Improper assessment of failure-to-file or failure-to-pay penalties during the extension period is routine; we document the zone-service dates and reverse the assessments.

4. Tri-state DC / VA / MD wage misallocation

An Arlington resident working in DC owes Virginia on the full wage income under Va. Code § 58.1-322 (DC cannot tax nonresidents on wage income). A Maryland-state employer mistakenly withholding Maryland tax produces a double-taxation assessment unwound through Md. Code § 10-703 reciprocity and Va. Code § 58.1-342. Misallocation by payroll systems is a recurring audit trigger.

5. Self-employment underpayment

Virginia Hospital Center attending physicians with private 1099 practices, defense-consulting independent contractors operating LLCs, government-affairs consultants on K Street, real-estate agents working Clarendon and Lyon Village, and tradespeople file Schedule C or K-1 income with no estimated-tax payments. The first IRS CP14 lands the following spring with penalties under IRC § 6654.

6. Business closure

When a defense-services LLC, a government-affairs consultancy, or a medical-services S-corp closes with unpaid Form 941 payroll-tax balances, IRC § 6672 follows the responsible officer personally — well after the entity is dissolved. Common in pre-revenue defense-tech startups that lost a Series A runway and in subcontractors that lost a prime relationship.

7. Divorce and joint-return fallout

A jointly-filed return tied to a now-former spouse's understatement leaves both parties liable until Innocent Spouse relief under IRC § 6015 is granted. Common when one spouse holds Amazon HQ2 RSU, defense-contractor equity, or tech-startup K-1 income and the other did not see the detail.

8. Cryptocurrency CP2000 surprise

Exchanges issue Form 1099-DA (introduced 2025), and the IRS computer matches reported gains. Missed basis records turn into ordinary-income assessments at the full sale price. Arlington's federal-IT, defense-cyber, and intelligence-community populations carry steady crypto exposure from the 2021-2024 cycle.

9. California or New York departing-resident audit

Amazon HQ2 transplants from Seattle, New York, and California, and the post-2020 wave of remote-work relocators settling in Arlington, frequently land in a Franchise Tax Board (California), Department of Taxation and Finance (New York), or Department of Revenue (Washington B&O) residency audit on the year of move. Domicile-versus-statutory-residency analysis, the six-factor California FTB Publication 1031 test, and the 183-day New York statutory residency rule are all in play. We coordinate the federal year-of-move return with the originating-state response, the Virginia part-year resident filing, and any stranded state withholding.

Eight tax liabilities that pull in Arlington VA taxpayers

Federal authority alongside the Virginia statute where there is a parallel.

Failure to file federal return

IRC § 6651(a)(1) imposes 5%/month, max 25%, plus interest under IRC § 6601. The Virginia mirror is Va. Code § 58.1-347 imposing a 6% per month penalty on unpaid Virginia tax for failure to file, capped at 30%. Deployed Pentagon-stationed officers receive automatic extension under IRC § 7508.

Failure to file Virginia state return

Va. Code § 58.1-347 imposes 6% per month on the unpaid tax for failure to file, capped at 30%, plus interest under Va. Code § 58.1-15. The Virginia Department of Taxation may issue a Notice of Assessment that triggers a 90-day administrative-appeal window under Va. Code § 58.1-1821. Arlington's 1% local sales tax piggyback is collected by the Department of Taxation alongside the 4.3% state and 0.7% NoVA Regional layers.

Federal § 7122 Offer in Compromise eligibility

All federal returns must be filed (IRC § 7122(d) compliance) and the offer must reflect Reasonable Collection Potential. The non-refundable $205 application fee may be waived for low-income certified offers.

Virginia sales-tax delinquency

Va. Code § 58.1-603 imposes the 4.3% state portion; Va. Code § 58.1-606 authorizes the local 1% rate (collected by Arlington County) and the additional 0.7% Northern Virginia Regional rate enacted by the 2013 transportation funding legislation, for a combined 6.0% Arlington rate. Va. Code § 58.1-1813 imposes personal liability on responsible persons for unpaid trust-fund sales tax — relevant to Clarendon, Ballston, and Crystal City restaurant operators, Westover and Cherrydale retailers along Washington Boulevard, and Columbia Pike food-service businesses.

Trust Fund Recovery Penalty

IRC § 6672 imposes 100% personal liability on responsible persons for unpaid trust-fund employment tax. Virginia applies a parallel responsible-person rule to withheld state income tax under Va. Code § 58.1-1813. Common on closed defense-services LLCs, government-affairs consultancies, restaurant groups, and small medical practices in the Arlington area.

Accuracy-related penalty

IRC § 6662 imposes 20% on substantial-understatement or negligence; IRC § 6663 imposes 75% on fraud. Defense is built on substantial authority, adequate disclosure, or reasonable cause — particularly relevant on IRC § 1202 QSBS positions held by defense-tech founders, IRC § 174 R&E capitalization disputes on classified work, IRC § 83(b) election positions on Amazon HQ2 restricted-stock grants, and 1031 exchange basis on Crystal City and Pentagon City investment property.

