(b) Each taxpayer shall notify the department of any modification as provided in subsection (c) of:

1. (1) a federal income tax return filed by the taxpayer after January 1, 1978; or

2. (2) the taxpayer's federal income tax liability for a taxable year which begins after December 31, 1977.

   The taxpayer shall file the notice in the form and manner prescribed by the department within one hundred twenty (120) days after the modification is made if the modification was made before January 1, 2011, one hundred eighty (180) days after the modification is made if the modification is made after December 31, 2010, but before January 1, 2026, and one (1) year after the modification is made if the modification is made after December 31, 2025.

(c) For purposes of subsection (b), a modification occurs on the date on which a:

1. (1) taxpayer files an amended federal income tax return;
2. (2) final determination is made concerning an assessment of deficiency;
3. (3) final determination is made concerning a claim for a refund;

4. (4) taxpayer waives the restrictions on assessment and collection of all, or any part, of an underpayment of federal income tax by signing a federal Form 870, or any other Form prescribed by the Internal Revenue Service for that purpose. For purposes of this subdivision:

   1. (A) a final determination does not occur with respect to any part of the underpayment that is not covered by the waiver; and
   2. (B) if the signature of an authorized representative of the Internal Revenue Service is required to execute a waiver, the date of the final determination is the date of signing by the authorized representative of the Internal Revenue Service or by the taxpayer, whichever is later;
5. (5) taxpayer enters into a closing agreement with the Internal Revenue Service concerning the taxpayer's tax liability under Section 7121 of the Internal Revenue Code that is a final determination. The date the taxpayer enters into a closing agreement under this subdivision is the date the closing agreement is signed by an authorized representative of the Internal Revenue Service or by the taxpayer, whichever is later; or

6. (6) modification or alteration in an amount of tax, adjusted gross income, taxable income, credit, or other tax attribute is otherwise made that is a final determination;

   for a taxable year, regardless of whether a modification results in an underpayment or overpayment of tax. In the case of a taxpayer that files a consolidated return under section 14 of this chapter or either files or is required to be included by the department in a combined return under IC 6-3-2-2 , the date on which the alteration or modification is made shall be considered to be the last day on which an alteration or modification occurs for any entity filing as part of the consolidated or combined return.

(d) For purposes of subsection (c)(2) through (c)(6), a final determination means an action or decision by a taxpayer, the Internal Revenue Service (including the Appeals Division), the United States Tax Court, or any other United States federal court concerning any disputed tax issue that:

1. (1) is final and conclusive; and
2. (2) cannot be reopened or appealed by a taxpayer or the Internal Revenue Service as a matter of law.

(e) If the federal modification results in a change in the taxpayer's federal or Indiana adjusted gross income, the taxpayer shall file an Indiana amended return within one hundred twenty (120) days after the modification is made if the modification was made before January 1, 2011, one hundred eighty (180) days after the modification is made if the modification is made after December 31, 2010, but before January 1, 2026, and one (1) year after the modification is made if the modification is made after December 31, 2025.

Formerly: Acts 1963(ss), c.32, s.406; Acts 1965, c.233, s.19. As amended by Acts 1977(ss), P.L.4, SEC.11; P.L.119-1998, SEC.5; P.L.254-2003, SEC.6; P.L.172-2011, SEC.59; P.L.242-2015, SEC.16; P.L.159-2021, SEC.13; P.L.128-2026, SEC.19.