§ 74. Limitations on Assessment. 1. General.--Except as otherwise
provided in this section, any tax under the named parts 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 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 part two or part three of
this title, the taxpayer fails to file a report or amended return
required thereunder, in respect of an increase or decrease in federal
taxable income or federal 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 income tax purposes; or

(4) in the case of the tax imposed under part two of this title, 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 part 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 director
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 changed or corrected federal income. In the case of the
tax imposed under part two or part three of this title, if the taxpayer
files a report or amended return required thereunder, in respect of an
increase or decrease in federal taxable income or federal 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 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 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 net operating loss carryback.--If a
deficiency of tax under part two of this title is attributable to the
application to taxpayer of a net operating loss carryback, 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 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 director 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, and (C) the dissolution is
completed;

(2) (A) such written request notifies the director 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 (3) or (4) 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 (3) of paragraph (g) of
subdivision eight of section two of this title, 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 part two of this title, 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
parts an amount properly includable therein which is in excess of
twenty-five percentum of the amount of gross income stated in the
return.

For purposes of this subdivision--

(a) the term "gross income" means gross income for federal income tax
purposes as reportable on a return under part two of this title 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 parts 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
director 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 transferee's liability) shall, after the mailing of a notice of
deficiency, be suspended for the period during which the director of
finance is prohibited under subdivision three of section seventy-two
from making the assessment or from collecting by levy.