Tax commissioner to audit returns and assess tax

1. Except as otherwise provided in this section, the tax commissioner shall proceed to audit the returns of taxpayers and, not later than three years after the due date of the return, or three years after the return was filed, whichever period expires later, assess the tax and, if any additional tax is found due, shall notify the taxpayer in detail as to the reason for the increase. 2. For taxable years beginning before January 1, 1991, as to any corporation or other person whose principal place for managing or directing a business is outside North Dakota, the tax commissioner has six years after the due date of the return or six years after the return was filed, whichever period expires later, to audit the return of the corporation or other person and assess any additional tax found due. Effective for the taxable years beginning after December 31, 1990, and before January 1, 1993, the tax commissioner has five years to audit the return of the corporation or other person and assess any additional tax found due. Effective for taxable years beginning after December 31, 1992, and before January 1, 1995, the time period for assessment under this subsection is four years. Effective for taxable years beginning after December 31, 1994, the time period for assessment under this subsection is three years. 3. If there is a change in taxable income or income tax liability by an amount which is in excess of twenty-five percent of the amount of taxable income or income tax liability stated in the return as filed, any additional tax determined to be due may be assessed at any time within six years after the due date of the return, or six years after the return was filed, whichever period expires later. 4. If a person has failed to file a return of income as required by this chapter, the tax may be assessed under section 57-38-33 or subsection 6 of section 57-38-45, or an action brought under section 57-38-47, at any time within ten years after the due date of the return. 5. If false or fraudulent information is given in the return, or if the failure to file a return is due to the fraudulent intent or the willful attempt of the taxpayer in any manner to evade the tax, the time limitations in this section do not apply, and the tax may be assessed at any time. 6. a. If a person files an amended state income tax return, or other information as required by the tax commissioner, pursuant to section 57-38-34.4, the tax commissioner has two years after the amended state income tax return, or other information as required by the tax commissioner, is filed to audit the state income tax return and assess any additional state income tax attributable to the changes or corrections made by the United States internal revenue service, or other competent authority, or that is attributable to the amended federal income tax return, even though other time periods prescribed in this section for the assessment of tax may have expired. The provisions of this subsection do not limit or restrict any other time period prescribed in this section for the assessment of tax that has not expired as of the end of the two-year period prescribed in this subsection. b. For taxable years beginning before January 1, 1991, any person who consents to an extension of time for the assessment of taxes with the internal revenue service shall be presumed to have consented to a similar extension of time for the assessment or refund of state income tax with the state tax commissioner. Refunds under this subdivision are limited to tax years beginning after July 1, 1983. c. If a determination is made under subdivision a that additional tax is due and the tax commissioner has previously refunded income taxes related to the amended return or claim, subsection 2 of section 57-38-45 does not apply to the refunded amount. 7. If a person fails to file an amended state income tax return, or other information as required by the tax commissioner, under section 57-38-34.4, the tax commissioner may assess any additional tax found due which is attributable to the changes or corrections made by the United States internal revenue service, or other competent authority, or which is attributable to the amended federal income tax return, at any time, even though other time periods prescribed in this section may have expired. 8. If before the expiration of the time periods prescribed in subsections 1, 2, and 3 the tax commissioner and a person consent in writing to an extension of time for the assessment of the tax, an assessment of additional state income tax may be made 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. If a person refuses to consent to an extension of time or a renewal thereof, the tax commissioner may make an assessment based on the best information available. The period agreed upon in this subsection, including extensions, expires upon issuance of an assessment by the tax commissioner. 9. Except for an amended return required to be filed under section 57-38-34.4, if a person files an amended state income tax return within the time periods prescribed in subsections 1, 2, and 3 of this section or subsections 1 and 2 of section 57-38-40, the tax commissioner has two years after the amended state income tax return is filed to audit the state income tax return and assess any additional state income tax attributable to the changes or corrections on the amended return, even though other time periods prescribed in this section for the assessment of tax may have expired. The provisions of this subsection do not limit or restrict any other time period prescribed in this section for the assessment of tax that has not expired at the end of the two-year period prescribed in this subsection. 10. For investments made under chapters 57-38.5 and 57-38.6 after December 31, 2002, the tax commissioner has four years after the due date of the return, or four years after the return was filed, whichever period expires later, to audit any seed capital investment tax credit or agricultural business investment tax credit claimed by a taxpayer and assess the tax if additional tax is found due. The provisions of this subsection do not limit or restrict any other time period prescribed in this section for the assessment of tax. 11. This section applies if additional tax would be due under the provisions of chapter 57-35.3 in effect for taxable years beginning before January 1, 2013.