42-2059

42-2059. No additional audits or proposed
assessments; exceptions

A. When the department completes an audit or the findings of a managed audit are
accepted by the director or approved on appeal and a deficiency has been completely
determined under section 42-1108 or chapter 1, article 6 of this title, the taxpayer's
liability for the particular tax for the period subjected to the audit is fixed and
determined, and no additional audit may be conducted except under the following
circumstances:

1. If a taxpayer files a claim for refund under section 42-1251, subsection B or
any other provision authorizing a claim for refund. Any departmental audit of the claim
is limited to the issues presented on the claim for refund.

2. Changes or corrections required to be reported to the department by section
43-327. The department may audit any such reports or any periods for which a report was
required notwithstanding this section and may determine a tax deficiency or a refund.

3. An audit of state transaction privilege or use tax does not preclude a
subsequent audit for a city or town. An audit of transaction privilege or use tax for a
city or town does not preclude a subsequent audit for this state.

4. If the taxpayer failed to disclose material information during the audit, or has
falsified books or records or otherwise engaged in an action that prevented the
department from conducting an accurate audit, the applicability of this subsection may be
part of a subsequent protest and may be contested by the taxpayer pursuant to chapter 1,
article 6 of this title.

5. If a managed audit is completed under the terms of a limited managed audit
agreement, the department may audit the issues not covered by the limited managed audit
agreement within the statute of limitations prescribed by section 42-1104.

B. If the department issues a notice of proposed assessment of taxes imposed by
chapter 5, article 1 or 4 of this title or title 43, chapter 10, the department may not
increase the amount of the proposed assessment except in one or more of the following
circumstances:

1. The taxpayer has made a material misrepresentation of facts.

2. The taxpayer has failed to disclose a material fact to the auditor.

3. The department has requested information and the taxpayer fails to provide that
information to the department.

4. After issuing the notice of proposed assessment but before the assessment
becomes final the tax court, court of appeals or supreme court issues a decision, the
application of which causes the tax initially proposed to increase.

C. Subsection B of this section does not apply to changes or corrections that are
required to be reported to the department by section 43-327.