Exception to the General Statute of Limitations for Certain Events

Effective January 1, 2014, N.C. Gen. Stat. § 105-241.6(b)(5) provides an exception to the general statute of limitations for obtaining a refund of an overpayment due to a contingent event or an event or condition other than a contingent event. The statute addresses specific situations when the general statute of limitations in N.C. Gen. Stat. § 105-241.6(a) may not apply.

A contingent event is litigation or a state tax audit initiated prior to the expiration of the statute of limitations which prevents a taxpayer from possessing the information necessary to file an accurate and definite request for refund of an overpayment. An event or condition other than a contingent event is an event or condition other than litigation or a state tax audit that has occurred that prevents the taxpayer from filing an accurate and definite request for refund of an overpayment within the general statute of limitations.

Contingent Event

  • A taxpayer who is subject to a contingent event must file written notice with the Secretary of Revenue prior to the expiration of the statute of limitations.
  • The notice filed with the Secretary of Revenue must identify and describe the contingent event, identify the type of tax affected by the contingent event, list the return or payment affected by the contingent event, and state in clear terms the basis used to determine the estimated amount of the overpayment.
  • Complete Parts 1 and 2 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations, to file the notice with the Secretary of Revenue. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14 or a letter sent in lieu of Form NC-14 will not be accepted if it does not include all of the required information or is not filed prior to the expiration of the statute of limitations.
  • The Department will notify you in writing that either (1) the contingent event notice has been received with all required information or (2) the contingent event notice has been received without all required information.
  • A request for a refund of an overpayment must be filed within six months after the contingent event concludes. Include a copy of the Department’s acknowledgment of an accepted notice.

Event or Condition Other Than a Contingent Event

  • A taxpayer who contends that an event or condition other than litigation or a state tax audit has occurred that prevents the taxpayer from filing an accurate and definite request for a refund of an overpayment within the general statute of limitations may submit a written request to the Secretary of Revenue seeking an extension of the statute of limitations in which to file a request for a refund of an overpayment.
  • The written request seeking an extension of the statute of limitations must be filed prior to the expiration of the statute of limitations.
  • The request must establish by clear, convincing proof that the event or condition is beyond the taxpayer’s control and that it prevents the taxpayer’s timely filing of an accurate and definite request for refund of an overpayment.
  • Complete Parts 1 and 3 of Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations, to request an extension of the statute of limitations. In lieu of completing Form NC-14, you may mail a letter containing all of the required information identified on Form NC-14. Form NC-14 or a letter sent in lieu of Form NC-14 will not be accepted as a request for an extension if it does not include all required information or is not filed prior to the expiration of the statute of limitations.
  • The Department will respond in writing as to whether the request for an extension of the statute of limitations is granted or declined by the Secretary of Revenue.
  • The Secretary of Revenue’s decision to grant or decline the request is final and is not subject to administrative or judicial review.
  • If the extension of the statute of limitations is granted, the request for a refund of an overpayment must be filed within six months after the event or condition concludes. Include a copy of the Department’s grant of the request for an extension of the statute of limitations with the request for a refund of an overpayment.

Where to Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations

Mail Form NC-14, Notice of Contingent Event or Request to Extend Statute of Limitations or a letter in lieu of Form NC-14, to P.O. Box 871, Raleigh, North Carolina 27602-0871. Address the envelope to the attention of the taxing division for the tax to which the event or condition applies. For example:

Income Tax Division – Corporate Tax Section
Income Tax Division – Personal Taxes Section
Sales and Use Tax Division
Excise Tax Division

Protective Refund Claims Filed With the Department Prior to January 1, 2014

  • The Department of Revenue’s administrative policy regarding protective refund claims is repealed effective January 1, 2014.
  • A protective refund claim filed prior to January 1, 2014 under the Department’s former administrative policy based on a contingent event as defined in N.C. Gen. Stat. § 105-241.6(b)(5) does not have to be refiled using Form NC-14.
  • If the contingent event on which the protective refund claim was based concluded prior to January 1, 2014, you must file a true and accurate (perfected) request for refund of an overpayment by June 30, 2014. Include a copy of the previously-filed protective refund claim with the request for a refund of an overpayment.
  • If the contingent event on which the protective refund claim was based had not concluded prior to January 1, 2014, you must file a request for a refund of an overpayment within six months after the contingent event concludes. Include a copy of the previously-filed protective refund claim with the request for a refund of an overpayment.
  • If you filed a protective refund claim prior to January 1, 2014 under the Department’s former administrative policy based on an event or condition other than a contingent event as defined in N.C. Gen. Stat. § 105-241.6(b)(5), you must file a true and accurate (perfected) request for a refund of an overpayment with the Secretary by June 30, 2014 unless the general statute of limitations for the tax period impacted by the event or condition has not expired. In that case, you may file Form NC-14 as described in the Event or Condition Other Than a Contingent Event section above to request an extension of the statute of limitations. Include a copy of the previously-filed protective refund claim with the request for a refund of an overpayment.
  • A perfected request for a refund of an overpayment filed with the Secretary after June 30, 2014 for a protective refund claim filed prior to January 1, 2014 under the Department’s former administrative policy based on an event or condition other than a contingent event will not be considered as timely unless the general statute of limitations for the tax period impacted by the event or condition has not expired. An untimely request for a refund of an overpayment is not subject to administrative or judicial review.