Chapter 5

§ 501 Application of this chapter. For tax periods beginning on or after January 1, 1992, except where in conflict with a specific provision within another chapter of this title or, where applicable, a specific provision of Title 4 or Title 16 or a rule of the Delaware Alcoholic Beverage Control Commission or the Marijuana Commissioner, this chapter shall govern the administration, procedures and enforcement of the State revenue laws provided for under Parts II, III, IV (except Chapters 51 and 52), V, and VI of this title; subchapter VII of Chapter 5 and subchapter VII of Chapter 13 of Title 4; and Chapter 101 of Title 16. 68 Del. Laws, c. 187, §  1 ; 71 Del. Laws, c. 385, §  3 ; 74 Del. Laws, c. 137, §  5 ; 79 Del. Laws, c. 142, §  1 ; 84 Del. Laws, c. 24, § 10 ; § 502 Definitions. (a) Meaning of terms, in general. — Any term used in this chapter shall have the same meaning as when used in a comparable context in the internal revenue laws of the United States, unless a different meaning is clearly required or unless subsection (b) of this section ascribes a different meaning to such term. Any reference in this chapter to the internal revenue laws of the United States shall mean the Internal Revenue Code of 1986 (26 U.S.C. § 1 et seq.) and amendments thereto and other laws of the United States relating to federal taxes, as the same are or may become effective for the taxable year. (b) Specific definitions. — Whenever used in this title, the following terms shall have the meanings ascribed to them in this subsection: (1) “Applicable thresholds” means any dollar figure listed within this title that is used to determine notification requirements, filing frequencies, tax or tax credit calculations that shall be subject to annual adjustment through the application of the threshold adjustment factor, including, without limitation, those specifically set forth in § 515(c)(1) of this title. (2) “Deficiency” means, in the case of any tax imposed by this title or, where applicable, Title 4, the amount by which such tax so imposed exceeds the excess of: a. The sum of the amount shown as the tax by the taxpayer upon the return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus the amounts previously assessed (or collected without assessment) as a deficiency, over b. The amount of any abatements, credits or refunds made. (3) “Director” means the Director of the Division of Revenue or the Secretary of Finance of the State. (4) “Division of Revenue” means the Division of Revenue of the Department of Finance of the State. (5) “Internal Revenue Service” means the Internal Revenue Service of the Department of Treasury of the United States. (6) a. “Last known address,” except as provided in paragraph (b)(6)b. of this section, shall mean: 1. The address for the receipt of mail last made known by the taxpayer to the Division of Revenue on a tax return or written notice; or 2. A mailing address with respect to such taxpayer provided by a service provider to the Division of Revenue. Whichever address shall have been provided later to the Division of Revenue. b. Notwithstanding the provisions of paragraph (b)(6)a. of this section, “last known address” shall mean the address determined under paragraph (b)(6)a.1. of this section whenever the taxpayer shows that the address determined under paragraph (b)(6)a.1. of this section is the taxpayer’s actual address and that the address determined under paragraph (b)(6)a.2. of this section is not the taxpayer’s actual address, or that mail sent to the address determined under paragraph (b)(6)a.1. of this section is more likely to reach the taxpayer than mail sent to the address under paragraph (b)(6)a.2. of this section. (7) “Notice of proposed assessment” means a notice sent to a taxpayer by the Director or the Director’s delegate pursuant to § 521(c) of this title that tax, interest, penalty, additional amount or addition to the tax is proposed for assessment and is due. (8) “Paid tax preparer” means any person who prepares for compensation, or who employs one or more persons to prepare for compensation, any return or claim for refund, or a substantial portion of any return or claim for refund under this Title. “Paid tax preparer” does not include anyone regulated under Chapter 1 of Title 24. (9) “Person” means and includes an individual, a trust, estate, partnership, association, company or corporation. (10) “State” means a state of the United States, the District of Columbia, Puerto Rico, The United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. (11) “State Tax Commissioner” means the Director of the Division of Revenue. (12) “State Tax Department” means the Division of Revenue. (13) “Tax” shall be deemed also to refer to license fees imposed under Part III of this title. (14) “This title,” except when used in reference to specific