2014 Kentucky Revised Statutes CHAPTER 141 - INCOME TAXES 141.210 Auditing of returns -- Assessment of additional tax -- Taxpayer to notify department of audit of federal income tax returns.
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141.210 Auditing of returns -- Assessment of additional tax -- Taxpayer to
notify department of audit of federal income tax returns.
(1)
(2)
As used in this section and KRS 141.235, unless the context requires
otherwise:
(a) "Conclusion of the federal audit" means the date that the adjustments made
by the Internal Revenue Service to net income as reported on the
taxpayer's federal income tax return become final and unappealable; and
(b) "Final determination of the federal audit" means the revenue agent's report
or other documents reflecting the final and unappealable adjustments
made by the Internal Revenue Service.
As soon as practicable after each return is received, the department shall
examine and audit it. If the amount of tax computed by the department is
greater than the amount returned by the taxpayer, the additional tax shall be
assessed and a notice of assessment mailed to the taxpayer by the
department within four (4) years from the date the return was filed, except as
otherwise provided in this subsection.
(a) In the case of a failure to file a return or of a fraudulent return the
additional tax may be assessed at any time.
(b) In the case of a return where a taxpayer other than a corporation
understates his net income or omits an amount properly includable in net
income or both which understatement or omission or both is in excess of
twenty-five percent (25%) of the amount of net income stated in the return
the additional tax may be assessed at any time within six (6) years after
the return was filed.
(c) In the case of a return where a corporation understates its taxable net
income or omits an amount properly includable in taxable net income or
both, which understatement or omission or both is in excess of twenty-five
percent (25%) of the amount of taxable net income stated in the return,
the additional tax may be assessed at any time within six (6) years after
the return was filed.
(d) In the case of an assessment of additional tax relating directly to
adjustments resulting from a final determination of a federal audit, the
additional tax may be assessed before the expiration of the times
provided in this subsection, or six months from the date the department
receives the final determination of the federal audit from the taxpayer,
whichever is later.
(e) In the case of the assessment of additional tax resulting from a decrease
of a net operating loss deduction or a capital loss deduction, resulting
from the carryback of a loss which occurs in a taxable year beginning
after December 31, 1993, the additional tax may be assessed at any time
before the expiration of the times provided for in this subsection for
assessing additional tax for the taxable year which resulted in the net
operating loss or capital loss carryback.
The times provided in this subsection may be extended by agreement between
the taxpayer and the department. For the purposes of this subsection, a return
filed before the last day prescribed by law for filing the return shall be
(3)
(4)
considered as filed on the last day. For taxable years beginning after
December 31, 1993, any extension granted for filing the return shall also be
considered as extending the last day prescribed by law for filing the return.
If any additional tax is assessed on account of any income which has been
returned for taxation by any other taxpayer, the department, with the consent of
the other taxpayer, his personal representatives, or heirs, shall reduce the
amount of the additional tax assessed for each year by the amount of the
income tax paid for that year by the other taxpayer on account of the income in
question.
Every taxpayer shall:
(a) Notify the department in writing of every audit of the taxpayer's federal
income tax return within thirty (30) days after the taxpayer has or should
have had knowledge of the beginning of the audit by the Internal Revenue
Service, and
(b) Submit a copy of the final determination of the federal audit within thirty
(30) days of the conclusion of the federal audit.
Effective:June 20, 2005
History: Amended 2005 Ky. Acts ch. 85, sec. 490, effective June 20, 2005. -Amended 1994 Ky. Acts ch. 106, sec. 2, effective July 15, 1994. -- Amended
1974 Ky. Acts ch. 163, sec. 6. -- Amended 1970 Ky. Acts ch. 216, sec. 7. -Amended 1966 Ky. Acts ch. 176, Part I, sec. 9. -- Amended 1956 (4th Extra,
Sess.) Ky. Acts ch. 4, sec. 10. -- Amended 1954 Ky. Acts ch. 79, sec. 16. -Amended 1952 Ky. Acts ch. 194, sec. 10. -- Amended 1948 Ky. Acts ch. 93,
sec. 7. -- Repealed in part 1944 Ky. Acts ch. 173, sec. 9. -- Recodified 1942 Ky.
Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 4281-12,
4281b-26.
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