UNAPPROVED DRAFT BILL -- Subject to Change Without Notice!
BILL NO.
INTRODUCED BY
(Primary Sponsor)
A BILL FOR AN ACT ENTITLED: "AN ACT REDUCING THE PERIODS OF LIMITATION APPLICABLE TO INDIVIDUALS AND EMPLOYERS FOR TAXATION AND REFUND PURPOSES; AMENDING SECTIONS 15-30-145, 15-30-146, 15-30-147, 15-30-149, 15-30-251, AND 15-30-255, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-30-145, MCA, is amended to read:
"15-30-145. Revision of return by department -- statute of limitations -- examination of records and persons. (1)
If, in the opinion of the department, determines that any return of a taxpayer is in any essential respect incorrect, it may
revise the return.
(2) If a taxpayer does not file a return as required under this chapter, the department may, at any time, audit the taxpayer or estimate the taxable income of the taxpayer from any information in its possession and, based upon the audit or estimate, assess the taxpayer for the taxes, penalties, and interest due the state.
(3) Except as provided in subsections (2) and (4), the amount of tax due under any return may be determined by the
department within 5 3 years after the return was filed, regardless of whether the return was filed on or after the last day
prescribed for filing. For the purposes of 15-30-147 and this section, a tax return due under this chapter and filed before the
last day prescribed by law or rule is considered to be filed on the last day prescribed for filing.
(4) If a taxpayer, with intent to evade the tax, purposely or knowingly files a false or fraudulent return that violates a provision of this chapter, the amount of tax due may be determined at any time after the return is filed and the tax may be collected at any time after it becomes due.
(5) The department, for the purpose of ascertaining the correctness of any return or for the purpose of making an estimate of taxable income of any person where information has been obtained, may also examine or cause to have examined by any agent or representative designated by it for that purpose any books, papers, or records of memoranda bearing upon the matters required to be included in the return and may require the attendance of the person rendering the return or any officer or employee of the person or the attendance of any person having knowledge in the premises and may take testimony and require proof material for its information, with power to administer oaths to the person or persons."
Section 2. Section 15-30-146, MCA, is amended to read:
"15-30-146. Tolling of statute of limitations. The running of the statute of limitations provided for under 15-30-145
shall be is suspended during any period that the federal statute of limitations for collection of federal income tax has been
suspended by written agreement signed by the taxpayer or when the taxpayer has instituted an action which that has the
effect of suspending the running of the federal statute of limitations and for 1 additional year. If the taxpayer fails to file a
record of changes in federal taxable income or an amended return as required by 15-30-304, the statute of limitations shall
does not apply until 5 3 years from the date the federal changes become final or the amended federal return was filed. If the
taxpayer omits from gross income an amount properly includable therein which in the return that is in excess of 25% of the
amount of adjusted gross income stated in the return, the statute of limitations shall does not apply for 2 additional years
from the time specified in 15-30-145."
Section 3. Section 15-30-147, MCA, is amended to read:
"15-30-147. Application for revision -- appeal. An application for revision may be filed with the department by a
taxpayer within 5 3 years from the last day prescribed for filing the return as provided in 15-30-145(3), regardless of
whether the return was filed on or after the last day prescribed for filing. If the department has revised a return pursuant to
15-30-145(3), the taxpayer may revise the same return until the liability for that tax year is finally determined. If the taxpayer
is not satisfied with the action taken by the department, the taxpayer may appeal to the state tax appeal board."
Section 4. Section 15-30-149, MCA, is amended to read:
"15-30-149. Credits and refunds -- period of limitations. (1) If the department discovers from the examination of a
return, or upon a claim duly filed by a taxpayer, or upon final judgment of a court that the amount of income tax collected is
in excess of the amount due or that any penalty or interest was erroneously or illegally collected, the amount of the
overpayment must be credited against any income tax, penalty, or interest then due from the taxpayer and the balance of the
excess must be refunded to the taxpayer.
(2) (a) A credit or refund under the provisions of this section may be allowed only if, prior to the expiration of the period provided by 15-30-146 and 15-30-147, the taxpayer files a claim or the department determines there has been an overpayment.