chapters, sections or other provisions of Title 30, shall mean Title 30 of the Delaware Code, except § 3003 and Chapters 51 and 52. (15) “Threshold adjustment factor” means an amount equal to the Consumer Price Index prepared by the Bureau of Labor Statistics, U.S. Department of Labor for urban consumers, U.S. city average, all items, for the month of June during the year in which an applicable threshold is adjusted, divided by the equivalent Consumer Price Index figure for June 2016. (16) “Title 4,” for purposes of this chapter, shall be deemed to refer only to subchapter VII of Chapter 5 of Title 4. (17) “Trust fund tax” , for purposes of this chapter, means a tax where a third party collects and remits to this State the tax levied on another entity with a statutory liability to this State and includes all of the following: a. 988 surcharge under § 10222A of Title 16. b. E911 surcharge under §§ 10103 and 10111 of Title 16. c. Hazardous Substance Cleanup Act (HSCA) [§ 9101 et seq. of Title 7] tax under § 9114 of Title 7. d. Lessee tax under § 4302 of this title. e. Lodging tax (public accommodation tax) under § 6102 of this title. f. Marijuana tax under § 1382 of Title 4. g. Public utility tax under § 5502 of this title. h. Scrap tire fee under § 2910 of this title. i. Short-term rental lodging tax under § 6202 of this title. j. Withholding tax under § 1151 of this title. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 71 Del. Laws, c. 314, §  6 ; 80 Del. Laws, c. 195, § 1 ; 81 Del. Laws, c. 386, § 1 ; 85 Del. Laws, c. 301, § 2 ; Delaware General Assembly Judicial Executive Contact Twitter Help function submitSearch() { if (!window.location.origin) { window.location.origin = window.location.protocol + "//" + window.location.hostname + (window.location.port ? ':' + window.location.port : ''); } keyword = document.getElementById('srch-term').value; window.location.href = "/Search?query=" + keyword; } document.getElementById('srch-term').onkeyup = function (e) { if (e.keyCode == 13) { submitSearch(); } } § 510 Due date of the return. A return prepared in compliance with the provisions of any chapter of this title or, where applicable, Title 4 shall be due on the last day provided for under such provision, or upon such later date as the Director may permit pursuant to any extension of the time to file the return granted in accordance with this chapter. 68 Del. Laws, c. 187, §  1 ; § 511 Extension of time for filing and payment. (a) The Director may grant a reasonable extension of time for the payment of any tax or estimated tax imposed by this title or by Title 4, or any installment thereof, or for filing any return, declaration, statement or other document required, on such terms and conditions as the Director may require. (b) If any extension of time is granted for the payment of any amount of tax, the Director may require the taxpayer to furnish a bond, or other security, in an amount not exceeding twice the amount of the tax for which the extension of time for payment is granted, on such terms and conditions as the Director may require. (c) In the case of any return required under Chapter 15 of this title [repealed], if a federal extension of time for the filing of a return is granted for federal estate tax purposes, then the time for filing such return required under Chapter 15 of this title [repealed] shall be automatically extended for a like period; provided, that a copy of the federal extension is furnished to the Director before or with the filing of such return. (d) This section shall not preclude or be administered so as to be in conflict with deferred payments under § 5316(b) of this title. 68 Del. Laws, c. 187, §  1 ; 71 Del. Laws, c. 353, §  14 ; 71 Del. Laws, c. 385, §  4 ; § 512 Signing of returns and other documents. (a) Any return, declaration, statement or other document required to be made pursuant to this title or Title 4 shall be signed in accordance with rules or instructions prescribed by the Director. The fact that an individual’s name is signed to a return, declaration, statement or other document shall be prima facie evidence for all purposes that such return, declaration, statement or other document was actually signed by such individual and that the individual signed the return with authority to do so on behalf of the taxpayer. (b) The making or filing of any return, declaration, statement or other document, or copy thereof, required to be made or filed pursuant to this title or Title 4, including a copy of a federal return, shall constitute a certification by the person making or filing such return, declaration, statement or other document, or copy thereof, that the statements contained therein are true and that any copy filed is a true copy. (c) The Director may require that any return or other writing required to be filed with respect to any tax imposed under authority of this title or Title 4 be signed by the maker of such return or writing under oath or affirmation, subject to the penalties of perjury. