(a) Tax imposed under chapter
235, HRS, shall be assessed or
levied, and any overpayment shall be credited, within three years after filing
the final income tax return for the taxable year, or within three years of the
prescribed due date of the return, whichever is later.
(1) Running of the limitation period.
(A) In general. Although returns may be filed
before the prescribed due date, the running of the limitation period for
purposes of section
235-111,
HRS, and this section, unless otherwise prescribed, does not start until after
the prescribed due date for filing.
(B) Where an amended return is filed. When a
return has been timely filed as required by law and thereafter an amended
return is filed, the limitation period begins to run from the date the original
return was filed or the prescribed due date, whichever is later. Filing an
amended return does not extend, nor does it stop, the running of the limitation
period. The original return, however, must be complete and meet the statutory
requirements; the limitation period will begin to run only upon the filing of a
proper return. The running of the limitation period is not affected or
suspended by the later filing of amended returns.
(C) Loss of S corporation status. Where
corporate tax liability is found to be due upon a determination that the
corporation is not entitled to the benefits of a corporation organized under
subchapter S (sections 1361 to 1369) of the Internal Revenue Code of 1986, as
amended, the limitation period for assessment and collection shall run from the
date the return is filed or from the prescribed due date for filing the return,
whichever is later.
(2)
Credit resulting from net operating loss carrybacks. As set forth in section
235-111,
HRS, the limitation period for credit related to an overpayment of tax
resulting from a net operating loss carryback shall be the later of:
(A) Three years from the prescribed due date
for filing the return for the taxable year in which the net operating loss
occurs; or
(B) Any extension
period, as agreed by the taxpayer and the department, pursuant to this
section.
(b)
This section does not bar assessment of tax, or a proceeding for collection
without assessment, where no return is filed or where a false or fraudulent
return is filed with the intent to evade tax liability.
(c) Extension by agreement. Form N-102 shall
be used to extend the limitation period of income tax as prescribed in section
235-111(c),
HRS, and must be signed by the taxpayer and the director of taxation or
designee in the district in which the return is filed.