Virginia personal-property tax on vehicles and business equipment

Virginia is one of a small number of states that imposes an annual ad valorem personal-property tax on vehicles, boats, and business tangible personal property. Arlington County assesses the county's portion under Va. Code § 58.1-3500 et seq. through the Commissioner of the Revenue and bills it through the Treasurer at 2100 Clarendon Boulevard. Business taxpayers with under-reported tangible personal property face audit by the Commissioner of the Revenue; the appeal track runs through the Department of Taxation under Va. Code § 58.1-3983.1.

Transferee liability

IRC § 6901 lets the IRS pursue a transferee — a person who received property from a delinquent taxpayer — for the transferor's unpaid tax, up to the value of the transferred property.

What resolution can look like

Debt reduced

An accepted IRC § 7122 Offer in Compromise can resolve six-figure balances for cents on the dollar where Reasonable Collection Potential supports the offer. The acceptance rate sits around 33% nationally; preparation determines the outcome.

Penalties abated

First-Time Abate removes a single year of failure-to-file or failure-to-pay penalties for taxpayers with a clean three-year compliance record. Reasonable-cause abatement under IRM 20.1.1 reaches further when supported by documentation. Pentagon-stationed officers and Special Mission Unit personnel deployed to combat zones reverse improper assessments through IRC § 7508 documentation.

Lien released or withdrawn

Once a debt is paid in full, the IRS releases the Notice of Federal Tax Lien within 30 days per IRC § 6325(a). On an Installment Agreement of $25,000 or less, lien withdrawal under Form 12277 can be requested to clear title with the Arlington County Circuit Court Clerk — a material step for clearance-holders whose SF-86 reinvestigation is coming up.

Sample tax-resolution outcomes

Anonymized client matters drawn from our $100M+ aggregate tax-relief record across 2,000+ resolved cases.

Year	Tax debt	Resolution	Final outcome
2024	$152,296	IRC § 6159 Installment Agreement	Accepted at $25/month, partial-pay
2024	$138,296	Streamlined Installment Agreement	Accepted at $25/month
2023	$130,555	Partial-Pay Installment Agreement	Accepted at $50/month
2023	$128,206	IRC § 6159 Installment Agreement	Accepted at $25/month
2022	$116,451	Partial-Pay Installment Agreement	Accepted at $50/month

Past results do not guarantee future outcomes. Each tax case is unique. Results depend on the specific facts of the matter, including the taxpayer's financial condition, compliance history, and the discretion of the Internal Revenue Service and the Virginia Department of Taxation.

Why Victory Tax Lawyers for an Arlington VA federal-tax case

Victory Tax Lawyers is California-Bar-admitted, not Virginia-Bar-admitted. That distinction matters — and it does not block our work. The U.S. Tax Court is a federal court with nationwide jurisdiction; an attorney admitted to that court may petition and try cases at any of its trial locations, including Washington, D.C. at the National Courts Building — the closest Tax Court venue to Arlington, four miles north of Courthouse station. IRS administrative practice runs on Form 2848 Power of Attorney, which is accepted from any attorney in good standing with any state bar plus an active Centralized Authorization File number. Most of our Arlington clients never need a separately admitted Virginia attorney because the case is, at its core, federal.

For administrative work before the Virginia Department of Taxation — protests, audit responses, settlement requests under Va. Code § 58.1-105, and installment-agreement requests — we file Virginia Form PAR-101 Power of Attorney and handle the matter remotely. When a case must move to a Virginia Circuit Court refund suit under Va. Code § 58.1-1825 or to an appeal before the Court of Appeals of Virginia, we coordinate with locally admitted Virginia counsel under a co-counsel arrangement. The federal portion of the engagement, which is usually the bigger exposure given the Pentagon, CIA, Amazon HQ2, and defense-contractor concentration in Arlington County, stays with us.

What distinguishes our firm: a California-Bar-admitted managing attorney with active U.S. Tax Court admission, an Enrolled Agent on staff for IRS administrative work, a 5.0 / 72-review Google rating, and $100M+ in cumulative tax relief secured across 2,000+ resolved matters. No marketing claim of being a Virginia-licensed firm — we are not. A factually accurate offer of federal tax representation, available to any Arlington VA taxpayer, at the same standard we apply to a Los Angeles client. Our 100% remote workflow runs through a secure document portal — you never have to drive to Robertson Boulevard, which matters for active-clearance holders who prefer to keep tax matters off any commute log or visitor record.

Our seven-step process for Arlington VA clients

Free consultation

A 30-minute call with a tax attorney to scope your matter, identify deadlines, and decide whether engagement is the right move.

Engagement letter

A written scope, fee structure, and conflict check. Flat fees for administrative resolution; hourly or hybrid for litigation.

Form 2848 and CAF

We file the federal Power of Attorney with the IRS and Form PAR-101 with the Virginia Department of Taxation, register on the CAF system, and step in as the contact of record.

