32 V.S.A. § 5882 — Time limitation on notices of deficiency and assessment of penalty and interest

(a) The Commissioner may notify a taxpayer of a deficiency with respect to the payment
of any tax liability, or assess a penalty or interest with respect thereto, in accordance
with section 3202 of this title, at any time within three years after the date that tax liability was originally
required to be paid under this chapter.
(b) Notwithstanding subsection (a) of this section:
(1) If the taxpayer fails to file a proper return with respect to any tax liability at
the time prescribed for its filing, the notification or assessment may be made at
any time before the end of three years after the taxpayer files such a return.
(2) If the deficiency is caused by reason of fraud or the willful intent of the taxpayer
to defeat or evade this chapter, the notification or assessment may be made at any
time.
(3) If the notice of deficiency or assessment is founded upon an assertion or determination
by the United States that the taxable income, or income tax liability, of the taxpayer
under the laws of the United States is greater than the amount of the taxable income
or income tax liability reported on any return of the taxpayer filed under the laws
of the United States, the notification or assessment under section 3203 of this title may be made within the time prescribed under subsection (a) of this section, or at
any time before the expiration of six months after the date the Commissioner is notified,
in writing, by the taxpayer or by the United States of the federal assertion or determination,
whichever period is the later to expire.
(4) If the taxpayer and Commissioner agree, the notification or assessment may be made
at any time before the date so agreed upon.
(5) If a person withholds tax under subchapter 4 of this chapter but underreports the
tax withheld by 20 percent or more, the notification or assessment may be made at
any time before the expiration of six years from the date of the filing of such return.
(6) If the notice or deficiency is based upon a refund that was paid in error, the notification
or assessment under section 3203 of this title may be made within the time prescribed under subsection (a) of this section or at
any time before the expiration of one year after the date the refund was paid, whichever
period is the later to expire. (