Exceptions to the Period of Limitation for Assessment and Collection
- In cases of false or fraudulent returns with intent to evade tax or failure to file returns, taxes may be assessed or collection proceedings started within ten years after discovery of fraud or omission.
- Fraud assessments that have become final and executory require judicial acknowledgment of fraud in civil or criminal collection actions.
- Both taxpayer and Commissioner may agree in writing to extend the assessment period beyond the prescribed three years.
- Such agreements on extended periods can be further extended by subsequent written agreements before expiration of the previous period.
Collection Period for Assessed Taxes
- Internal revenue taxes assessed within the three-year period must be collected within three years after the assessment via distraint, levy, or court proceedings.
- For taxes assessed under an agreed extended period, collection must be within that agreed period, which can be extended similarly via written agreements.
Exclusion for Tax Amnesty Returns
- Examination, investigation, or inquiry into tax returns filed under any tax amnesty law or decree is explicitly prohibited.
Applicability of the Amendments
- The reduced period of limitation from five to three years applies to assessments of internal revenue taxes starting from the taxable year 1984.