Transcript and CSED analysis

We pull IRS account transcripts via Form 8821, calculate each year's CSED under IRC § 6502, and identify tolling events — including overseas-absence tolling for CIA tours, Foreign Service-tracked postings, and Pentagon combat-zone rotations.

Strategy memo

A written summary: the resolution path (OIC, IA, CNC, audit response, CDP, Tax Court), the timeline, and the realistic outcome range.

Filing and negotiation

We file the operative document — Form 656, Form 433-A(OIC), Form 9423, Form 12153, or a Virginia administrative appeal under Va. Code § 58.1-1821 — and handle every IRS and Department of Taxation contact.

Compliance monitoring

After resolution we monitor compliance through the OIC five-year terms or the IA term, file future returns, and prevent default.

Two collection clocks: federal CSED and Virginia's seven-year statute

The IRS has ten years from the date of assessment to collect a federal tax under IRC § 6502. After the Collection Statute Expiration Date, the debt is extinguished by operation of law. The clock pauses ("tolls") when an Offer in Compromise is pending, when a Collection Due Process petition is filed, during bankruptcy, when an installment agreement is requested, and when the taxpayer is outside the United States for six months or more — a common tolling event for CIA officers on cover assignments, Pentagon-stationed military officers on operational deployment, Foreign Service officers tracked through the State Department, and DoD contractor executives on global assignments. Combat-zone service tolls separately under IRC § 7508 and IRC § 7508A as the Secretary designates.

Virginia runs a parallel state collection rule. Va. Code § 58.1-1812 sets a three-year limitation on assessment (six years for substantial omission of more than 25% of reported gross income; no limit for fraud or non-filing). Once the assessment is final and any administrative appeal under Va. Code § 58.1-1821 has run its course, the Department of Taxation's right to collect under a memorandum of lien recorded with the Arlington County Circuit Court Clerk runs for seven years under Va. Code § 58.1-1804, with renewal available by re-recording. Many Arlington taxpayers carry a federal CSED that will run out before the Virginia collection statute expires — or vice versa. Pull both records and know both dates before agreeing to any payment plan or amended return that could restart a clock.

Arlington VA tax authorities and venues

A working knowledge of the tribunals, agencies, and field offices that touch an Arlington matter is what separates an answered Notice from a wage levy. Below is the working list our firm uses on every Arlington VA engagement.

Internal Revenue Service — Vienna and Washington TAC

The federal tax authority, at irs.gov. Arlington does not host a direct IRS Taxpayer Assistance Center; the closest options are the Vienna TAC at 5034 Backlick Road, Vienna VA 22151 — about eight miles west of Arlington Courthouse — and the Washington TAC at 1111 Constitution Avenue NW, Washington DC 20224, about five miles north. Appointments are required; verify the operating address and hours on irs.gov before traveling. Most administrative work runs through the centralized IRS service centers, not the TAC.

U.S. Tax Court — Washington trial sessions

The U.S. Tax Court holds regular trial sessions for Northern Virginia taxpayers in Washington, D.C. at the National Courts Building, 400 Second Street NW — about four miles north of Arlington's Courthouse station via the Orange or Blue Line Metro to Judiciary Square. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline runs from the IRS Statutory Notice of Deficiency under IRC § 6213(a).

Virginia Department of Taxation — Richmond headquarters and Northern Virginia District

The state tax authority, at tax.virginia.gov. Headquartered at 1957 Westmoreland Street, Richmond VA 23230, with a Northern Virginia District Office handling Northern Virginia case load. Administers the 2.0-5.75% graduated personal income tax under Va. Code § 58.1-320, the 6.0% corporate income tax under Va. Code § 58.1-400, the 4.3% state sales tax under Va. Code § 58.1-603 (with the additional 0.7% Northern Virginia Regional rate authorized under Va. Code § 58.1-603.1 and the 1.0% local Arlington piggyback under Va. Code § 58.1-606), withholding tax, the Virginia Pass-Through Entity Tax election under Va. Code § 58.1-390.3, and the administrative track for settlement under Va. Code § 58.1-105.

Arlington County Treasurer and Commissioner of the Revenue

Arlington County is one of Virginia's consolidated counties — there is no separate Arlington City overlay. The Arlington County Treasurer sits at 2100 Clarendon Boulevard, Suite 215, Arlington VA 22201. The Arlington County Commissioner of the Revenue sits at 2100 Clarendon Boulevard, Suite 200. The Arlington County Department of Real Estate Assessment sits at 2100 Clarendon Boulevard, Suite 200 as well. The Commissioner of the Revenue assesses local business license tax (BPOL), business tangible personal property, machinery and tools, and the vehicle personal-property tax under Va. Code § 58.1-3500 et seq. The Treasurer bills and collects those taxes plus county real-estate tax. Appeals of local-tax assessments run first to the Commissioner, then to the Tax Commissioner of Virginia under Va. Code § 58.1-3983.1, then to the Arlington County Circuit Court under Va. Code § 58.1-3984.

