Statute of Limitations - FAQ

  • What is the statute of limitations for a refund?

    A claim for refund must be made within three years after the later of the date the tax was paid or the due date of the return, including extensions. Taxes paid by withholding or estimated tax are treated as having been made on the regular due date of the return. Refer to the instruction booklet for additional information.

  • What is the statute of limitations for assessing tax liabilities?

    The limitations are as follows:

    • The Department of Revenue normally has three years in which to assess additional tax. However, if a claim for refund is filed within the six-month period, before the close of the statute of limitations period, the period of assessment is extended for six months beginning on the day the claim for refund is filed.
    • If the taxpayer has omitted more than 25% of the gross income from the return, the limitation is six years.
    • In the case of fraud or if the taxpayer fails to file a return, there is no time limit.
  • What are the requirements when the Internal Revenue Service changes my return?

    The requirements are as follows:

    • When a change is made, the taxpayer must notify the Department of Revenue within 180 days and must claim a refund within 1 year of notifying the Department.
    • If the taxpayer fails to notify the Department, the Department has five years after it receives the report from the Internal Revenue Service to make an assessment.
    • Interest on the tax is due from the due date of the return through the date the taxes are paid.
    • If it is determined there has been an overpayment of tax for the year, failure to notify the Commissioner within 180 days will result in the forfeiture of your right to any refund as a result of the change or correction. However, for tax years beginning on or after January 1, 1987, 90% may be applied to another year’s liability on the same Internal Revenue Service report.