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; § 513 General requirements concerning returns; records and statements. (a) The Director may prescribe rules or regulations with respect to the keeping of records, and may prescribe the content and form of returns and statements and the filing of copies of federal returns and determinations. The Director may require any person, by regulation or notice served on such person, to make such returns, render such statements or keep such records as the Director may deem sufficient to show whether or not such person is liable under this title or Title 4 for the payment of any tax or for the collection of any tax. The Director may permit or require the filing of returns by electronic means or by magnetic media and, in either case, may specify the form and content of such filing. (b) Notwithstanding any other provision of law, any return, declaration, statement or other document submitted by means of a digital or electronic form stating that the submission is subject to the penalties of perjury shall be treated for all purposes (both civil and criminal, including penalties for perjury) in the same manner as though signed or subscribed. 68 Del. Laws, c. 187, §  1 ; 68 Del. Laws, c. 344, §  1 ; 73 Del. Laws, c. 131, §  1 ; 81 Del. Laws, c. 103, § 3 ; § 514 Report of change in federal tax liability. If the amount of the taxpayer’s federal income or estate tax liability reported on the federal tax return for any taxable period is changed or corrected by the Internal Revenue Service, or other competent authority, the taxpayer shall report to the Director such change or correction in federal tax liability within 90 days after the final determination of such change or correction and shall concede the accuracy of such determination, or state wherein it is erroneous. Any taxpayer filing an amended federal income, estate or gift tax return shall also file, within 90 days thereafter, the appropriate amended tax return under this title and shall provide to the Director such additional information as the Director may require. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 71 Del. Laws, c. 385, §  5 ; § 515 Filing frequency and tax computation thresholds. (a) Annual adjustment. — Each year, the Department of Finance shall calculate the threshold adjustment factor no later than October 25 of that year and shall present the adjustment to the Delaware Economic and Financial Advisory Council at its October meeting. (b) Calculation. — (1) The applicable thresholds for notification requirements, filing frequencies, tax and tax credit calculations shall be recomputed after the annual adjustment described in subsection (a) of this section by multiplying each applicable threshold by the threshold adjustment factor calculated as set forth in § 502(b)(15) of this title. (2) For any applicable threshold less than $1,000,000, the resulting product of the calculation in paragraph (b)(1) of this section shall be rounded to the nearest $10. For any applicable threshold of $1,000,000 or more, the resulting product of the calculation in paragraph (b)(1) of this section shall be rounded to the nearest $1,000. (c) Applicability. — (1) The applicable thresholds subject to annual adjustment shall include: a. The figure “$1,000” as it appears in § 521(c) of this title; b. The figure “$1,000” as it appears in § 552(b) of this title; c. The figures “$4,500” and “$25,000” wherever they appear in § 1154(a) of this title; d. The figure “$20,000,000” as it appears in § 1905(5) of this title; e. The figure “$20,000,000” as it appears in § 2070(a)(2) of this title; f. The figure “$112,200” as it appears in § 2081(21) of this title; g. The figure “$1,500,000” as it appears in § 2301(d)(2) of this title; h. The figure “$1,500,000” as it appears in § 2502(c)(2) of this title; i. The figure “$1,500,000” as it appears in § 2702(b)(3) of this title; j. The figure “$1,500,000” as it appears in § 2703(c)(2) of this title; k. The figure “$1,500,000” as it appears in § 2902(c)(2) of this title; l . The figure “$1,500,000” as it appears in § 2903(c)(2) of this title; m. The figure “$3,000,000” as it appears in § 2904(c)(2) of this title; n. The figure “$1,500,000” as it appears in § 2905(b)(2) of this title; o. The figure “$1,500,000” as it appears in § 2906(c)(2) of this title; p. The figure “$3,000,000” as it appears in § 2907(c)(2) of this title; and q. The figure “$1,500,000” as it appears in § 2908(c)(2) of this title. (2) The annual adjustment of the applicable thresholds for notification requirements, filing frequencies, tax and tax credit calculations occurring each October as required under subsection (a) of this section is effective for determining the applicable thresholds for notification requirements, filing frequencies, tax and tax credit calculations for tax periods beginning after December 31 of the year in which the applicable thresholds were adjusted. (d) Publication. — No later than November 15 each year, the Department of Finance shall publish the annual adjustments to all applicable thresholds on the Division of Revenue Internet Website and engage in public outreach notifying businesses, employers, payroll processors, tax professionals, and the general public of the adjustments. 