U.S. District Court — Eastern District of Virginia, Alexandria Division

Arlington sits within the Alexandria Division of the U.S. District Court for the Eastern District of Virginia — the so-called "Rocket Docket," one of the fastest-moving federal trial courts in the country. The courthouse is the Albert V. Bryan Sr. United States Courthouse at 401 Courthouse Square, Alexandria VA 22314, about five miles south of Courthouse Metro. Refund suits filed after payment of tax and exhaustion of administrative remedies under IRC § 7422 may be brought in the Alexandria Division or alternatively in the U.S. Court of Federal Claims in Washington, D.C.

Arlington County Circuit Court Clerk

Located at 1425 North Courthouse Road, Suite 6700, Arlington VA 22201. The Clerk's office records Notices of Federal Tax Lien filed by the IRS and Virginia memoranda of lien filed by the Department of Taxation under Va. Code § 58.1-1804 that encumber Arlington property in Rosslyn, Courthouse, Clarendon, Ballston, Virginia Square, Crystal City, Pentagon City, Aurora Highlands, Shirlington, Westover, Cherrydale, Lyon Park, Lyon Village, Buckingham, Fairlington, Glencarlyn, and the rest of Arlington County. Title searches for Arlington real-estate transactions pull from this record.

Arlington is a consolidated county — no independent-city overlay

Arlington VA is a county, not an independent city. Although Virginia recognizes 38 independent cities (Alexandria, Richmond, Norfolk, Virginia Beach, Roanoke, Charlottesville, and others) as politically separate from any county under Va. Const. Art. VII § 1, Arlington went the opposite direction: in 1932 the Virginia General Assembly consolidated all municipal-and-county functions into a single Arlington County government covering the entire 26 square miles formerly known as Alexandria County. There is no separate "Arlington City" sitting inside the county; the County Board, the Treasurer, the Commissioner of the Revenue, the Circuit Court, and the assessing functions are all county-level. The practical tax stack for an Arlington VA resident: IRS, Virginia Department of Taxation, and Arlington County local taxes — nothing layered at a city level above it.

IRS Independent Office of Appeals

The administrative-appeals body within the IRS that resolves cases without litigation. Arlington cases run through the Appeals offices serving the Mid-Atlantic region. Filings: Form 9423 (collection appeal) and Form 12153 (CDP). Page: irs.gov/appeals.

Taxpayer Advocate Service — Virginia

An independent organization within the IRS that helps when normal channels stall. The Local Taxpayer Advocate office serving Virginia handles Arlington cases. Page: taxpayeradvocate.irs.gov.

Defense Counterintelligence and Security Agency

The federal agency that conducts background investigations and adjudications for security clearances across the Pentagon, the defense-contractor base, and most of the cleared federal workforce. Located at 27130 Telegraph Road, Quantico VA 22134. For Arlington Pentagon civilians, Pentagon contractors at Lockheed Martin, Northrop Grumman, Booz Allen Hamilton, CACI, Leidos, and SAIC, and DARPA-affiliated researchers, federal tax-debt resolution is the cure path for SF-86 Section 26 financial-considerations findings. We document the IRS resolution so the package is in hand before reinvestigation.

Virginia State Bar referral resource

When a matter requires a Virginia-Bar-admitted attorney for circuit-court litigation, we coordinate with locally admitted Virginia counsel. The Virginia State Bar Lawyer Referral Service at vsb.org is the official referral channel. Our firm maintains working relationships with Northern Virginia tax-litigation practices and refers cases that require formal Virginia-court appearance.

Court of Appeals of Virginia

The intermediate appellate court of Virginia, expanded in 2022 to hear all civil appeals (including state-tax refund-suit appeals from the Circuit Court). Located at 109 North 8th Street, Richmond VA 23219. Decisions are further appealable to the Supreme Court of Virginia on petition. We coordinate Virginia appellate work through local counsel.

Speak with a tax attorney about your Arlington VA matter

Free consultation, attorney-client privileged, no obligation. If a Notice of Deficiency, a Final Notice of Intent to Levy, or a Virginia Department of Taxation Notice of Assessment is in front of you, the deadline to respond is real and short — call today.

Call (800) 883-8301 Free Consultation

Frequently asked questions — Arlington VA tax

Is Arlington a city or a county?

Arlington VA is a county — the only one in Virginia where the entire jurisdiction is run as a single consolidated county government. Unlike most of Virginia, where a city sits inside a county, and unlike Alexandria, Richmond, Norfolk, and Virginia Beach (which are independent cities separate from any county), Arlington went the other direction: the Virginia General Assembly in 1932 consolidated all municipal-and-county functions into one Arlington County government covering the entire 26 square miles formerly called Alexandria County. There is no separate "Arlington City" overlay. For tax purposes the local stack is one layer: the Arlington County Treasurer at 2100 Clarendon Boulevard, Suite 215, the Commissioner of the Revenue at 2100 Clarendon Boulevard, Suite 200, and the Department of Real Estate Assessment at the same address.

