(a)Except as otherwise provided in this section
and section 2.5 of this chapter, the department may not issue a
proposed assessment under section 1 of this chapter more than three (3)
years after the latest of the date the return is filed, or the following:
(1)The due date of the return.
(2)In the case of a return filed for a periodic tax, thirty-one (31)
days after the end of the calendar year which contains the taxable
period for which the return is filed.
(3)In the case of the use tax, three (3) years and thirty-one (31)
days from the end of the calendar year in which the first taxable
use, other than an incidental nonexempt use, of the property
occurred.
(b)If a person files a return for the utility receipts tax (IC 6-2.3)
(repealed), adjusted gross income tax (IC 6-3), pass throu
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(a) Except as otherwise provided in this section
and section 2.5 of this chapter, the department may not issue a
proposed assessment under section 1 of this chapter more than three (3)
years after the latest of the date the return is filed, or the following:
(1) The due date of the return.
(2) In the case of a return filed for a periodic tax, thirty-one (31)
days after the end of the calendar year which contains the taxable
period for which the return is filed.
(3) In the case of the use tax, three (3) years and thirty-one (31)
days from the end of the calendar year in which the first taxable
use, other than an incidental nonexempt use, of the property
occurred.
(b) If a person files a return for the utility receipts tax (IC 6-2.3)
(repealed), adjusted gross income tax (IC 6-3), pass through entity tax
(IC 6-3-2.1), supplemental net income tax (IC 6-3-8) (repealed), county
adjusted gross income tax (IC 6-3.5-1.1) (repealed), county option
income tax (IC 6-3.5-6) (repealed), local income tax (IC 6-3.6), or
financial institutions tax (IC 6-5.5) that understates the person's
income, as that term is defined in the particular income tax law, by at
least twenty-five percent (25%), the proposed assessment limitation is
six (6) years instead of the three (3) years provided in subsection (a).
(c) In the case of the vehicle excise tax (IC 6-6-5), the tax shall be
assessed as provided in IC 6-6-5 and shall include the penalties and
interest due on all listed taxes not paid by the due date. A person that
fails to properly register a vehicle as required by IC 9-18 (before its
expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5 is
considered to have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposed under
IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall
include the penalties and interest due on all listed taxes not paid by the
due date. A person that fails to properly register a commercial vehicle
as required by IC 9-18 (before its expiration) or IC 9-18.1 and pay the
tax due under IC 6-6-5.5 is considered to have failed to file a return for
purposes of this article.
(e) In the case of the excise tax imposed on recreational vehicles
and truck campers under IC 6-6-5.1, the tax shall be assessed as
provided in IC 6-6-5.1 and must include the penalties and interest due
on all listed taxes not paid by the due date. A person that fails to
properly register a recreational vehicle as required by IC 9-18 (before
its expiration) or IC 9-18.1 and pay the tax due under IC 6-6-5.1 is
considered to have failed to file a return for purposes of this article. A
person that fails to pay the tax due under IC 6-6-5.1 on a truck camper
is considered to have failed to file a return for purposes of this article.
(f) In the case of a credit against a listed tax based on payments of
taxes to a state or local jurisdiction outside Indiana or payments of
amounts that are subsequently refunded or returned, a proposed
assessment for the refunded or returned credit must be issued by the
later of:
(1) the date by which a proposed assessment must be issued under
this section; or
(2) one hundred eighty (180) days from the date the taxpayer
notifies the department of the refund or return of payment.
For purposes of this subsection, if a taxpayer receives a refund of an
amount paid by or on behalf of the taxpayer for a listed tax, that refund
shall not be considered the payment of an amount that is subsequently
refunded or returned.
(g) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit within
which the department must issue its proposed assessment, except as
provided in subsection (l).
(h) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued within the later of:
(1) the period for which an assessment could otherwise be issued
under this section; or
(2) whichever is applicable:
(A) within two (2) years after making the refund; or
(B) within five (5) years after making the refund if the refund
was induced by fraud or misrepresentation.
(i) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment period, the period may be extended according to the
terms of a written agreement signed by both the department and the
person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person's
records until the extension terminates.
The department and a person may agree to more than one (1) extension
under this subsection.
(j) Except as otherwise provided in subsection (k), if a taxpayer's
federal taxable income, federal adjusted gross income, or federal
income tax liability for a taxable year is modified due to a modification
as provided under IC 6-3-4-6(c) and IC 6-3-4-6(d) (for the adjusted
gross income tax), or a modification or alteration as provided under IC 6-5.5-6-6(c) and IC 6-5.5-6-6(e) (for the financial institutions tax), then
the date by which the department must issue a proposed assessment
under section 1 of this chapter for tax imposed under IC 6-3 is extended
to six (6) months after the date on which the notice of modification is
filed with the department by the taxpayer.
