1126                           LAWS OF MARYLAND                      [CH. 519

CHAPTER 519
(Senate Bill 485)

AN ACT to repeal and re-enact, with amendments, Section 309 of
Article 81 of the Annotated Code of Maryland (1965 Replacement
Volume), title "Revenue and Taxes", subtitle "Income Tax", to
revise the present provisions relative to the duty of a taxpayer to
report an audit of the taxpayer's federal income tax return and
generally clarifying and simplifying the provisions of said section.

Section 1. Be it enacted by the General Assembly of Maryland,
That Section 309 of Article 81 of the Annotated Code of Maryland
(1965 Replacement Volume), title "Revenue and Taxes", subtitle
"Income Tax", be and it is hereby repealed and re-enacted, with
amendments, to read as follows:

309.

(a) As soon as practicable after each return is received, the
Comptroller shall examine and audit such returns as he deems
necessary for the enforcement of this subtitle. If the amount of
tax computed by the Comptroller shall be greater than the amount
returned by the taxpayer, the excess shall be assessed by the Comp-
troller {[(within three years from the date the return was originally
due or filed, except in the case of failure to file a return or of a
fraudulent or incomplete return in which case the excess may be
assessed at any time), and a notice of such assessment shall be
mailed to the taxpayer. However, where any additional tax is due
as the result of an audit of the taxpayer's federal return by the
internal revenue service, made at any time within three years
from the due date of the audited federal return, any such additional
tax due by the taxpayer under the provisions of this subtitle may
be assessed at any time within one year from the date the taxpayer
makes known to the Comptroller the existence of said audit and
furnishes a copy thereof to the said Comptroller. In the event
of failure by the taxpayer to notify the Comptroller of the existence
of the federal audit and to furnish a copy thereof to the Comptroller
within thirty days after knowledge thereof any additional tax
attributable to said audit of the taxpayer's federal return made
within three years from the due date of said return by the internal
revenue service may be assessed under this subtitle at any time.]
subject to the applicable time provisions hereinafter set forth.

(f) (B) Except as otherwise provided in this section, the amount
of any tax imposed by this subtitle shall be assessed within 3 years
after the return was filed or within 3 years after the due date for
such return, whichever date is later.

(c) The period of limitations set forth in subsection (a) (B)
above shall not apply in the following situations:

(1)    In the case of a false or fraudulent return with the intent
to evade tax or in the case of a willful attempt in any manner to
defeat or evade tax, the tax may be assessed at any time.

(2)    In the case of a failure to file a return or in the case of the
filing of an incomplete return, the tax may be assessed at any time.