What is the combined Virginia sales-tax rate in Arlington County?

6.0% in total. Virginia charges a 4.3% state sales tax under Va. Code § 58.1-603. The Northern Virginia Regional rate adds 0.7% under Va. Code § 58.1-603.1, enacted as part of the 2013 transportation funding legislation for the NoVA and Hampton Roads regions. Arlington adds a 1.0% local piggyback under Va. Code § 58.1-606. Total: 6.0%. The combined Arlington rate matches Alexandria, Fairfax County, Falls Church, and the rest of Northern Virginia, and is higher than the 5.3% baseline charged in most other parts of Virginia (which lack the 0.7% regional add-on).

Where is the closest U.S. Tax Court trial location to Arlington?

Washington, D.C. trial sessions at the National Courts Building, 400 Second Street NW — about four miles north of Arlington's Courthouse station via the Orange or Blue Line Metro to Judiciary Square. An Arlington taxpayer requests Washington as the trial location when filing the Tax Court petition. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline from the IRS Statutory Notice of Deficiency under IRC § 6213(a) is jurisdictional — a single day late and the federal assessment becomes final.

I work at the Pentagon and hold a TS/SCI clearance — will federal tax debt affect my clearance?

Federal tax debt is a documented adverse factor under SF-86 Section 26 financial considerations and Adjudicative Guideline F. An unreleased Notice of Federal Tax Lien, an active wage levy, or a recurring failure-to-file pattern can trigger Defense Counterintelligence and Security Agency review at the Pentagon, a parallel review at the CIA Office of Security for Langley personnel, an NSA security review at Fort Meade, or an FBI Personnel Security Division review. The cure path: documented IRS resolution (an accepted Offer in Compromise, an active Installment Agreement in good standing, Currently Not Collectible status, or full pay-down) with the resolution letter retained in your security file. We sequence the resolution so the documentation is in hand before your next periodic reinvestigation. The conversation is sensitive; we coordinate with the Facility Security Officer or industrial-security representative where appropriate.

I work at Amazon HQ2 in Crystal City and have RSUs — why did I owe so much tax this year?

RSU vest events are taxed as W-2 ordinary income at the supplemental wage withholding rate, which is currently 22% federal on amounts up to $1 million per year (37% above). If your actual marginal federal rate is 32%, 35%, or 37% — common for senior SDEs, principal engineers, senior managers, and L7-L10 staff at Amazon — you are underwithheld by 10 to 15 percentage points on every vest. Add Virginia's 5.75% top marginal rate and a single year of vesting can produce a $30,000 to $150,000+ balance due. The fix is W-4 adjustment plus quarterly Form 1040-ES under IRC § 6654. Same fact pattern applies at Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, CACI, Leidos, General Dynamics, and Boeing Crystal City. For clearance holders, the unreleased federal balance is a separate concern under SF-86.

I am a CIA officer commuting to Langley — how do you handle a clearance-sensitive tax case?

CIA personnel have specific concerns: Section 26 financial-considerations review under SF-86, Office of Security adjudication, the polygraph reinvestigation cycle, and the need to keep tax matters off any commute log or visitor record at Langley. We run a 100% remote engagement through a secure document portal. No office visits. We handle Form 2848 filing, IRS communication, OIC or IA submission, and CDP filings entirely from California. For officers on cover assignments overseas, the IRC § 911 Foreign Earned Income Exclusion analysis is layered with the cover-allowance income reconciliation; we coordinate the federal return without disturbing classified-status documentation. We do not, and cannot, advise on the classified portion of any cover assignment — that side stays inside the agency. Our scope is the tax-resolution and IRS-communication side.

I am a Pentagon-stationed officer who deployed to a combat zone — how do IRC § 112 and § 7508 work?

IRC § 112 excludes from federal gross income the military pay earned by a member of the armed forces in a designated combat zone (and for limited periods after wound or hospitalization). IRC § 7508 automatically extends federal filing and payment deadlines by 180 days plus the number of days spent in the zone, for both tax returns and most tax-related actions including IRS notices and collection deadlines. Special Mission Unit personnel, Joint Special Operations Command rotations, and most named-operation deployments qualify. Improper assessment of failure-to-file or failure-to-pay penalties during the § 7508 extension period is a routine source of IRS notices that we reverse with zone-service documentation. Virginia generally conforms under Va. Code § 58.1-322 starting from federal taxable income, which carries the federal exclusion through to the state return.

I just moved to Arlington from Seattle / New York / California for Amazon HQ2 — what state tax problems should I expect?

A few. (1) Part-year resident filings in both states for the year of move, with proper income allocation by date and source. (2) Stranded prior-state withholding that needs to be recovered through the originating-state nonresident or part-year return. (3) For California departures, the Franchise Tax Board's domicile-versus-statutory-residency analysis under Publication 1031 and the six-factor presumption of continuing domicile if certain ties remain — common when an Amazon-HQ2 relocator keeps a California home, a California vehicle registration, or a California professional license. (4) For New York departures, the 183-day statutory residency rule and the "permanent place of abode" test under N.Y. Tax Law § 605(b)(1)(B). (5) For Washington State departures, B&O tax on any continuing Washington-source self-employment. (6) Virginia part-year resident filing on Form 760PY covering the post-move period. We coordinate the federal year-of-move return with the originating-state response and the Virginia part-year filing.

