Sec. 8-1.2. Limitation on assessment

Tax Law, § 1083

(a) Except as otherwise provided in this section, any tax imposed by article 9-A shall be assessed within three years after the report was filed. The time a report is deemed filed is the prescribed due date or actual date filed, whichever is later.

(b) Exceptions to the limitation in subdivision (a) of this section are as follows:

(1) The tax may be assessed at any time if:

(i) no report is filed;

(ii) a false or fraudulent report is filed with intent to evade tax; or

(iii) the taxpayer fails to file a report or an amended report as required by sections 6-1.3 and 6-1.4 of this Title in respect to an increase in Federal taxable income or an increase in Federal tax or in respect to a change or correction or renegotiation, or computation or recomputation of tax.

(2) Where, before the expiration of the time prescribed in this section for the assessment of tax, both the Tax Commission and the taxpayer have consented in writing to an extension of time for such assessment, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(3) If the taxpayer files a report or amended report as required by sections 6-1.3 and 6-1.4 of this Title in respect to an increase in Federal taxable income or Federal tax, or in respect of a change or correction or renegotiation, or computation or recomputation of tax, 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 report) may be made at any time within two years after such report or amended report was filed. The amount of such assessment of tax shall not exceed the amount of the increase in tax attributable to such Federal change or correction or renegotiation, or computation or recomputation of tax. The amount of tax attributable to such Federal change or correction or renegotiation, or computation, means the amount determined by recomputing each of the alternative taxes for measuring the tax imposed under article 9-A, taking into account the item or items resulting in the Federal change or correction or renegotiation, or computation or recomputation for the taxable year. This limitation does not affect other limitations.

(4) If a deficiency of tax is attributable to the application of a net operating loss carry-back or a net capital loss carry-back, it may be assessed within the limitations on assessment for the loss year.

(5) An erroneous refund shall be considered an underpayment of tax as of the date of the refund. The assessment of deficiency can be made within two years of such refund, or within five years of such refund if it appears that any part of the refund was induced by fraud or misrepresentation of a material fact.

(6) After the report has been filed, a taxpayer or a fiduciary representing the taxpayer may make a written request that the tax shall be assessed within 18 months, but the assessment shall not be more than three years after the report was filed, except as otherwise provided in this subdivision and subdivision (c) of this section. This paragraph shall not apply unless the taxpayer meets one of the following conditions:

(i) such written request notifies the Tax Commission that the taxpayer contemplates dissolution at or before the expiration of the 18-month period, the dissolution is in good faith begun before the end of the 18-month period, and the dissolution is completed;

(ii) such written request notifies the Tax Commission that a dissolution has begun in good faith and the dissolution is completed; or

(iii) a dissolution has been completed at the time of the written request.

(7) No change of the allocation of income or capital upon which the taxpayer's return (or any additional assessment) was based shall be made during the additional period of limitation allowed in the case of nonfiling of a report of a Federal change or correction or renegotiation, or computation or recomputation (see subparagraph [1][iii] of this subdivision), or a report of a Federal change or correction or renegotiation, or computation or recomputation (see paragraph [3] of this subdivision), or a deficiency based on a net operating loss carry-back or a net capital loss carry-back (see paragraph [4] of this subdivision). Under the same circumstances, a petition for the redetermination of a deficiency or a notice of deficiency does not open the allocation factor. The allocation of income or capital upon which the taxpayer's return was based can always be changed within the three-year period described in subdivision (a) of this section.

(8) The tax may be assessed within three years after:

(i) the filing of the report containing information reporting the change in use of an industrial waste treatment facility or of an air pollution control facility during the taxable year that the change in use occurs;

(ii) the filing of the report for the taxable year during which the industrial waste treatment facility or air pollution control facility is completed and the taxpayer fails to obtain a permanent certificate of compliance;

(iii) the Tax Commission receives notice of the revocation of a certificate of compliance in respect to an air pollution control facility from the taxpayer or as required by section 19-0309 of the Environmental Conservation Law, whichever notice is received earlier; or

(iv) the filing of the report for the taxable year during which a revocation or modification occurs in its certificate of eligibility (see section 5-1.5 of this Title—Changes in the certificate of eligibility).

(c) Tax may be assessed at any time within six years after filing the report if the taxpayer omits from gross income an amount properly includible which is in excess of 25 percent of the amount of gross income stated in the report.

(d) After the mailing of the notice of deficiency, the running of the period of limitations on assessment or collection of tax or other amount (or a transferee's liability) is suspended for the period between the date of filing a petition and the date of the Tax Commission decision.

(e) The filing of an information report on form CT-245 does not start the period of limitation within which the Tax Commission may assess the tax.