(b) If an overpayment of tax results from a net operating loss carryback, the overpayment may be refunded or credited
within the period that expires on the 15th day of the 40th 28th month following the close of the taxable tax year of the net
operating loss if that period expires later than 5 3 years from the due date of the return for the year to which the net
operating loss is carried back.
(3) Within 6 months after a claim for refund is filed, the department shall examine the claim and either approve or disapprove it. If the claim is approved, the credit or refund must be made to the taxpayer within 60 days after the claim is approved. If the claim is disallowed, the department shall notify the taxpayer and a review of the determination of the department may be pursued as provided in 15-1-211.
(4) Interest is allowed on overpayments at the same rate as charged on delinquent taxes. Interest is payable from the due
date of the return or from the date of the overpayment, whichever date is later, to the date the department approves
refunding or crediting of the overpayment. With respect to tax paid by withholding or by estimate, the date of overpayment
is the date on which the return for the taxable tax year was due. Interest does not accrue on an overpayment if the taxpayer
elects to have it applied to the taxpayer's estimated tax for the succeeding taxable tax year. Interest does not accrue during
any period the processing of a claim for refund is delayed more than 30 days by reason of failure of the taxpayer to furnish
information requested by the department for the purpose of verifying the amount of the overpayment. Interest is not allowed
if:
(a) the overpayment is refunded within 45 days from the date the return is due or the date the return is filed, whichever date is later;
(b) the overpayment results from the carryback of a net operating loss; or
(c) the amount of interest is less than $1.
(5) An overpayment not made incident to a bona fide and orderly discharge of an actual income tax liability or one reasonably assumed to be imposed by this law is not considered an overpayment with respect to which interest is allowable."
Section 5. Section 15-30-251, MCA, is amended to read:
"15-30-251. Statute of limitations. (1) In the case of a nonfiled return, the department may, at any time, audit the employer or estimate the tax due from any information in its possession and issue an assessment for the amount of the tax, penalty, and interest the department determines to be due.
(2) If the department determines, pursuant to a review conducted pursuant to 15-30-145, that any return is incorrect, it
may revise the return within 5 3 years of the due date of the original return, within 5 3 years of the date the return was filed,
or 1 year from the date an amended return was filed, whichever is later.
(3) Notwithstanding the provisions of subsection (2), if an employer purposely or knowingly files a false or fraudulent return, with intent to evade the tax, the amount of tax, penalty, and interest due may be determined at any time after the return is filed and collected at any time after it becomes due.
(4) For the purposes of this section, a return filed before the due date is considered to be filed on the due date.
(5) The statute of limitations is suspended during any time in which an employer-employee relationship determination has been appealed as provided in 15-1-211, and the time for assessment extends for an additional 1 year from the date the decision becomes final."
Section 6. Section 15-30-255, MCA, is amended to read:
"15-30-255. Credits and refunds -- period of limitations. (1) If the department determines by examination of an employer's account, or upon claim filed by an employer, that the employer has overpaid the amount of tax, penalty, or interest, the amount of the overpayment may be refunded to the employer or applied to current or future obligations of any tax, penalty, or interest for any tax contained in this title at the discretion of the taxpayer.
(2) A credit or refund may be allowed only if the claim is filed or the determination is made within 5 3 years of the due
date prescribed for filing a report or 1 year from the date of the notification of the overpayment by the department.
(3) The department shall notify the employer of the overpayment and the credit or refund options available to the employer. A credit must be applied to the employer account unless directed otherwise by the employer.
(4) If a claim is disallowed, the department shall notify the employer. The decision disallowing the claim is subject to review as provided in 15-1-211.
(5) Interest is:
(a) allowed on an overpayment at the same rate as charged for late tax payments under this part;
(b) payable from the due date of the payment or the date overpayment was verified, whichever is later;
(c) not payable if the overpayment is applied to current or future obligations with the department.
(6) Interest is not allowed if the overpayment is refunded within 45 days from the date the employer directs the department to refund the overpayment.
(7) If additional information is required to verify the amount of the overpayment, the 45-day period in subsection (6) does not begin until the information is provided."
NEW SECTION. Section 7. Effective date. [This act] is effective on passage and approval.
NEW SECTION. Section 8. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 2000.
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