I live in Arlington and work in DC — where do I file my income tax?

Arlington-resident, DC-employee: file only a Virginia resident return (Form 760) reporting all wage income. Federal law (Pub. L. 93-198) bars the District of Columbia from taxing nonresidents on wage income earned in DC, so no DC return is required on the wages. DC employers must withhold Virginia state income tax from the wages of Virginia-resident employees if set up correctly. If DC tax was mistakenly withheld, the Virginia resident files DC Form D-40B to claim the refund. For an Arlington resident working in Maryland, the Maryland-Virginia reciprocity agreement under Md. Code § 10-703 and Va. Code § 58.1-342 limits wage tax to Virginia only. Misallocation by employer payroll systems across DC, Virginia, and Maryland is one of the most common audit triggers we see in Arlington engagements.

Can a California-Bar-admitted attorney represent me in Arlington VA?

For federal IRS matters — yes. The IRS accepts Form 2848 Power of Attorney from any attorney in good standing with any state bar. The U.S. Tax Court is a single federal court with nationwide jurisdiction; an attorney admitted to that court may represent a taxpayer at any Tax Court trial location, including Washington, D.C. which covers Arlington. For Virginia Department of Taxation administrative work, we file Form PAR-101 Power of Attorney and handle the matter remotely. For formal litigation in a Virginia Circuit Court under Va. Code § 58.1-1825, an appearance before the Court of Appeals of Virginia, or an Arlington County Circuit Court local-tax appeal under Va. Code § 58.1-3984, we co-counsel with locally admitted Virginia attorneys. Most engagements — audit defense, OIC, IA, levy release, Tax Court — are federal and stay entirely with our firm.

I run a Crystal City or Pentagon City short-term rental on Airbnb / VRBO — how is it taxed?

The IRC § 280A vacation-home rules control. If you personally use the property for the greater of 14 days or 10% of rental days, the property is treated as a personal residence and rental losses are limited; under 15 days of rental use per year, rental income is excluded under the so-called "Augusta rule" (IRC § 280A(g)). For active STR hosts who materially participate (cleaning, guest communication, maintenance), the operation reports on Schedule C with self-employment tax under IRC § 1401, qualified-business-income deduction analysis under IRC § 199A, and IRC § 469 material-participation rules. Arlington County requires short-term-rental registration with the Department of Community Planning, Housing, and Development and collects the Transient Occupancy Tax through the Treasurer. We coordinate the federal classification, the Virginia conformity layer, and the county-level filing.

I have foreign bank accounts in El Salvador / Mexico / Philippines / Korea / Bolivia / Ethiopia — what is my FBAR exposure?

If the aggregate value of your non-U.S. financial accounts exceeded $10,000 at any point during the calendar year, you are required to file FinCEN Form 114 (the FBAR). Arlington's Columbia Pike, Westover, Buckingham, and Glencarlyn corridors host one of the largest Salvadoran and Bolivian populations on the East Coast (Banco Agricola, Banco Cuscatlan, Banco de Comercio, Banco Nacional de Bolivia, Banco Mercantil Santa Cruz, Banco BISA), substantial Mexican (BBVA Bancomer, Banamex, Santander), Filipino (BDO Unibank, Bank of the Philippine Islands, Land Bank of the Philippines), Korean (Hana Bank, Woori, KEB Hana, Shinhan), Ethiopian and Eritrean (Commercial Bank of Ethiopia, Awash Bank, Dashen Bank, Wegagen Bank, Bank of Abyssinia), and Vietnamese (Vietcombank, Vietinbank, BIDV) communities. FBAR penalties under 31 U.S.C. § 5321 can reach $10,000 per non-willful violation per year and 50% of the account balance per willful violation. The IRS Streamlined Filing Compliance Procedures (Domestic and Foreign) provide reduced-penalty correction paths. IRC § 6038D Form 8938 thresholds apply separately. We run these cleanups regularly for the Arlington community.

I'm a Reagan National (DCA) based pilot or flight attendant — what is my state-tax exposure?

49 U.S.C. § 40116(f) bars a state from taxing the wages of an airline employee whose flight time is split across multiple states, unless the employee is a resident of that state or earns more than 50% of flight time in that state. For an Arlington-resident pilot or flight attendant flying for American (DCA hub), United (IAD hub), Delta, JetBlue, Southwest, Spirit, or Alaska, the residence state — Virginia — controls; no other state can tax the wages regardless of where the routes operate. State withholding by an airline employer in a non-residence state is recoverable. If you genuinely earn more than 50% of flight time in a single non-residence state, that state can tax the wages and the analysis becomes more complex. We run the § 40116 analysis case by case and prepare or contest the multi-state filings.

