{"data":{"id":"us-ky/krs-67.775","jurisdiction":"us-ky","citation":"KRS 67.775","heading":"Auditing of returns -- Payment of additional tax -- Federal audit.","body":"(1) As used in this section and KRS 67.778, unless the context requires otherwise:\n(a) \"Conclusion of the federal audit\" means the date that the adjustments made by\nthe Internal Revenue Service to net income or gross receipts as reported on the\nbusiness entity's federal income tax return become final and unappealable; and\n(b) \"Final determination of the federal audit\" means the revenue agent's report or\nother documents reflecting the final and unappealable adjustments made by\nthe Internal Revenue Service.\n(2) As soon as practicable after each return is received, the tax district may examine\nand audit it. If the amount of tax computed by the tax district is greater than the\namount returned by the business entity, the additional tax shall be assessed and a\nnotice of assessment mailed to the business entity by the tax district within five (5)\nyears from the date the return was filed, except as otherwise provided in this\nsubsection.\n(a) In the case of a failure to file a return or of a fraudulent return the additiona l\ntax may be assessed at any time.\n(b) In the case of a return where a business entity understates net profit or gross\nreceipts, or omits an amount properly includable in net profit or gross receipts,\nor both, which understatement or omission or both is in  excess of twenty-five\npercent (25%) of the amount of net profit or gross receipts stated in the return,\nthe additional tax may be assessed at any time within six (6) years after the\nreturn was filed.\n(c) In the case of an assessment of additional tax rela ting directly to adjustments\nresulting from a final determination of a federal audit, the additional tax may\nbe assessed before the expiration of the times provided in this subsection, or\nsix (6) months from the date the tax district receives the final det ermination of\nthe federal audit from the business entity, whichever is later.\nThe times provided in this subsection may be extended by agreement between the\nbusiness entity and the tax district. For the purposes of this subsection, a return filed\nbefore the last day prescribed by law for filing the return shall be considered as filed\non the last day. Any extension granted for filing the return shall also be considered\nas extending the last day prescribed by law for filing the return.\n(3) Every business ent ity shall submit a copy of the final determination of the federal\naudit within thirty (30) days of the conclusion of the federal audit.\n(4) A tax district may initiate a civil action for the collection of any additional tax\nwithin the times prescribed in subsection (2) of this section.","path":["KRS Chapter 67"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=23791","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:26Z","sha256":"57b0e6fca272a645e1f9d2a42fa14e8c940fef946983bacb1f5f550edc0e6783","source_id":"us-ky","stale":false,"prev":"us-ky/krs-67.773","next":"us-ky/krs-67.778"},"notice":"GroundRules: Original legal text. Not legal advice."}