42-1109. Failure to file return; false or
fraudulent return; mandamus; order to produce documents
A. If a person who is required to file a report or return fails to do so within
fifteen days after written demand by the department, the department shall proceed to
obtain facts and information on which to base the tax, and for such purpose the
department or its agent may examine the books, records and papers of such person and may
take evidence on oath of any person who it believes is in possession of facts or
information pertinent to the inquiry. The director or the director's agent may
administer the oath. As soon as the department procures such information it shall hold a
hearing for the purpose of ascertaining the amount of tax payable by the person. The
department shall give at least ten days' notice in writing of the time and place of
holding the hearing, which shall be mailed to the person's last known address or served
personally. The levy of the tax is final after the hearing as to any person who fails or
refuses to file a return.
B. If a taxpayer files a false or fraudulent return or fails or neglects to file a
return within fifteen days after written demand by the department, the department, at any
time, may require a return or a supplementary return or may make an estimate of the
taxable income from any available information and may propose to assess the amount of
tax, interest and penalties due. All the provisions of this article relative to
delinquent taxes apply to the tax, interest and penalties computed pursuant to this
subsection. A proceeding in court for the collection of the tax, interest and penalties
provided for in this subsection may be begun without assessment at any
time. Notwithstanding section 42-1004, subsection C, the assessment of tax, interest or
penalties under this subsection does not preclude subsequent deficiency assessments under
section 42-1108.
C. If an assessment is proposed under this section, the taxpayer has the right to
protest the assessment, to have an oral hearing on the protest if requested and to appeal
to the state board of tax appeals from the department's action on the protest. The
taxpayer shall proceed under this section in the manner and within the time prescribed by
article 6 of this chapter.
D. In addition to the remedies provided by subsection B of this section, if a
taxpayer fails to file a return within sixty days of the time prescribed by this chapter,
the department may petition the tax court to issue a writ of mandamus requiring the
person to file a return. The petition shall be returnable not later than ten days after
filing the petition. The petition shall be heard and determined on the return day or on
such day thereafter as the court shall fix, having regard to the speediest possible
determination of the case, consistent with the rights of the parties. The court shall
provide at least ten days' written notice of the hearing to the taxpayer which shall be
mailed to the taxpayer's last known address or served on the taxpayer personally. The
judgment shall include costs in favor of the prevailing party. Proceedings on such suits
shall comply with the rules of procedure for special actions.
E. If a person wilfully refuses to make available any books, papers or records for
examination by the department, or wilfully refuses to attend and testify, in connection
with any proceedings instituted under subsection A of this section, the department may
apply to the tax court for an order directing that person to produce the books, papers or
records or to compel the person's attendance and testimony. If the books, papers or
records required by the department are in the custody of a corporation, the order of the
court may be directed to any principal officer of the corporation or its registered
statutory agent. The failure to obey such an order of the court may be punished by the
court as contempt.
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