Section 316-24-255 - REPORTING ADJUSTMENTS TO FEDERAL INCOME TAX255.01 Any change made by the IRS, the U.S. Tax Court, or any other court of competent jurisdiction to the federal taxable income or tax liability of a business entity, a unitary group, or a member of a unitary group, must be reported to the Department within 60 days after the final determination of the change. 255.01A Reportable changes include, but are not limited to, changes made to the federal return by either the IRS Processing Center or any other IRS office.255.01B When reporting any change to federal taxable income, the taxpayer must famish the Department complete information regarding the amount of income reported and taxes paid to the U.S. The information furnished must also concede the accuracy of the final determination or give a statement outlining the specific errors in the final determination.255.02 Any adjustments made on federal amended returns which do not result in a federal credit or refund must be reported to the Department within 60 days after filing the federal amended return. Any adjustments made on federal amended returns which result in a federal credit or refund must be reported to the Department within 60 days after the taxpayer's receipt of proof that the federal credit or refund was accepted by the IRS, or within any other applicable period provided by law, whichever is later.255.03 Adjustments made on a federal amended return, by the IRS, by order of the U.S. Tax Court, or other order by a court of competent jurisdiction must be reported to the Department by filing: 255.03A An Amended Nebraska Corporation Income Tax Return, Form 1120XN, for the tax year involved if the taxpayer is a corporate taxpayer;255.03B A Nebraska S Corporation Income Tax Return, Form 1120-SN, with the "Amended Return" box checked if the taxpayer is an S corporation; or255.03C A Nebraska Return of Partnership Income, Form 1065N, with the "Amended Return" box checked if the taxpayer is taxed as a partnership.255.04 Each amended return for Nebraska must be filed separately and cannot be attached to a return for another tax year. Any additional tax that is due must be paid when the amended return is filed.255.05 The amended return for Nebraska must include copies of the federal amended return, the IRS report, or the order of the U.S. Tax Court or other order by a court of competent jurisdiction, whichever is applicable; and any other document that is sufficient to substantiate the adjustments claimed.255.06Final Determination. The following acts are considered a final determination: 255.06A A decision by the U.S. Tax Court or a judgment decree, or other order by a court of competent jurisdiction which has become final;255.06B A closing agreement authorized by IRC § 7121 which relates either to the total tax liability, or to one or more separate items affecting the Nebraska tax liability. A closing agreement becomes final for purposes of this regulation on the date it is approved by the IRS:255.06C A final disposition by the IRS of a claim for refund;255.06D Any agreement between the taxpayer or a member of a unitary group and the IRS made for the express purpose of determining the tax liability of the taxpayer. To be considered a final determination, the agreement must include a waiver of restrictions on assessment and collection of any deficiencies resulting from the agreement;255.06E Acceptance of an examining officer's findings with regard to the income of a partnership, a fiduciary, or a limited liability company;255.06F Proper payment of any additional tax by the corporate taxpayer or unitary group; or255.06G Any other final determination causing changes in reported federal taxable income.255.07Deficiency; Statute of Limitations.255.07A The Tax Commissioner may issue the taxpayer a notice f deficiency determination at any time if a business entity or an owner of a pass-through entity fails to file an amended return as required by this regulation, or fails to file an amended return to report any change or correction that: 255.07A(1) Increases federal taxable income or tax liability;255.07A(2) Is treated as a deficiency for federal income tax purposes; or255.07A(3) Affects any of these items with respect to any owner.255.07B The notice of deficiency determination issued under Reg-24-255.07A of this section may include any issues exposed by a complete examination of the tax liability for the tax years involved.255.07C The Tax Commissioner may issue the taxpayer a notice of deficiency determination within two years after the report or amended return was filed if: 255.07C(1) A business entity reports any change or correction in its federal taxable income or tax liability, or reports a change or correction which is treated in the same manner as a deficiency for federal income tax purposes; or255.07C(2) An owner of a pass-through entity reports any change or correction in its federal taxable income or tax liability, or reports a change or correction which is treated in the same manner as a deficiency for federal income tax purposes.255.07D The notice of deficiency determination issued under Reg-24-255.07C of this section is limited to the change or correction made by the IRS, the U.S. Tax Court, or any other court of competent jurisdiction.255.07E The Tax Commissioner may issue the business entity or its owners a notice of deficiency determination with respect to any item of entity income during the period covered by any federal or Nebraska extension of the period for issuing a notice of deficiency determination that is signed on behalf of the entity. 255.07E(1) Taxpayers are required to provide the Department with a copy of every executed Federal Form 872, Consent to Extend the Time to Assess Tax; Form 872-A, Special Consent to Extend the Time to Assess Tax; or any other federal form used to extend the time to assess income taxes.255.07E(2) If copies of these federal forms are not provided to the Department within 30 days after they are executed, the Tax Commissioner may issue a notice of deficiency determination within one year after these forms are discovered by the Department For purposes of this subdivision, discovered means the Department has received either the executed federal Form 872, Consent to Extend Time to Assess Tax, or a Federal Audit Status Report that shows the waiver.255.07F The Tax Commissioner may, at any time within the period otherwise applicable, issue a supplemental notice of deficiency determination whenever any prior notice is imperfect or incomplete in any material aspect.255.08Amended Return; Credit or Refund. An amended return reporting a change that results in an overpayment of tax for Nebraska is considered a claim for credit or refund. 255.08A The amount of the credit or refund cannot exceed the amount of the Nebraska tax attributable to the federal change, correction, or the items amended on the federal return.255.08B If the amended return is not filed within 60 days after the final determination of the change, interest on the credit or refund does not accrue after the 60th day.255.08C If the amended return is not filed within two years and 60 days after the final determination of the change, no credit or refund will be granted.255.09Pass-through Entity; Amended Return; Income Tax Withholding. A pass-through entity filing an amended return reporting an increase in its income reported to Nebraska must make a revised calculation of Nebraska income tax to withhold from any nonresident individual owners. 255.09A Revised statements of income tax withheld must be issued by the pass-through entity to nonresident individual owners for use by the owners for filing the appropriate Nebraska individual income tax returns.255.09B When a pass-through entity files an amended return reporting a decrease in its income reported to Nebraska, it may not revise the calculation of Nebraska income tax to withhold from its nonresident individual owners. However, the pass-through entity must provide revised income, deduction and credit computations to its owners to use to file the appropriate Nebraska individual income tax returns. The pass-through entity will not receive a credit or refund of any amount previously withheld and remitted on behalf of its nonresident individual owners.255.09C A publicly traded partnership which did not withhold income tax under 225.02 will not calculate or issue revised income tax withholding statements for its nonresident individual owners.316 Neb. Admin. Code, ch. 24, § 255
Adopted effective 7/5/2020