North Carolina § 105-241 - 6. Statute of limitations for refunds.

§ 105-241. 6. Statute of limitations for refunds.

General. - The general statute of limitations for obtaining a refund of an overpayment applies unless a different period applies under subsection (b) of this section. The general statute of limitations for obtaining a refund of an overpayment is the later of the following: Three years after the due date of the return. Two years after payment of the tax. Exceptions. - The exceptions to the general statute of limitations for obtaining a refund of an overpayment are as follows: Federal Determination. - If a taxpayer files a return reflecting a federal determination and the return is filed within the time required by this Subchapter, the period for requesting a refund is one year after the return reflecting the federal determination is filed or three years after the original return was filed or due to be filed, whichever is later. Waiver. - A taxpayer's waiver of the statute of limitations for making a proposed assessment extends the period in which the taxpayer can obtain a refund to the end of the period extended by the waiver. Worthless Debts or Securities. - Section 6511(d)(1) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to either of the following: The deductibility by the taxpayer under section 166 of the Code of a debt that becomes worthless, or under section 165(g) of the Code of a loss from a security that becomes worthless. The effect of the deductibility of a debt or loss described in subpart a. of this subdivision on the application of a carryover to the taxpayer. Capital Loss and Net Operating Loss Carrybacks. - Section 6511(d)(2) of the Code applies to an overpayment of the tax levied in Part 2 or 3 of Article 4 of this Chapter to the extent the overpayment is attributable to a capital loss carryback under section 1212(c) of the Code or to a net operating loss carryback under section 172 of the Code. Contingent Event. - The period to request a refund of an overpayment may be extended once as provided in this subdivision: Litigation or a State Tax Audit. - If a taxpayer is subject to litigation or a state tax audit that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under this section, the period to request a refund of an overpayment is six months after the litigation or state tax audit concludes. The taxpayer must file written notice to the Secretary prior to expiration of the statute of limitations under this section. The notice must identify and describe the litigation or state tax audit, identify the type of tax, list the return or payment affected, and state in clear terms the basis for and an estimated amount of the overpayment. Other Event. - If a taxpayer contends that an event has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under this section, the taxpayer may submit a written request to the Secretary seeking an extension of the statute of limitations. The taxpayer must file a written request to the Secretary prior to expiration of the statute of limitations under this section. The request must establish by clear, convincing proof that the event is beyond the taxpayer's control and prevents the taxpayer from timely filing an accurate and definite request for a refund of an overpayment. The Secretary's decision on the request is final and is not subject to administrative or judicial review. Expired. History (2007-491, s. 1; 2013-414, s. 47(a); 2015-6, s. 2.16; 2016-6, s. 5(a); 2019-169, s. 6.1(a).) Editor's Note. - Session Laws 2015-6, s. 2.24(a)-(d), provides: "(a) Purpose. - The purpose of this section is to extend the statute of limitations for requesting a refund of State income taxes to conform to federal tax treatment of the rollover of an airline payment amount by a qualified airline employee to a traditional or Roth IRA so as to prevent double taxation of the amount for State income tax purposes. "(b) Definitions. - The following definitions apply in this section: "(1) Airline payment amount. - Defined in section 1106(c)(1) of Public Law 112-95, as amended by Public Law 113-243. "(2) Qualified airline employee. - Defined in section 1106(c)(2) of Public Law 112-95, as amended by Public Law 113-243. "(c) Extension of Time to File Claim for Refund. - Notwithstanding the general statute of limitations for obtaining a refund of an overpayment of tax under G.S. 105-241.6(a) , a qualified airline employee, or the surviving spouse of a qualified airline employee, that meets all of the following conditions may apply to the Department of Revenue for a refund of the State individual income tax paid on the airline payment amount that was transferred to a traditional IRA: "(1) Received an airline payment amount in a taxable year beginning before January 1, 2012, and included the amount in federal adjusted gross income. "(2) Transferred any portion of the airline payment amount to a traditional IRA, either directly or indirectly from a Roth IRA, by August 13, 2012. "(3) Filed a claim for refund of federal individual income tax paid on the airline payment amount by April 15, 2015, that was accepted by the Internal Revenue Service. "(d) Late Refund Request. - A request for a refund under this section must be made to the Secretary of Revenue on or before October 15, 2015. A request for a refund received after that date is barred." Session Laws 2016-5, s. 5(a), which added subdivision (b)(6), also provided that subdivision (b)(6) would expire effective December 16, 2016. Session Laws 2016-5, s. 6.1, provides, in part: "Notwithstanding the general statute of limitations for obtaining a refund of an overpayment of tax under G.S. 105-241.6(a) , a taxpayer that had an amount added to taxable income as deferred income under section 108(i)(1) of the Internal Revenue Code and the amount would be excluded under Sections 1.9, 2.1, or 2.4 of this act may apply to the Department of Revenue for a refund of the State income tax paid on the deferred income. A request for a refund under this section must be made to the Secretary of Revenue on or before July 1, 2016. A request for a refund received after that date is barred unless authorized by G.S. 105-241.6(a) ." Session Laws 2018-5, s. 38.5(aa), provides, in part: "Subsection (k) of this section is effective retroactively to July 1, 2014. A person who paid sales and use tax for a return period ending prior to the date this section becomes law on an item exempt from sales and use tax pursuant to G.S. 105-164.13 E, as amended by subsection (k) of this section, may apply to the Department of Revenue for a refund of any excess tax paid to the extent the refund is the result of the change in the law enacted by subsection (k) of this section. A request for a refund must be made on or before October 1, 2018. Notwithstanding G.S. 105-241.6 , a request for a refund received after this date is barred and the provisions of G.S. 105-164.11 do not apply." Session Laws 2019-169, s. 6.1(b), made the amendments to subdivision (b)(5) of this section by Session Laws 2019-169, s. 6.1(a), effective July 26, 2019, and applicable to a request for a refund of an overpayment of tax filed on or after that date. Effect of Amendments. - Session Laws 2013-414, s. 47(a), effective January 1, 2014, added subdivision (b)(5). For applicability, see editor's note. Session Laws 2015-6, s. 2.16, effective April 9, 2015, rewrote subdivision (b)(5). Session Laws 2016-6, s. 5(a), effective June 1, 2016 and expiring December 19, 2016, added subdivision (b)(6). Session Laws 2019-169, s. 6.1(a), rewrote subdivision (b)(5). For effective date and applicability, see editor's note.