Wisconsin § 77.59 - Deficiency and refund determinations.

§ 77.59. Deficiency and refund determinations.

77.59(1) (1) The department may, by office audit, determine the tax required to be paid to the state or the refund due to any person pursuant to this subchapter. The determination may be made upon the basis of the facts contained in the return being audited or upon the basis of any other information within the department’s possession. The determination shall be presumed to be correct and the burden of proving it to be incorrect shall be upon the person challenging the correctness thereof. One or more such office audit determinations may be made of the amount due for any one or for more than one period. 77.59(2) (2) Except as provided in sub. (2g) , the department may, by field audit, determine the tax required to be paid to the state or the refund due to any person under this subchapter. The determination may be made upon the basis of the facts contained in the return being audited or upon any other information in the department’s possession. The determination may be made on the basis of sampling, whether or not the person being audited has complete records of transactions and whether or not the person being audited consents. The department may examine and inspect the books, records, memoranda and property of any person in order to verify the tax liability of that person or of another person. The department may subpoena any person to give testimony under oath before it and to produce whatever books, records or memoranda are necessary in order to enable the department to verify the tax liability of that person or of another person. The determination shall be presumed to be correct and the burden of proving it to be incorrect shall be upon the person challenging its correctness. A determination by the department in a field audit becomes final at the expiration of the appeal periods provided in sub. (6) , and the tax liability of the taxpayer for the period audited may not be subsequently adjusted except as provided in sub. (4) (b) , (8) or (8m) . If the taxpayer files or is required to file more than one return for the taxpayer’s fiscal year or for a calendar year, the determination made by field audit for that fiscal or calendar year shall be based on the receipts, purchases, deductions and exemptions for the entire fiscal or calendar year. 77.59(2g) (2g) The department shall promulgate rules to establish criteria applicable to field audits conducted under this subchapter for which an auditor uses a statistical sampling method whereby the auditor randomly selects a sample of transactions and uses probability theory to evaluate the sample results. The department shall establish criteria under this subsection to provide that any person with less than $10,000,000 in annual sales during any year at issue in a field audit may choose to have the audit conducted using statistical sampling as described in this subsection. In addition, the department shall establish criteria under this subsection that specifies the number of transactions necessary to qualify for statistical sampling and the maximum sample size. 77.59(2m) (2m) The department may audit, or may authorize others to audit, sellers and certified service providers who are registered with the department pursuant to the agreement, as defined in s. 77.65 (2) (a) . 77.59(3) (3) The department may not make a determination of the tax liability of a person unless the department gives written notice of the determination to the person within 4 years after the due date of the person’s Wisconsin income or franchise tax return that corresponds to the date the sale or purchase was completed or, if exempt, within 4 years of the 15th day of the 4th month of the year following the close of the calendar or fiscal year that corresponds to the date the sale or purchase was completed; within 4 years of the dissolution of a corporation; or within 4 years of the date any sales and use tax return required to be filed for any period in that year was filed, whichever is later. The notice required under this subsection shall specify whether the determination is an office audit determination or a field audit determination, and the notice shall be in writing. If the department is unable to obtain service as provided in s. 73.03 (73m) , publication of the notice as a class 3 notice, under ch. 985 , is considered service of notice in any case where notice is required under this subchapter. 77.59(3m) (3m) If the taxpayer has consented in writing to the giving of notice of determination after the time under sub. (3) , the notice may be given, and the taxpayer may file a claim for a refund, at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing. 77.59(4) (4) 77.59(4)(a) (a) Except as provided in sub. (3m) , at any time within 4 years after the due date of a person’s Wisconsin income or franchise tax return that corresponds to the date the sale or purchase was completed or, if exempt, within 4 years of the 15th day of the 4th month of the year following the close of the calendar or fiscal year that corresponds to the date the sale or purchase was completed, that person may, unless a determination by the department by office audit or field audit of a seller has been made, and unless a determination by office audit of a buyer other than an audit in which the tax that is the subject of the refund claim was not adjusted has been made, and unless a determination by field audit of the buyer has been made, file with the department a claim for refund of taxes paid to the department by that person. If the amount of the claim is at least $50 or if either the seller has ceased doing business, the buyer is being field audited, or the seller may no longer file a claim, the buyer may, within the period under this subsection, file a claim with the department for a refund of the taxes paid to the seller. A claim is timely if it fulfills the requirements under s. 77.61 (14) . A buyer may claim a refund under this paragraph only on a form prescribed by the department, only by signing that form, and only if the seller signs the form unless the department waives that requirement. If both a buyer and a seller file a valid claim for the same refund, the department may pay either claim. The claim for refund shall be regarded as a request for determination. The determination thus requested shall be made by the department within one year after the claim for refund is received by it unless the person has consented in writing to an extension of the one-year time period prior to its expiration. 77.59(4)(b) (b) A claim for refund that is not to be passed along to customers under sub. (8m) may be made within 2 years of the determination of a tax assessed by office audit or field audit and paid if the tax was not protested by the filing of a petition for redetermination. No claim for refund may be allowed with regard to items that were not adjusted in the office audit or field audit. A claim is timely if it fulfills the requirements under s. 77.61 (14) . If a claim is filed under this paragraph, the department may make an additional assessment in respect to any item that was a subject of the prior assessment. 77.59(5) (5) The department may offset the amount of any refund for a period, together with interest on the refund, against deficiencies for another period, and against penalties and interest on the deficiencies, or against any amount of whatever kind, due and owing on the books of the department from the person who is entitled to the refund. If the refund is to be paid to a buyer, the department may also set off amounts in the manner in which it sets off income tax and franchise tax refunds under s.