80 Del. Laws, c. 195, § 2 ; 80 Del. Laws, c. 207, § 1 ; 81 Del. Laws, c. 386, § 1 ; 82 Del. Laws, c. 101, § 4 ; 82 Del. Laws, c. 226, § 7 ; Delaware General Assembly Judicial Executive Contact Twitter Help function submitSearch() { if (!window.location.origin) { window.location.origin = window.location.protocol + "//" + window.location.hostname + (window.location.port ? ':' + window.location.port : ''); } keyword = document.getElementById('srch-term').value; window.location.href = "/Search?query=" + keyword; } document.getElementById('srch-term').onkeyup = function (e) { if (e.keyCode == 13) { submitSearch(); } } § 521 Examination of return. (a) Deficiency or overpayment. — As soon as practicable after any return is filed, the Director shall examine it to determine the correct amount of tax. If the Director finds that the amount of tax shown on the return is less than the correct amount, the Director shall notify the taxpayer in writing of the amount of the deficiency proposed to be assessed. If the Director finds that the tax that has been paid by the taxpayer is more than the correct amount, the Director shall credit the overpayment against any taxes to which this chapter applies and which are due to this State by the taxpayer and shall refund the difference to the taxpayer. (b) No return filed. — If the taxpayer fails to file any return of tax required to be filed, the Director shall estimate from any available information the taxpayer’s taxable amount, and the tax thereon, and shall notify the taxpayer in writing of the amount proposed to be assessed against the taxpayer as a deficiency. (c) Notice of proposed assessment. — A notice of proposed assessment shall: (1) Be in writing, (2) State that tax, interest, penalty, additional amount, or addition to tax is proposed for assessment and is due, and (3) Set forth the amount and the reason for the proposed assessment. Such notice shall be sent by mail to the taxpayer at the taxpayer’s last known address within the time limit provided by § 531 of this title. If the amount of the proposed assessment exceeds the applicable threshold of $1,000, such notice shall be sent by certified or registered mail. (The applicable threshold in this paragraph (c)(3) is subject to annual adjustment as more fully set forth in § 515 of this title.) In the case of a joint return of personal income tax, a notice of proposed assessment shall be a single joint notice, except that if the Director is notified by either spouse in writing that separate addresses have been established, the Director shall mail a joint notice to each spouse at each such address. In the case of a combined separate return of personal income tax, a single notice of proposed assessment shall be sent by the Director to the taxpayers’ last known address except that, if the Director is notified by either spouse in writing that separate addresses have been established, the Director shall mail separate notices to each spouse, using reasonable means to allocate the proposed assessment between the spouses. If the taxpayer is deceased, under a legal disability or is a corporation which has terminated its existence, a notice of proposed assessment shall be mailed to such taxpayer’s last known address, except that if the Director has received notice of the existence of a fiduciary relationship with respect to such taxpayer, such notice shall be mailed to the last known address of such fiduciary. Except where the Director determines that collection would be jeopardized by delay, no notice of proposed assessment of any tax shall be mailed prior to the last date, including any date fixed by extension, prescribed for the payment of such tax. (d) Supplemental notice of proposed assessment. — The Director may, at any time within the period prescribed for issuance of a notice of proposed assessment, issue a supplemental notice of proposed assessment, subject to the other provisions of this section, whenever it is found that any notice is imperfect or incomplete in any material respect. Any reference in this title to a notice of proposed assessment shall be deemed to include a reference to a supplemental notice of proposed assessment issued under the authority of this subsection. