Read the full stored bill text
A3238 TR
ASSEMBLY, No. 3238
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman DAN HUTCHISON
District 4 (Atlantic, Camden and Gloucester)
Assemblyman STERLEY S. STANLEY
District 18 (Middlesex)
Co-Sponsored by:
Assemblywoman Speight
SYNOPSIS
���� Eliminates statute of limitations on income tax
assessments that arise out of erroneous refunds induced by fraud.
CURRENT VERSION OF TEXT
���� As reported by the Assembly State and Local
Government Committee with technical review.
��
An Act
concerning statutes of limitations on certain gross
income tax assessments and amending N.J.S.54A:9-4.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� N.J.S.54A:9-4 is amended
to read as follows:
���� 54A:9-4. (a) General. Except
as otherwise provided in this section, any tax under this act shall be assessed
within
[
3
]
three
years after the return was filed (whether or not such return was filed on or
after the date prescribed).
���� (b) Time return deemed filed.
���� (1) Early return.� For
purposes of this section a return of income tax, except withholding 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.
���� (2) Return of withholding
tax.� For purposes of this section, if a return of withholding tax for any
period ending with or within a calendar year is filed before April 15 of the
succeeding calendar year, such return shall be deemed to be filed on April 15
of such succeeding calendar year.
���� (c) Exceptions.
���� (1) Assessment at any time.�
The tax may be assessed at any time
[
if--
]
if:
���� (A) No return is filed
[
,
]
;
���� (B) A false or fraudulent
return is filed with intent to evade tax,
regardless of whether the false or
fraudulent return results in a refund to the taxpayer, which false or
fraudulent return shall not include a taxpayer�s inadvertence, reliance on
incorrect technical advice, honest difference of opinion, negligence, or carelessness;
or
���� (C) The taxpayer fails to
comply with N.J.S.54A:8-7, in not
reporting a change or correction
increasing the taxpayer's Federal taxable income as reported on
[
his
]
the
taxpayer�s
Federal income tax return, or in not reporting a change or
correction which is treated in the same manner as if it were a deficiency for
Federal income tax purposes, in not filing an amended return, or, for both
partners and partnerships, in not reporting final federal adjustments resulting
from a partnership audit pursuant to section 6225(a)(1) of the Internal Revenue
Code (26 U.S.C. s. 6225(a)(1)).
���� (2) Extension by agreement.�
Where, before the expiration of the time prescribed in this section for the
assessment of tax, both the director 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.
���� (3) Report of changed or
corrected Federal income.� If the taxpayer shall, pursuant to subsection a. of
N.J.S.54A:8-7, report a change or correction or file an amended return
increasing the taxpayer's Federal taxable income or report a change or correction
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
[
2
]
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 New Jersey tax
attributable to such Federal 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) Recovery of erroneous
refund.� An erroneous refund shall be considered an underpayment of tax on the
date made
[
,
and an
]
.� An
assessment of a deficiency arising out of an erroneous refund may
be made
[
at
any time
]
:
within
[
3
]
three
years from the making of the refund
[
,
except that the assessment may be made within 5 years from the making of the
refund if
]
; or at any time if
it appears that any part of the refund was induced
by
[
fraud
or misrepresentation of a material fact
]
the filing of a false or fraudulent return with intent to evade tax, which
false or fraudulent return shall not include a taxpayer�s inadvertence,
reliance on incorrect technical advice, honest difference of opinion,
negligence, or carelessness
.
���� (5) Request for prompt
assessment.� If a return is required for a decedent or for the decedent's
estate during the period of administration, the tax shall be assessed within 18
months after written request therefor (made after the return is filed) by the
executor, administrator or other person representing the estate of such
decedent, but not more than
[
3
]
three
years after the return was filed, except as otherwise provided in this
subsection and subsection (d).
���� (6) Final federal adjustments
resulting from a Federal Partnership Audit.� Tax may be assessed against the
partnership, direct or indirect partners, or both, within two years of the time
that a partnership files a Federal Adjustments Report as required by
N.J.S.54A:8-7 that includes Final Federal Adjustments from a federal
partnership audit or administrative adjustments request that would result in
additional New Jersey income tax for one or more direct or indirect partners.
���� (d) Omission of income on
return.� The tax may be assessed at any time within
[
6
]
six
years after the
return was filed
[
if--
]
if:
���� (1) An individual omits from
[
his
]
the
individual�s
New Jersey income an amount properly includible therein which
is in excess of
[
25%
]
25 percent
of the amount of New Jersey income stated in the return; or
���� (2) An estate or trust omits
income from its return in an amount in excess of
[
25%
]
25 percent
of its income
determined as if it were an individual, computing
[
his
]
the individual�s
New
Jersey income under this act.
���� For purposes of this
subsection 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 the
nature and amount of such item.
���� (e)�� Suspension of running of
period of limitation.� 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 is prohibited under subsection (c) of
[
section
]
N.J.S.54A:9-2
from making the assessment or from collecting by levy.
(cf: P.L.2022, c.133, s.4)
���� 2. �This act shall take effect
immediately and shall retroactively apply to assessments of deficiencies
arising out of erroneous refunds, which were subject to assessment pursuant to
paragraph (4) of subsection (c) of N.J.S.54A:9-4 and were made within the five
years preceding the date of enactment of this act.