Section 11-674. Limitations on assessment

1. General. Except as otherwise
  provided in this section, any tax under the named subchapters  shall  be
  assessed  within  three years after the return was filed (whether or not
  such return was filed on or after the date prescribed).
    2. Time return deemed filed. For  the  purposes  of  this  section,  a
  return  of  tax  filed  before  the  last  day  prescribed  by law or by
  regulations promulgated pursuant to law for the filing thereof shall  be
  deemed to be filed on such last day.
    3. Exceptions.
    (a) Assessment at any time. The tax may be assessed at any time if:
    (1) no return is filed,
    (2) a false or fraudulent return is filed with intent to evade tax,
    (3)  in  the  case of the tax imposed under subchapter two or three of
  this chapter, the taxpayer fails to file  a  report  or  amended  return
  required thereunder, in respect of an increase or decrease in federal or
  New  York  state  taxable  income, alternative minimum taxable income or
  other basis of tax or federal or New York state tax, or in respect of  a
  change  or correction or renegotiation or in respect of the execution of
  a  notice  of  waiver  report  of  which  is  required  thereunder,   or
  computation or recomputation of tax, which is treated in the same manner
  as  if  it  were  a  deficiency for federal or New York state income tax
  purposes, or
    (4) in the case of the  tax  imposed  under  subchapter  two  of  this
  chapter, the taxpayer fails to file a report or amended return or report
  required  thereunder,  in respect of a change or correction of sales and
  compensating use tax liability, relating to the purchase or use of items
  for which a sales or compensating use tax credit against the tax imposed
  by subchapter two was claimed.
    (b) Extension by agreement. Where, before the expiration of  the  time
  prescribed  in  this  section  for  the  assessment  of  tax,  both  the
  commissioner of finance and the taxpayer have consented  in  writing  to
  its  assessment  after  such  time,  the tax may be assessed 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 made before the
  expiration of the period previously agreed upon.
    (c)  Report  of federal or New York state change or correction. In the
  case of the tax imposed under subchapter two or three of  this  chapter,
  if the taxpayer files a report or amended return required thereunder, in
  respect  of an increase or decrease in federal or New York state taxable
  income, alternative minimum taxable income or  other  basis  of  tax  or
  federal  or  New York state tax, or in respect of a change or correction
  or renegotiation, or in respect of the execution of a notice  of  waiver
  report  of which is required thereunder, or computation or recomputation
  of tax, which is treated in the same manner as if it were  a  deficiency
  for  federal  or  New York state income tax purposes, the assessment (if
  not deemed to have been made upon the filing of the  report  or  amended
  return)  may  be  made at any time within two years after such report or
  amended return was filed. The amount of such assessment of tax shall not
  exceed the amount of the increase  in  city  tax  attributable  to  such
  federal  or  New  York  state  change or correction or renegotiation, or
  computation or recomputation of tax. The provisions  of  this  paragraph
  shall  not  affect  the  time  within  which  or the amount for which an
  assessment may otherwise be made.
    (d) Deficiency attributable to carry back.  If  a  deficiency  of  tax
  under  subchapter two of this chapter is attributable to the application
  to taxpayer of a net operating loss carry back or a capital  loss  carry
  back,  it  may be assessed at any time that a deficiency for the taxable
  year of the loss may be assessed.

    (e) Recovery  of  erroneous  refund.  An  erroneous  refund  shall  be
  considered an underpayment of tax on the date made, and an assessment of
  a  deficiency arising out of an erroneous refund may be made at any time
  within two years  from  the  making  of  the  refund,  except  that  the
  assessment  may  be made within five years from the making of the refund
  if it appears that any part of  the  refund  was  induced  by  fraud  or
  misrepresentation of a material fact.
    (f)  Request  for  prompt assessment. The tax shall be assessed within
  eighteen months after written request therefor (made after the return is
  filed) by the taxpayer or by a fiduciary representing the taxpayer,  but
  not  more  than  three  years  after  the  return  was  filed, except as
  otherwise provided  in  this  subdivision  and  subdivision  four.  This
  subdivision shall not apply unless:
    (1) (A) such written request notifies the commissioner of finance that
  the  taxpayer  contemplates  dissolution  at or before the expiration of
  such eighteen-month period, (B) the dissolution is in good  faith  begun
  before the expiration of such eighteen-month period, (C) the dissolution
  is completed;
    (2) (A) such written request notifies the commissioner of finance that
  a  dissolution  has in good faith been begun, and (B) the dissolution is
  completed; or
    (3) a dissolution has been completed at the time such written  request
  is made.
    (g)  Change  of  the  allocation  of  taxpayer's income or capital. No
  change of the allocation of income or capital upon which the  taxpayer's
  return  (or  any additional assessment) was based shall be made where an
  assessment of tax is made during the  additional  period  of  limitation
  under  subparagraph  three  or four of paragraph (a), or under paragraph
  (c), (d) or (i); and where any such assessment has been made, or where a
  notice of deficiency has been mailed to the taxpayer on the basis of any
  such proposed assessment, no change  of  the  allocation  of  income  or
  capital shall be made in a proceeding on the taxpayer's claim for refund
  of  such assessment or on the taxpayer's petition for redetermination of
  such deficiency.
    (h)  Report   concerning   waste   treatment   facility.   Under   the
  circumstances  described  in  subparagraph  three  of  paragraph  (g) of
  subdivision eight of section 11-602 of this  chapter,  the  tax  may  be
  assessed  within  three  years after the filing of the report containing
  the information required by such paragraph.
    (i) Report of changed or corrected  sales  and  compensating  use  tax
  liability.  In  the  case  of a tax imposed under subchapter two of this
  chapter, if the taxpayer files a report  or  amended  return  or  report
  required  thereunder,  in respect of a change or correction of sales and
  compensating use tax liability, the assessment (if not  deemed  to  have
  been  made upon the filing of the report) may be made at any time within
  two years after such report or amended return or report was  filed.  The
  amount  of  such  assessment  of  tax shall not exceed the amount of the
  increase in city tax attributable to such state  change  or  correction.
  The  provisions of this paragraph shall not affect the time within which
  or the amount for which an assessment may otherwise be made.
    4. Omission of income on return. The tax may be assessed at  any  time
  within  six  years  after  the return was filed if a taxpayer omits from
  gross income required to be reported on a return under any of the  named
  subchapters  an amount properly includable therein which is in excess of
  twenty-five per centum of the amount  of  gross  income  stated  in  the
  return.
    For the purposes of this subdivision:

    (a)  the term "gross income" means gross income for federal income tax
  purposes as reportable on a return under subchapter two of this  chapter
  and  "gross  earnings",  "gross  income,"  "gross  operating income" and
  "gross direct premiums less return premiums," as those terms are used in
  whichever of the named subchapters is applicable;
    (b)  there shall not be taken into account any amount which is omitted
  in the return if such amount  is  disclosed  in  the  return,  or  in  a
  statement  attached  to  the return, in a manner adequate to apprise the
  commissioner of finance of the nature and amount of such item.
    5. Suspension of running of period of limitations. The running of  the
  period of limitations on assessment or collection of tax or other amount
  (or  of a tranferee's liability) shall, after the mailing of a notice of
  deficiency, be suspended for the period during which the commissioner of
  finance is prohibited under subdivision three of section 11-672 of  this
  subchapter from making the assessment or from collecting by levy.