Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 300 - Administration › Rule 701-300.2 - Statute of Limitations

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Periods of audit.
a. The
				department has three years after a return has been filed or three years after
				the return became due, including any extensions of time for filing, whichever
				time is the later, to determine whether any additional tax other than that
				shown on the return is due and owing. This three-year statute of limitations
				does not apply in the instances specified in paragraphs
"b," "c," "d,"
				"e," "f"
and
"g."
b. If a taxpayer fails to include in the
				taxpayer's return items of gross income as defined in the Internal Revenue Code
				as amended, as will under that Code extend the statute of limitations for
				federal tax purposes to six years, the correct amount of tax due may be
				determined by the department within six years from the time the return is
				filed, or within six years after the return became due, including any
				extensions of time for filing, whichever time is the later.
c. If a taxpayer files a false or fraudulent
				return with intent to evade tax, the correct amount of tax due may be
				determined by the department at any time after the return has been
				filed.
d. If a taxpayer fails to
				file a return, the periods of limitations so specified in Iowa Code section
				422.25 do not begin to run until the return is filed with the
				department.
e. While the burden of
				proof of additional tax owing under the six-year period or the unlimited period
				is upon the department, a prima facie case of omission of income, or of making
				a false or fraudulent return, shall be made upon a showing of a federal audit
				of the same income, a determination by federal authorities that the taxpayer
				omitted items of gross income or made a false or fraudulent return, and the
				payment by the taxpayer of the amount claimed by the federal government to be
				the correct tax or the admission by the taxpayer to the federal government of
				liability for that amount.
f. In
				addition to the periods of limitation set forth in paragraph
"a," "b,"
				"c," "d,"
or
"e,"
the department has six months after
				notification by the taxpayer of the final disposition of any matter between the
				taxpayer and the Internal Revenue Service with respect to any particular tax
				year to make an examination and determination. Final disposition of any matter
				between the taxpayer and the Internal Revenue Service triggers the extension of
				the statute of limitations for the department to make an examination and
				determination, and the extension runs until six months after the department
				receives notification and a copy of the federal document showing the final
				disposition or final federal adjustments from the taxpayer.
Van Dyke v.
				Iowa Department of Revenue and Finance,
547 N.W.2d 1. This examination
				and determination is limited to those matters between the taxpayer and the
				Internal Revenue Service which affect Iowa taxable income.
Kelly-Springfield Tire Co. v. Iowa State Board of Tax Review,
414 N.W.2d 113 (Iowa 1987). The notification shall be in writing in any form
				sufficient to inform the department of final disposition, and attached to the
				notification shall be a photo reproduction or carbon copy of the federal
				document which shows the final disposition and any schedules necessary to
				explain the federal adjustments. The notification and copy of the federal
				document shall be mailed, under separate cover, to the Examination Section,
				Compliance Division, P.O. Box 10456, Des Moines, Iowa 50306. Any notification
				and copy of the federal document which is included in, made a part of, or
				mailed with a current year Iowa individual income tax return will not be
				considered as proper notification for the purposes of beginning the running of
				the six-month period.
g. In lieu of
				the period of limitation for any prior year for which an overpayment of tax or
				an elimination or reduction of an underpayment of tax due for that prior year
				results from the carryback to such prior year of a net operating loss or net
				capital loss, the period shall be the period of limitation for the taxable year
				of the net operating loss or net capital loss which results in such
				carryback.