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 80 Del. Laws, c. 195, § 3 ; § 522 Assessment final if no protest. Sixty days after the date on which it was mailed (30 days in the case of a proposed assessment of trust fund taxes, or, in the case of other taxes imposed by Chapter 11 of this title, 120 days if the taxpayer is outside the United States), a notice of proposed assessment under § 521(c) of this title shall constitute a final assessment of the amount of tax, interest, penalties, additional amounts and additions to the tax specified in such notice, excepting only those amounts as to which the taxpayer has filed a timely protest with the Director under § 523 of this title. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 84 Del. Laws, c. 301, § 16 ; 85 Del. Laws, c. 301, § 3 ; § 523 Protest by taxpayer. Within 60 days (30 days in the case of trust fund taxes, or, in the case of other taxes imposed by Chapter 11 of this title, 120 days if the taxpayer is outside the United States) after the date of the mailing of a notice of proposed assessment under § 521(c) of this title or the date of the mailing of a notice of the disallowance of a claim for credit or refund under § 542 of this title, the taxpayer may file with the Director a written protest against the proposed assessment or disallowance in which the taxpayer shall set forth the grounds upon which the protest is based. If such a protest is filed, the Director shall reconsider the proposed assessment or disallowance of claim for credit or refund and, if the taxpayer has so requested, shall grant the taxpayer or the taxpayer’s authorized representative an oral hearing. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 84 Del. Laws, c. 301, § 16 ; 85 Del. Laws, c. 301, § 3 ; § 524 Notice of determination after protest. Written notice of the Director’s determination under § 523 of this title shall be mailed to the taxpayer by certified or registered mail, and such notice shall set forth the Director’s findings of fact and the basis of any determination which is adverse, in whole or in part, to the taxpayer. 68 Del. Laws, c. 187, §  1 ; § 525 Determination of Director final. The determination of the Director under § 524 of this title on the taxpayer’s protest shall be final (and such determination shall constitute a final assessment of any amount determined by the Director to be due) upon the expiration of 60 days (30 days in the case of trust fund taxes, or, in the case of other taxes imposed by Chapter 11 of this title, 120 days if the taxpayer is outside the United States) from the date when the Director mails notice of the determination to the taxpayer, unless within such period the taxpayer seeks review of the Director’s determination pursuant to § 544 of this title. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 84 Del. Laws, c. 301, § 16 ; 85 Del. Laws, c. 301, § 3 ; § 526 Burden of proof. (a) In any proceeding before the Director under this chapter, the burden of proof shall be on the taxpayer, except with respect to the following issues, as to which the burden of proof shall be on the Director: (1) Whether the taxpayer has been guilty of fraud; (2) Whether the petitioner is liable as the transferee (within the meaning of § 560 of this title) of property of a taxpayer (but not to show that the taxpayer was liable for the tax); and (3) Whether the taxpayer is liable for any increase in a deficiency where such increase is asserted initially after the notice of proposed assessment under § 521(c) of this title was mailed and a protest under § 523 of this title was filed, unless such increase in deficiency is the result of a change or correction of federal tax liability required to be reported under § 514 of this title and of which change or correction the Director had no notice at the time the Director mailed the notice of proposed assessment. (b) In any proceeding before the Tax Appeal Board under this chapter, the burden of proof shall be upon the taxpayer, except with respect to the issues described in paragraphs (a)(1) and (2) of this section, as to which the burden of proof shall be on the Director. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; § 527 Evidence of related federal determination. A federal administrative determination of issues raised in a proceeding under § 523 or § 544 of this title shall be admissible as presumptive evidence in such proceeding, but such determination shall not be conclusive. 