Section 316-24-215 - RECORDS215.01In General. Any business entity doing business in Nebraska must keep permanent books of account or records that are sufficient to establish the amount of gross income, deductions, credits, or other matters which may be required to support the Nebraska corporation income tax return or information return, if any business entity or person fails to keep books of account or records, the Department may issue a notice of deficiency determination based on the best information available, including, but not limited to, records from the IRS, financial institutions, employers, payors, vendors, or others.215.02Retention of Records. Each business entity must retain all records relating to a tax year for as long as the records may be material in administering the Nebraska income tax; while any refund claim or redetermination of a deficiency determination is pending; or while any federal audit assessment, or any other action is pending, unless the Department authorizes their destruction in writing at an earlier date. 215.02A If the Department issues a balance due notice or a notice of deficiency determination for a tax year, the business entity must retain all records relating to that tax year until the balance due or deficiency determination has been satisfied, abated, settled, or disallowed, and has become final.215.02B If the business entity is participating in a tax incentive program, for example the Nebraska Advantage Act, records must be retained throughout the carryover period.215.02C If the business entity incurs a net operating loss or capital loss, the records substantiating the loss must be retained until the statute of limitations for issuing a notice of deficiency determination expires for the last year the loss is claimed.215.03Books and Records Reconstruction. Books and records that are destroyed should be reconstructed by the business entity to the greatest extent possible from records kept by financial institutions, customers, vendors, and others.215.04Availability of Books and Records. These books or records must be kept available at all times for inspection by the Tax Commissioner or any agent or representative designated by the Tax Commissioner for the purpose of ascertaining the correctness of any return or other document required to be filed under the Nebraska Revenue Act or for the purpose of ascertaining whether the income of a business entity is subject to Nebraska income tax. 215.04A Right to Examine Records. The Department or its agents, has the right to examine, inspect make, request and retain paper or electronic copies of any books, papers, records, electronic media, and equipment of any person to audit or review the accuracy of any return filed; or if no return is filed by the person, to ascertain and determine the amount that must be paid. A taxpayer must provide records electronically upon request of the Department if the taxpayer maintains the records electronically.215.04B Administrative Subpoena. The Tax Commissioner may require taxpayers undergoing an audit or other review to provide records that are necessary to make a proper determination of the taxpayer's compliance with and the liability under the laws of this state. If a reasonable request to produce records is refused, the Tax Commissioner may issue an administrative subpoena. 215.04B(1) An administrative subpoena must clearly state the scope of the demand for records and any other requirements, and state when, where, and how to comply with the administrative subpoena.215.04B(2) An administrative subpoena may be enforced by the Attorney General acting on behalf of the Tax Commissioner, in an action filed in the district court for Lancaster County.215.04B(3) The Tax Commissioner may also apply to the district court for an order directing the person to comply with the request for records. If the person refuses an order from the district court, he or she may be found in contempt of court.215.05Criminal Penalty. Willful failure to keep, retain, or make available any records as required under this regulation is a Class II misdemeanor. If a natural disaster destroys records that does not, by itself constitute willful failure to keep or retain records.316 Neb. Admin. Code, ch. 24, § 215
Adopted effective 7/5/2020