(k) The following apply:
(1) This subsection applies to partnerships whose taxable year:
(A) begins after December 31, 2017;
(B) ends after August 12, 2018; or
(C) begins after November 2, 2015, and before January 1, 2018,
and for which a valid election under United States Treasury
Regulation 301.9100-22 is in effect;
and to the partners of such partnerships, including any partners,
shareholders, or beneficiaries of a pass through entity that is a
partner in such partnership.
(2) Notwithstanding any other provision of this article, if a
partnership is subject to federal income tax liability or a federal
tax adjustment at the partnership level as the result of a
modification under Sections 6221 through 6241 of the Internal
Revenue Code, the date on which the department must issue a
proposed assessment to either the partners or the partnership shall
be the later of:
(A) the date on which a proposed assessment must otherwise be
issued to the partner or the partnership under this section or IC 6-3-4.5 with regard to the taxable year of the partnership to
which the modification is taxed at the partnership level; or
(B) December 31, 2021.
(3) For purposes of this section and IC 6-8.1-9-1, a modification
under this subsection shall be considered a modification to the
federal taxable income, federal adjusted gross income, or federal
income tax liability of both the partners and the partnership within
the meaning of IC 6-3-4-6 and IC 6-5.5-6-6, and shall be
considered to be included in the federal taxable income or federal
adjusted gross income of both the partners and partnerships for
purposes of this article and IC 6-5.5.
(4) If a modification made to a partnership for federal income tax
purposes is reported to the partners to determine the partners'
respective federal taxable income, federal adjusted gross income,
or federal income tax liability, including reporting to partners as
the result of an election made under Section 6226 of the Internal
Revenue Code, subdivision (2) shall not apply, and those
modifications shall be treated as modifications to the partners'
federal taxable income, federal adjusted gross income, or federal
income tax liability for purposes of the following:
(A) This section.
(B) IC 6-3-4-6.
(C) IC 6-5.5-6-6.
(D) IC 6-8.1-9-1.
(l) Notwithstanding any other provision, a nonresident individual is
considered to have filed a return for purposes of this section for a
taxable year if the individual does not file a return otherwise required
under IC 6-3-4-1 for a taxable year and all of the following apply:
(1) the:
(A) individual did not have income from sources within
Indiana; or
(B) only income derived from sources within Indiana and
includible in the individual's adjusted gross income is
distributive share income from one (1) or more pass through
entities (as defined by IC 6-3-1-35);
(2) the individual is not a resident of Indiana for any portion of
the taxable year;
(3) the individual does not request a reduction in tax withholding
for a pass through entity under IC 6-3-4-12, IC 6-3-4-13, or IC 6-3-4-15 for the taxable year; and
(4) all pass through entities from which the individual derives
income from Indiana sources:
(A) file a composite return required under IC 6-3-4-12, IC 6-3-4-13, or IC 6-3-4-15; and
(B) include the individual on the composite return.
(m) The following provisions apply to subsection (l):
(1) If an individual is married and files a joint federal tax return
with the individual's spouse, the individual is considered to have
filed a return for purposes of this section only if both the
individual and the individual's spouse meet the conditions under
subsection (l)(1) through (l)(4).
(2) If an individual does not file a return, the last date for
assessment with regard to the individual's share of income from
a pass through entity shall be determined at the pass through
entity and shall be determined separately for each pass through
entity.
(3) In the event the individual files a return, the period for
assessment shall be determined based on the individual's filing
unless a different period for assessment is prescribed under this
title.
(4) The individual is required to file a return to request a refund
or carryforward of an overpayment for a taxable year.
(5) If the individual has a net operating loss deduction under IC 6-3-2-2.5 or IC 6-3-2-2.6, or a credit carryforward allowable
under IC 6-3-3 or IC 6-3.1 for the taxable year, the amount of net
operating loss or credit carryforward shall be reduced to reflect
the amount of net operating loss or credit carryforward that
otherwise would have been allowable for the taxable year.
As added by Acts 1980, P.L.61, SEC.1. Amended by
P.L.73-1983, SEC.16; P.L.82-1983, SEC.11; P.L.76-1985, SEC.6;
P.L.335-1989(ss), SEC.19; P.L.347-1989(ss), SEC.18; P.L.2-1991,
SEC.55; P.L.28-1997, SEC.26; P.L.181-1999, SEC.6;
P.L.192-2002(ss), SEC.143; P.L.131-2008, SEC.28; P.L.182-2009(ss),
SEC.251; P.L.242-2015, SEC.36; P.L.149-2016, SEC.31;
P.L.198-2016, SEC.58; P.L.197-2016, SEC.76; P.L.247-2017, SEC.26;
P.L.257-2017, SEC.15; P.L.256-2017, SEC.86; P.L.146-2020, SEC.42;
P.L.159-2021, SEC.33; P.L.138-2022, SEC.13; P.L.1-2023, SEC.20;
P.L.118-2024, SEC.20.