Kan. Admin. Regs. § 92-19-49d - Review of refund applications; processing of refund claims
(a) Statute of
limitations.
(1) Whenever a retailer or
consumer that has filed a sales or compensating use tax return seeks a refund
for the erroneous payment of the tax, penalty, or interest, the refund claim
shall be filed within three years from the due date of the return for the
reporting period as specified in
K.S.A. 79-3607, and amendments thereto, unless the
director of taxation has extended the time for filing the refund request
pursuant to
K.S.A. 79-3650(b), and amendments
thereto.
(2) A written agreement
may be entered into by the secretary and the taxpayer to extend the period
within which the taxpayer may file a refund application, and an assessment may
be made by the secretary. If such a mutual agreement is entered into, any
additional interest due on an assessment that is in excess of 48 months shall
be wavied. This agreement shall be entered into before the expiration of the
three-year statute of limitations.
(3) The provisions of
K.S.A. 60-206, and amendments thereto, for the
computation of time shall apply to determine the timeliness of the filing of a
refund claim. Each refund claim shall be presumed to have been filed with the
department on its postmark date.
(4) A person against whom an assessment or
administrative decision has become final shall not be entitled to pay the
amount of the assessment and then file a refund claim for the amount paid.
(b) Incomplete refund
applications.
(1) A refund application that
is incomplete, not supported by the required documentation, or otherwise fails
to meet the requirements specified in K.A.R. 92-19-49c, whether submitted to
the department or to a retailer, shall not be considered to be a refund claim
or refund request for the purpose of any of the following:
(A) Tolling the statute of limitations
provisions of
K.S.A. 79-3609, and amendments thereto;
(B) commencing the running of the 60-day
provision of
K.S.A. 79-3609(d), and amendments
thereto, for payment of refunds without interest; or
(C) extending the time for filing the refund
application or refund request beyond the three-year statute of limitations
under the provisions of
K.S.A. 79-3650(b), and amendments
thereto.
(2)
(A) If a refund application is incomplete,
not supported by the required documentation, or otherwise fails to meet the
requirements specified in K.A.R. 92-19-49c, the substance or merits of the
incomplete refund application shall not be reviewed by the department, and the
incomplete application shall be returned to the applicant. At that time, the
applicant shall be notified in writing of the actions, corrections,
information, or additional documentation that is needed to complete a new
refund application. The applicant also shall be provided with a written
description of the method by which an informal conference may be requested
pursuant to
K.S.A. 79-3226, and amendments thereto, to request a
review of the determination that the refund application is in-complete.
(B) Each review of the
department's determination that the taxpayer submitted a refund application
that was incomplete, not supported by the required documentation, or otherwise
failed to meet the requirements specified in K.A.R. 92-19-49c shall be limited
to determining whether the refund application, as originally submitted,
complied with the requirements of K.A.R. 92-19-49c by providing sufficient
information and documentation to allow the refund application to be verified
and processed. If, upon review at the informal conference, it is determined
that the refund application failed to meet the requirements specified in K.A.R.
92-19-49c when submitted so that the refund application could not be verified
and processed, the applicant shall be required to file a new refund application
for the refund being claimed.
(c) Review of refund claims.
(1) Each refund application that meets the
requirements specified in K.A.R. 92-19-49c so that it can be verified and
processed shall be reviewed by the department as a refund claim and its
validity determined. Each claimant shall be notified in writing of the
department's determination and, if the refund claim is denied in whole or in
part, shall be provided with a written description of the method by which an
informal conference pursuant to
K.S.A. 79-3226, and amendments thereto, may be
requested. Each denial of a refund claim by the department shall be final,
unless the claimant timely requests an informal conference pursuant to
K.S.A. 79-3226, and amendments thereto.
(2) Once an informal conference is requested,
an informal conference shall be held by the secretary or designee, and a
written final determination shall be issued by the secretary or designee, in
accordance with
K.S.A. 79-3226, and amendments thereto. The written
final determination shall constitute a final agency action subject to
administrative review by the Kansas board of tax appeals, as provided in
K.S.A. 74-2438 and amendments thereto.
(d) Offsetting overpayments
against deficien-cies.
(1) If the department
determines that a refund is due, the refund may first be set off against any
outstanding tax liability for a tax that is administered by the department and
owed by the person to whom the refund is ultimately due. Any refund amount that
remains may be set off against any other outstanding state liabilities or shall
be refunded. A retailer shall be considered to be the person to whom the refund
is ultimately due under this subsection if the retailer previously credited or
refunded the tax to the consumer. This person shall be provided with written
notice of the setoff and informed of the right to seek administrative review of
the setoff pursuant to
K.S.A. 79-3226, and amendments thereto.
(2) If the department determines, upon review
of a tax return, that there has been an overpayment of tax for the taxable
period to which the return relates, either of the following actions may be
taken by the department:
(A) Crediting the
overpayment amount to the taxpayer without requiring the taxpayer to file a
refund claim; or
(B) setting off
the overpayment in accordance with subsection (c).
(e) Audits.
(1) If an audit by the department discovers
that both underpayments and overpayments of a tax have been made in different
reporting periods, the tax overpayments shall be credited against the tax
underpayments if the taxpayer submits an affidavit that meets the requirements
of paragraph (e)(2).
(2) To be
entitled to the provision specified in paragraph (e)(1), the taxpayer shall
provide the department with an affidavit signed by the taxpayer's owner,
partner, or corporate officer that attests that the taxpayer has not claimed a
duplicate refund or taken a credit on a return and will not claim a duplicate
refund or credit for those taxes in the future. A retailer shall not be allowed
to utilize the provisions of this subsection or any other setoff provisions for
taxes that the taxpayer collected from its customers and has not credited or
refunded to the customer.
(3) Once
an audit engagement letter is issued by the department to a taxpayer, the
taxpayer shall submit all refund claims for any tax overpayment that is alleged
to have occurred during the audit period to the department to be considered as
part of the audit review.
(f) Audits based on sampling.
(1) After a business pays a liability or
accepts a refund that was determined under an audit assessment that applied a
sampling technique to an established population, the population that served as
the base for the sampling portion of the assessment shall be closed to all
additional assessments and refunds.
(2) Refund applications based on sampling
techniques shall not be allowed.
(g) Erroneous refunds. If the department
erroneously refunds or credits any sales or compensating tax to a retailer or
consumer, a notice of tax assessment for the erroneous refund or credit may be
issued by the department in either of the following periods:
(1) Within three years from the date the
refund was made; or
(2) if it
appears that any part of the refund was induced by fraud or the
misrepresentation of a material fact, within two years from the date of
discovery of the fraud or misrepresentation.
The amount of the assessment shall be limited to the amount of the erroneous refund including interest, unless fraud is involved.
Notes
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