GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	3

SENATE BILL 121
Finance Committee Substitute Adopted 6/30/95
Third Edition Engrossed 7/7/95

Short Title:  Inheritance Tax Changes.	(Public)

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Sponsors:

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Referred to:  

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February 1, 1995

A BILL TO BE ENTITLED
AN ACT TO REVISE THE PROCEDURES FOR ASSESSMENTS OF INHERITANCE TAX FOLLOWING A FEDERAL DETERMINATION.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-29 reads as rewritten:
"§ 105-29. Uniform valuation.
		When filing an inheritance tax return, the personal representative of an estate must report as the value of the estate the value that is reported on an estate tax return filed for the estate under the Code.  If the federal government does not correct or otherwise determine the value of an estate reported on an estate tax return, the Secretary may determine the value based on evidence of any kind that becomes available to the Secretary from any source.
If the federal government corrects or otherwise determines the value of an estate reported on an estate tax return, the personal representative must, within two years after being notified of the correction or final determination by the federal government, file an inheritance tax return with the Secretary reflecting the corrected or determined value.  The Secretary must adopt the value as corrected or determined by the federal government for federal estate tax purposes.  The Secretary shall assess and collect any additional tax due on the transfer of property in the estate as provided in Article 9 of this Chapter and shall refund any overpayment of tax as provided in Article 9 of this Chapter.  A personal representative who fails to report a federal correction or determination is subject to the penalties in G.S. 105-236 and forfeits the right of the estate to any refund due by reason of the determination."
Sec. 2.  G.S. 105-241.1(e) reads as rewritten:
"(e)	Statute of Limitations. – The Secretary may propose an assessment of tax due from a taxpayer at any time if (i) the taxpayer did not file a proper application for a license or did not file a return, (ii) the taxpayer filed a false or fraudulent application or return, or (iii) the taxpayer attempted in any manner to fraudulently evade or defeat the tax.  If a taxpayer files a return reflecting a federal determination as provided in G.S. 105-29, 105-130.20, 105-159, 105-160.8, 105-163.6A, or 105-197.1, the Secretary must propose an assessment of any tax due within one year after the return is filed or within three years of when the original return was filed or due to be filed, whichever is later.  If there is a federal determination and the taxpayer does not file the required return, the Secretary must propose an assessment of any tax due within three years after the date the Secretary received the final report of the federal determination.  If a taxpayer forfeits a tax credit pursuant to G.S. 105-163.014, the Secretary must assess any tax or additional tax due as a result of the forfeiture within three years after the date of the forfeiture.  In all other cases, the Secretary must propose an assessment of any tax due from a taxpayer within three years after the date the taxpayer filed an application for a license or a return or the date the application or return was required by law to be filed, whichever is later.  If the Secretary proposes an assessment of tax within the time provided in this section, the final assessment of the tax is timely.
A taxpayer may make a written waiver of any of the limitations of time set out in this subsection, for either a definite or an indefinite time.  If the Secretary accepts the taxpayer's waiver, the Secretary may propose an assessment at any time within the time extended by the waiver."
Sec. 3.  This act becomes effective August 1, 1995, and applies to assessments of taxes for which the statute of limitations had not expired on or before August 1, 1995.