What is Virginia's collection statute of limitations?

Va. Code § 58.1-1812 gives the Department of Taxation three years from the original return due date to assess Virginia income tax (six years for substantial omission of more than 25% of reported gross income, with no limit for fraud or unfiled returns). Once an assessment is final and any administrative appeal under Va. Code § 58.1-1821 has run, the Department's right to collect under a recorded memorandum of lien runs for seven years under Va. Code § 58.1-1804, with renewal available by re-recording. The federal CSED under IRC § 6502 is a separate ten-year clock running from the federal assessment date.

Can I be audited by both the IRS and the Virginia Department of Taxation for the same year?

Yes. The IRS and the Virginia Department of Taxation operate independently and share information through the IRS-state exchange program. A federal audit adjustment is routinely reported to Virginia under the state's federal-change reporting rule (Va. Code § 58.1-311 requires a Virginia taxpayer to report any federal change to Virginia within one year of the final federal determination), and vice versa. We coordinate the two audits to prevent inconsistent positions on the federal record from costing you on the Virginia return.

What is the Virginia Pass-Through Entity Tax election under § 58.1-390.3?

Va. Code § 58.1-390.3, enacted in 2022 and amended through 2024, allows eligible partnerships and S corporations to elect to pay Virginia income tax at the entity level rather than passing through to individual owners. The entity-level payment is deductible at the federal level under IRS Notice 2020-75, providing a federal SALT-cap workaround for Virginia residents who own pass-through entities. The election is made annually on the Virginia return. Arlington-resident owners of consulting LLCs, defense-services S corporations, government-affairs partnerships, and medical-services PCs frequently benefit. We coordinate the election with federal Form 1065 or Form 1120S preparation and document the PTET payment on the owner's Virginia individual return as a refundable credit under Va. Code § 58.1-390.4.

Can the IRS levy my Arlington bank account or wages?

Yes — after a Final Notice of Intent to Levy (CP90 or LT11) and expiration of the 30-day Collection Due Process window under IRC § 6330, the IRS may levy bank accounts at Burke & Herbert Bank, Truist, Wells Fargo, Bank of America, PNC, Capital One, M&T, or any Virginia-chartered or federal institution, and serve wage levies on Arlington-area employers including the Pentagon civilian payroll through DFAS, Amazon HQ2 payroll, Lockheed Martin Arlington, Northrop Grumman, Booz Allen Hamilton, CACI International, Leidos, General Dynamics, Boeing Crystal City, MITRE, SAIC, and Virginia Hospital Center. A timely Form 12153 CDP request halts collection while the case is reviewed by Appeals. After a CDP determination, the taxpayer has 30 days to petition the U.S. Tax Court under IRC § 6330(d)(1). Virginia issues parallel state tax liens under Va. Code § 58.1-1804 that work through Arlington County Circuit Court Clerk filings.

What if I have unfiled returns going back several years?

The IRS Voluntary Filing Compliance policy and IRM 5.1.11.6 generally require the last six years of returns to bring a taxpayer back into compliance. Filing prior-year returns is the first step before any OIC, IA, or CNC request — IRC § 7122(d) compliance is a prerequisite for a federal Offer. Refunds claimed on returns filed more than three years after the original due date are time-barred under IRC § 6511(b)(2). Virginia follows a parallel filing-compliance posture; the Department of Taxation may assess based on the federal-change reporting rule under Va. Code § 58.1-311 or estimate tax under Va. Code § 58.1-111 when a taxpayer fails to file. For Pentagon, CIA, DIA, NSA, and intelligence-community clearance holders, a multi-year unfiled-return pattern is the single most common factor that triggers an SF-86 financial-considerations review.

Will hiring a tax attorney stop IRS collection action immediately?

Once Form 2848 is on file, the IRS routes all communication through the attorney and stops contacting the taxpayer directly. Active levies are not automatically lifted by the POA filing alone — release requires either a financial showing under IRC § 6343, a CDP filing under IRC § 6330, or an installment-agreement / OIC submission that triggers the IRC § 6331(k) collection bar. We move on those concurrently when a levy is in place. Virginia state collection follows a similar pattern: a Form PAR-101 routes Department of Taxation contact, and a pending Virginia administrative appeal under Va. Code § 58.1-1821 pauses state collection enforcement.

About the author

This page was written and reviewed by Parham Khorsandi, Esq., Managing Attorney of Victory Tax Lawyers, LLP. Cal Bar #266658. Admitted to practice before the United States Tax Court. Mr. Khorsandi has resolved over 2,000 federal tax matters and secured more than $100 million in tax relief for clients across all 50 states.

Page last reviewed: May 26, 2026. Editorial standard: every federal-statute citation links to law.cornell.edu (Legal Information Institute, Cornell Law School). Every Virginia statute citation references the Code of Virginia. Every administrative authority links to its primary .gov source. Material changes to the law are reflected within 30 days of effective date.

