House Bill 793

AN ACT TO AMEND SECTION 27-7-49, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FOR THE PURPOSE OF MAKING AN ADDITIONAL ASSESSMENT OR REFUND OF STATE INCOME TAX WHERE THE REPORTED TAXABLE INCOME OF A TAXPAYER HAS BEEN INCREASED OR DECREASED BY THE INTERNAL REVENUE SERVICE, THE DATE OF A LETTER OR OTHER OFFICIAL CORRESPONDENCE PREPARED BY THE INTERNAL REVENUE SERVICE AND ADDRESSED AND SENT TO A TAXPAYER INFORMING THE TAXPAYER THAT THE INTERNAL REVENUE SERVICE HAS MADE A DETERMINATION REGARDING THE TAXPAYER'S LIABILITY DUE TO CHANGES IN THE TAXPAYER'S REPORTABLE TAXABLE INCOME IS THE DATE THE INTERNAL REVENUE SERVICE DISPOSES OF THE TAX LIABILITY IN QUESTION; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 27-7-49, Mississippi Code of 1972, is amended as follows:

27-7-49. (1) Returns shall be examined by the commissioner or his duly authorized agents within three (3) years from the due date or the date the return was filed, whichever is later, and no determination of a tax overpayment or deficiency shall be made by the commissioner, and no suit shall be filed with respect to income within the period covered by such return, after the expiration of said three-year period, except as hereinafter provided and as provided in Section 27-7-307.

(2) When an examination of a return made under this article has been commenced, and the taxpayer notified thereof, either by certified mail or personal delivery by an agent of the commissioner, within the three-year examination period provided in subsection (1) of this section, the determination of the correct tax liability may be made by the commissioner after the expiration of said three-year examination period, provided that said determination shall be made with reasonable promptness and diligence.

(3) Where the reported taxable income of a taxpayer has been increased or decreased by the Internal Revenue Service, the three-year examination period provided in subsection (1) of this section shall not be applicable, insofar as the Mississippi income tax liability is affected by the specific changes made by said Internal Revenue Service. However, no additional assessment or no refund shall be made under the provisions of this article after three (3) years from the date the Internal Revenue Service disposes of the tax liability in question. For the purposes of this subsection (3), "the date the Internal Revenue Service disposes of the tax liability in question" means the date of a letter or other official correspondence prepared by the Internal Revenue Service and addressed and sent to a taxpayer informing the taxpayer that the Internal Revenue Service has made a determination regarding the taxpayer's liability due to changes in the taxpayer's reportable taxable income.

(4) The three-year examination period provided in subsection (1) of this section shall not be applicable in the case of a false or fraudulent return with intent to evade tax.

(5) A taxpayer may apply to the commissioner for revision of any return filed under this article at any time within three (3) years from the due date, or if an extension of time to file was granted, three (3) years from the date the return was filed. If the return is not filed by the time authorized by the extension, then the three (3) years begin to run from the final day of the extension period.

(6) Where the reportable taxable income of a taxpayer has been decreased by the carryback of a net casualty loss deduction under Section 27-7-20 or the carryback of a net operating loss deduction under Section 27-7-17, the three-year examination period provided under subsection (1) of this section shall not be applicable insofar as the Mississippi income tax liability is affected by the carryback of the net casualty loss deduction or the carryback of the net operating loss deduction.

SECTION 2. This act shall take effect and be in force from and after January 1, 2012.