Exception to the General Statute of Limitations for Certain Events
N.C. Gen. Stat. § 105-241.6(b)(5) provides an exception to the general statute of limitations for obtaining a refund of an overpayment due to a contingent event. The statute addresses two types of contingent events whereby the general statute of limitations for refunds may be extended once:
- Litigation or State Tax Audits, and
- Other Events
Litigation or State Tax Audits
Statutory Requirements (N.C. Gen. Stat. § 105-241.6(b)(5)(a))
If a taxpayer is subject to litigation or a state tax audit that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under N.C. Gen. Stat. § 105-241.6, the period to request a refund of an overpayment is six months after the litigation or state tax audit concludes.
The taxpayer must file written notice to the Secretary prior to expiration of the statute of limitations under N.C. Gen. Stat. § 105-241.6. The notice must identify and describe the litigation or state tax audit, identify the type of tax, list the return or payment affected, and state in clear terms the basis for and an estimated amount of the overpayment.
Requesting a Contingent Event Exception Due to Litigation or State Tax Audit
To provide written notice to the Secretary, you should Complete Parts 1 and 2 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14, or a letter sent in lieu of Form NC-14, will not be accepted if it does not include all of the required information or is not filed prior to the expiration of the statute of limitations.
The Department will notify you in writing that either (1) the contingent event notice has been received with all required information or (2) the contingent event notice has been received without all required information.
A request for a refund of an overpayment must be filed within six months after the contingent event concludes. Include a copy of the Department’s acknowledgment of an accepted notice.
Other Events
Statutory Requirements (N.C. Gen. Stat. § 105-241.6(b)(5)(b))
If a taxpayer contends that an event, other than litigation or a state tax audit, has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the period under N.C. Gen. Stat. § 105-241.6, the taxpayer may submit a written request to the Secretary seeking an extension of the statute of limitations. The taxpayer must file a written request to the Secretary prior to expiration of the statute of limitations under N.C. Gen. Stat. § 105-241.6.
The request must establish by clear, convincing proof that the event is beyond the taxpayer's control and prevents the taxpayer from timely filing an accurate and definite request for a refund of an overpayment. The Secretary's decision on the request is final and is not subject to administrative or judicial review.
Requesting a Contingent Event Exception Due to an Event Other than Litigation or a State Tax Audit
To provide written notice to the Secretary, you should complete Parts 1 and 3 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14, or a letter sent in lieu of Form NC-14, will not be accepted as a request for an extension if it does not include all required information or is not filed prior to the expiration of the statute of limitations.
The Department will respond in writing as to whether the request for an extension of the statute of limitations is granted or declined by the Secretary of Revenue. The Secretary of Revenue’s decision to grant or decline the request is final and is not subject to administrative or judicial review.
If the extension of the statute of limitations is granted, the request for a refund of an overpayment must be filed within six months after the event or condition concludes. Include a copy of the Department’s grant of the request for an extension of the statute of limitations with the request for a refund of an overpayment.
Where to Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations
Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations, or a letter in lieu of Form NC-14, to P.O. Box 871, Raleigh, North Carolina 27602-0871. Address the envelope to the attention of the taxing division for the tax to which the event or condition applies. For example:
Corporate Tax Division
Personal Taxes Division
Sales and Use Tax Division
Excise Tax Division