§ 74 — Limitations on Assessment

§ 74. Limitations on Assessment. 1. General.--Except as otherwise\nprovided in this section, any tax under the named parts shall be\nassessed within three years after the return was filed (whether or not\nsuch return was filed on or after the date prescribed).\n 2. Time return deemed filed.--For purposes of this section, a return\nof tax filed before the last day prescribed by law or by regulations\npromulgated pursuant to law for the filing thereof shall be deemed to be\nfiled on such last day.\n 3. Exceptions.--\n (a) Assessment at any time.--The tax may be assessed at any time if--\n (1) no return is filed,\n (2) a false or fraudulent return is filed with intent to evade tax,\n (3) in the case of the tax imposed under part two or part three of\nthis title, the taxpayer fails to file a report or amended return\nrequired thereunder, in respect of an increase or decrease in federal\ntaxable income or federal tax, or in respect of a change or correction\nor renegotiation or in respect of the execution of a notice of waiver\nreport of which is required thereunder, or computation or recomputation\nof tax, which is treated in the same manner as if it were a deficiency\nfor federal income tax purposes; or\n (4) in the case of the tax imposed under part two of this title, the\ntaxpayer fails to file a report or amended return or report required\nthereunder, in respect of a change or correction of sales and\ncompensating use tax liability, relating to the purchase or use of items\nfor which a sales or compensating use tax credit against the tax imposed\nby part two was claimed.\n (b) Extension by agreement.--Where, before the expiration of the time\nprescribed in this section for the assessment of tax, both the director\nof finance and the taxpayer have consented in writing to its assessment\nafter such time, the tax may be assessed at any time prior to the\nexpiration of the period agreed upon. The period so agreed upon may be\nextended by subsequent agreements in writing made before the expiration\nof the period previously agreed upon.\n (c) Report of changed or corrected federal income. In the case of the\ntax imposed under part two or part three of this title, if the taxpayer\nfiles a report or amended return required thereunder, in respect of an\nincrease or decrease in federal taxable income or federal tax, or in\nrespect of a change or correction or renegotiation, or in respect of the\nexecution of a notice of waiver report of which is required thereunder,\nor computation or recomputation of tax, which is treated in the same\nmanner as if it were a deficiency for federal income tax purposes, the\nassessment (if not deemed to have been made upon the filing of the\nreport or amended return) may be made at any time within two years after\nsuch report or amended return was filed. The amount of such assessment\nof tax shall not exceed the amount of the increase in city tax\nattributable to such federal change or correction or renegotiation, or\ncomputation or recomputation of tax. The provisions of this paragraph\nshall not affect the time within which or the amount for which an\nassessment may otherwise be made.\n (d) Deficiency attributable to net operating loss carryback.--If a\ndeficiency of tax under part two of this title is attributable to the\napplication to taxpayer of a net operating loss carryback, it may be\nassessed at any time that a deficiency for the taxable year of the loss\nmay be assessed.\n (e) Recovery of erroneous refund.--An erroneous refund shall be\nconsidered an underpayment of tax on the date made, and an assessment of\na deficiency arising out of erroneous refund may be made at any time\nwithin two years from the making of the refund, except that the\nassessment may be made within five years from the making of the refund\nif it appears that any part of the refund was induced by fraud or\nmisrepresentation of a material fact.\n (f) Request for prompt assessment.--The tax shall be assessed within\neighteen months after written request therefor (made after the return is\nfiled) by the taxpayer or by a fiduciary representing the taxpayer, but\nnot more than three years after the return was filed, except as\notherwise provided in this subdivision and subdivision four. This\nsubdivision shall not apply unless--\n (1) (A) such written request notifies the director of finance that the\ntaxpayer contemplates dissolution at or before the expiration of such\neighteen-month period, (B) the dissolution is in good faith begun before\nthe expiration of such eighteen-month period, and (C) the dissolution is\ncompleted;\n (2) (A) such written request notifies the director of finance that a\ndissolution has in good faith been begun, and (B) the dissolution is\ncompleted; or\n (3) a dissolution has been completed at the time such written request\nis made.\n (g) Change of the allocation of taxpayer's income or capital.--No\nchange of the allocation of income or capital upon which the taxpayer's\nreturn (or any additional assessment) was based shall be made where an\nassessment of tax is made during the additional period of limitation\nunder subparagraph (3) or (4) of paragraph (a), or under paragraph (c),\n(d) or (i); and where any such assessment has been made, or where a\nnotice of deficiency has been mailed to the taxpayer on the basis of any\nsuch proposed assessment, no change of the allocation of income or\ncapital shall be made in a proceeding on the taxpayer's claim for refund\nof such assessment or on the taxpayer's petition for redetermination of\nsuch deficiency.\n (h) Report concerning waste treatment facility. Under the\ncircumstances described in subparagraph (3) of paragraph (g) of\nsubdivision eight of section two of this title, the tax may be assessed\nwithin three years after the filing of the report containing the\ninformation required by such paragraph.\n (i) Report of changed or corrected sales and compensating use tax\nliability. In the case of a tax imposed under part two of this title, if\nthe taxpayer files a report or amended return or report required\nthereunder, in respect of a change or correction of sales and\ncompensating use tax liability, the assessment (if not deemed to have\nbeen made upon the filing of the report) may be made at any time within\ntwo years after such report or amended return or report was filed. The\namount of such assessment of tax shall not exceed the amount of the\nincrease in city tax attributable to such state change or correction.\nThe provisions of this paragraph shall not affect the time within which\nor the amount for which an assessment may otherwise be made.\n 4. Omission of income on return.--The tax may be assessed at any time\nwithin six years after the return was filed if a taxpayer omits from\ngross income required to be reported on a return under any of the named\nparts an amount properly includable therein which is in excess of\ntwenty-five percentum of the amount of gross income stated in the\nreturn.\n For purposes of this subdivision--\n (a) the term "gross income" means gross income for federal income tax\npurposes as reportable on a return under part two of this title and\n"gross earnings," "gross income," "gross operating income" and "gross\ndirect premiums less return premiums," as those terms are used in\nwhichever of the named parts is applicable;\n (b) there shall not be taken into account any amount which is omitted\nin the return if such amount is disclosed in the return, or in a\nstatement attached to the return, in a manner adequate to apprise the\ndirector of finance of the nature and amount of such item.\n 5. Suspension of running of period of limitations. The running of the\nperiod of limitations on assessment or collection of tax or other amount\n(or of a transferee's liability) shall, after the mailing of a notice of\ndeficiency, be suspended for the period during which the director of\nfinance is prohibited under subdivision three of section seventy-two\nfrom making the assessment or from collecting by levy.\n