Assessments resulting from adjustments

At any time within four years of the filing of an original return, whether filed timely, under extension, or otherwise, the Department may examine the return, determine the correct amount of tax, and issue a notice of deficiency for any additional tax due. Following the resolution of any protest and request for hearing or, if the taxpayer files no protest or request within the prescribed time, the Department will issue a notice of final determination for any additional tax due.

The period allowed for the Department to assess additional tax may be extended if there is any change made to the individual’s federal taxable income. A taxpayer is required, as described in Part 7 of this publication, to file an amended return to report any change to the individual’s federal taxable income. The Department may assess additional tax any time within one year after the taxpayer timely files the required amended return or within the time provided under the general statute of limitations discussed above, whichever is later. If the taxpayer fails to file the required amended return in a timely manner, the Department may assess additional tax within any of the following periods of time:

the general statute of limitations discussed above;

the one-year period following the date the federal adjustments report was filed; or

the six-year period after the federal adjustment was finalized (see Part 7 for additional information).

In the case of fraud, the Department may assess additional tax at any time.