Attorney Advertising. This page is provided by Victory Tax Lawyers, LLP for general informational purposes only. Nothing on this page constitutes legal advice, creates an attorney-client relationship, or substitutes for consultation with a licensed attorney about your specific tax matter. Prior results described or referenced do not guarantee a similar outcome. Each tax case turns on its individual facts, applicable law, and the discretion of the Internal Revenue Service, the Virginia Department of Taxation, the U.S. Tax Court, a Virginia Circuit Court, or other adjudicating body.

Victory Tax Lawyers, LLP is California-Bar-admitted with its principal office at 1100 S. Robertson Blvd., Los Angeles, CA 90035. The firm represents clients in federal tax matters nationwide via Form 2848 Power of Attorney and admission to the United States Tax Court. The firm is not admitted to practice in the courts of the Commonwealth of Virginia; where a Virginia state-court appearance or Virginia Circuit Court refund-suit litigation is required, the firm associates with locally admitted counsel.

IRS Circular 230 Disclosure: The discussion of U.S. federal tax issues on this page is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed under the Internal Revenue Code or for promoting, marketing, or recommending to another party any tax-related matters addressed. For specific tax advice, consult independent tax counsel.

Authorities cited on this page

26 U.S.C. § 7122 — Federal Offer in Compromise
26 U.S.C. § 6159 — Installment Agreements
26 U.S.C. § 6321 — Federal Tax Lien
26 U.S.C. § 6325 — Lien Release and Discharge
26 U.S.C. § 6331 — Levy and Distraint
26 U.S.C. § 6343 — Release of Levy
26 U.S.C. § 6502 — Collection Statute Expiration
26 U.S.C. § 6213 — Tax Court Petition Window
26 U.S.C. § 6320 — CDP for Liens
26 U.S.C. § 6330 — CDP for Levies
26 U.S.C. § 6651 — Failure-to-File and Failure-to-Pay
26 U.S.C. § 6672 — Trust Fund Recovery Penalty
26 U.S.C. § 6015 — Innocent Spouse Relief
26 U.S.C. § 7345 — Passport Revocation
26 U.S.C. § 174 — R&E Capitalization
26 U.S.C. § 1202 — Qualified Small Business Stock
26 U.S.C. § 112 — Combat-Zone Compensation Exclusion
26 U.S.C. § 7508 — Time-Limit Postponement for Combat-Zone Service
26 U.S.C. § 280A — Vacation-Home / Short-Term-Rental Rules
26 U.S.C. § 83 — Property Transferred in Connection with Performance of Services (§ 83(b) election)
26 U.S.C. § 422 — Incentive Stock Options (ISO)
26 U.S.C. § 55 — Alternative Minimum Tax
26 U.S.C. § 121 — Primary-Residence Exclusion
26 U.S.C. § 1031 — Like-Kind Exchange
26 U.S.C. § 911 — Foreign Earned Income Exclusion
26 U.S.C. § 6038D — Foreign Financial Asset Reporting (Form 8938)
49 U.S.C. § 40116 — State-tax limits on airline employees
Va. Code § 58.1-320 — Virginia personal income tax rates (2.0% to 5.75%)
Va. Code § 58.1-322 — Virginia individual income computation (federal conformity)
Va. Code § 58.1-342 — Virginia-Maryland reciprocity on wage income
Va. Code § 58.1-390.3 — Virginia Pass-Through Entity Tax election
Va. Code § 58.1-390.4 — Virginia PTET refundable credit
Va. Code § 58.1-400 — Virginia corporate income tax (6.0%)
Va. Code § 58.1-603 — Virginia state sales tax (4.3%)
Va. Code § 58.1-603.1 — Northern Virginia Regional sales tax (0.7%)
Va. Code § 58.1-606 — Local sales-tax piggyback (1.0% Arlington)
Va. Code § 58.1-105 — Tax Commissioner settlement authority (state OIC)
Va. Code § 58.1-311 — Federal-change reporting to Virginia
Va. Code § 58.1-347 — Virginia late-filing and late-payment penalties
Va. Code § 58.1-1804 — Virginia memorandum of lien (state tax lien)
Va. Code § 58.1-1812 — Virginia limitations on assessment
Va. Code § 58.1-1813 — Virginia responsible-person liability (trust-fund)
Va. Code § 58.1-1821 — Virginia administrative appeal to the Tax Commissioner
Va. Code § 58.1-1825 — Virginia Circuit Court refund-suit remedy
Va. Code § 58.1-1827 — Virginia cost recovery in tax proceedings
Va. Code § 58.1-1845 — Virginia Taxpayer Bill of Rights
Va. Code § 58.1-3500 et seq. — Virginia tangible personal-property tax
Va. Code § 58.1-3983.1 — Local tax appeal to the Tax Commissioner
Va. Code § 58.1-3984 — Local tax appeal to Circuit Court
Md. Code, Tax-General § 10-703 — Maryland-Virginia reciprocity (Maryland side)
31 U.S.C. § 5314 / § 5321 — FBAR (FinCEN Form 114) reporting and penalties