68 Del. Laws, c. 187, §  1 ; § 528 Mathematical error. (a) If the amount of tax shown on the taxpayer’s return is understated due to a mathematical or clerical error, the Director shall notify the taxpayer in writing that an amount of tax in excess of that shown on the return is due and has been assessed. Each notice under this subsection shall expressly state the error alleged. Such additional tax and any interest thereon shall, subject to the right of protest under subsection (b) of this section, be deemed assessed on the date of filing or the due date of the return, whichever is later. (b) Notwithstanding the provision for immediate assessment under subsection (a) of this section, a taxpayer may file with the Director, within 60 days after notice of the assessment is sent, a written protest of the assessment under the provisions of § 523 of this title. In the taxpayer’s protest, the taxpayer shall set forth the reasons the taxpayer believes there was no mathematical or clerical error made in the preparation of the return or calculation of the tax due. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; § 529 Time for performing certain acts postponed by reason of service in combat zone. (a) In the case of an individual serving in the armed forces of the United States, or serving in support of such armed forces, in an area designated by the President of the United States by Executive Order as a “combat zone” for purposes of § 112 of the Internal Revenue Code (26 U.S.C. § 112), at any time during the period designated by the President by Executive Order as the period of combatant activities in such zone for purposes of such section, or hospitalized as a result of injury received while serving in such an area during such time, the period of service in such area, plus the period of continuous qualified hospitalization attributable to such injury, and the next 195 days thereafter, shall be disregarded in determining under this title (other than Chapters 30, 51 and 52), in respect of any tax liability (including any interest, penalty, additional amount, or addition to the tax) of such individual: (1) Whether any of the following acts was performed within the time prescribed therefor: a. Filing any return of income or estate (except income tax withheld at source); b. Payment of any income or estate (except income tax withheld at source) or any installment thereof or any other liability to this State in respect thereof; c. Filing a protest with the Director under § 523 of this title, filing a petition with the Tax Appeal Board under § 544 of this title or filing an appeal of a decision rendered by the Tax Appeal Board under § 331 of this title; d. Allowance of a credit or refund of any tax; e. Filing a claim for credit or refund of any tax; f. Assessment of any tax; g. Giving or making any notice or demand for the payment of any tax, or with respect to any liability to this State in respect of any tax; h. Collection of the amount of any liability in respect of any tax; i. Bringing suit or commencing any action, including the filing of any certificate or warrant, by this State or any officer on its behalf, in respect of any liability in respect of any tax; and j. Any other act required or permitted under this title (other than Chapters 30, 51 and 52) specified in regulations prescribed under this section by the Director; (2) The amount of any credit or refund (including interest). (b) (1) Except to the extent provided in paragraph (a)(2) of this section shall not apply for purposes of determining the amount of interest on any overpayment of tax. (2) If an individual is entitled to the benefits of subsection (a) of this section with respect to any return and such return is timely filed (determined after the application of subsection (a) of this section), interest shall be allowed on any overpayment commencing with the forty-sixth day after the due date for the return (determined after the application of subsection (a) of this section). (c) The provisions of this section shall apply to the spouse of any individual entitled to the benefits of subsection (a) of this section. Except in the case of the combat zone designated for purposes of the Vietnam conflict, the preceding sentence shall not cause this section to apply to any spouse for any taxable year beginning more than 2 years after the date designated under § 112 of the Internal Revenue Code (26 U.S.C. § 112) as the date of termination of combatant activities in a combat zone. (d) The period of service in the area referred to in subsection (a) of this section shall include the period during which an individual entitled to benefits under said subsection (a) of this section is in a missing status, within the meaning of § 6013(f)(3) of the Internal Revenue Code (26 U.S.C. § 6013(f)(3)). (e) (1) Notwithstanding the provisions of subsection (a) of this section, any action or proceeding authorized by § 560, § 561 or § 1221 [repealed] of this title (regardless of the taxable period for which the tax arose), as well as any other action or proceeding authorized by law in connection therewith, may be taken, begun or prosecuted. In any other case in which the Director determines that collection of the amount of any assessment would be jeopardized by delay, the provisions of subsection (a) of this section shall not operate to stay collection of such amount as authorized by law. There shall be excluded from any amount assessed or collected pursuant to this paragraph (e)(1) the amount of interest, penalty, additional amount and addition to the tax, if any, in respect of the period disregarded under subsection (a) of this section. In any case to which this paragraph (e)(1) relates, if the Director is required to give any notice to or make any demand upon any person, such requirement shall be deemed to be satisfied if the notice or demand is prepared and signed, in any case in which the address of such person last known to the Director is in any area for which United States post offices under instructions of the Postmaster General of the United States are not, by reason of combatant activities, accepting mail for delivery at the time the notice or demand is signed. In such case the notice or demand shall be deemed to have been given or made upon the date it is signed. (2) The assessment or collection of any tax or of any liability to this State in respect of any tax, or any action or proceeding by or on behalf of this State in connection therewith, may be made, taken, begun or prosecuted in accordance with law, without regard to the provisions of subsection (a) of this section, unless prior to such assessment, collection, action or proceeding it is ascertained that the person concerned is entitled to the benefits of subsection (a) of this section. (f) (1) Any individual who performed Desert Shield services (and the spouse of such individual) shall be entitled to the benefits of this section in the same manner as if such services were referred to in subsection (a) of this section. (2) For purposes of this subsection, the term “Desert Shield services” means any services in the armed forces of the United States or in support of such armed forces if: a. Such services are performed in the area designated by the President pursuant to this subparagraph as the “Persian Gulf Desert Shield Area”; and b. Such services are performed during the period beginning on August 2, 1990, and ending on the date on which any portion of the area referred to in subparagraph a is designated by the President as a combat zone pursuant to § 112 of the Internal Revenue Code (26 U.S.C. § 112). (g) For purposes of subsection (a) of this section, the term “qualified hospitalization” means: (1) Any hospitalization outside the United States; and (2) Any hospitalization inside the United States, except that not more than 5 years of hospitalization may be taken into account under this paragraph (g)(2). This paragraph (g)(2) of this subsection shall not apply for purposes of applying this section with respect to the spouse of any individual entitled to the benefits of subsection (a) of this section. 68 Del. Laws, c. 187, §  1 ; 71 Del. Laws, c. 353, §  13 ; 71 Del. Laws, c. 385, §  6 ; § 530 Assessment of tax. (a) The amount of tax which is shown to be due on any return (including any additional amount subject to notice under § 528(a) of this title as a result of a mathematical or clerical error) shall be deemed to be assessed on the date of filing such return, and an increase in such tax which is shown on an amended return shall be deemed to be assessed on the date of filing such amended return. In the case of a return filed without the computation of the tax, the tax computed by the Director shall be deemed to be assessed on the date when payment of such tax is due. If a notice of proposed assessment has been mailed pursuant to § 521(c) of this title, the amount of the proposed assessment shall be deemed to be assessed, if no protest under § 523 of this title is timely filed, on the date provided in § 522 of this title, or, if such a protest is timely filed, on the date when the determination of the Director becomes final pursuant to § 525 of this title; provided, however, that, if the taxpayer seeks review of the Director’s determination pursuant to § 544 of this title, the amount of the proposed assessment shall not be deemed to be assessed until the expiration of 60 days (30 days in the case of trust fund taxes, or, in the case of other taxes imposed by Chapter 11 of this title, 120 days if the taxpayer is outside the United States) from the first date when: (1) The determination of the Tax Appeal Board under § 544 of this title becomes final and not subject to judicial review under § 331 of this title; or (2) If the taxpayer appeals from the Tax Appeal Board determination pursuant to § 331 of this title, an order of the Superior Court of the State or the Supreme Court of the State entered upon the decision on such appeal becomes final and not subject to appeal. If an amended return or report filed pursuant to § 514 of this title concedes the accuracy of a federal change or correction, any deficiency in tax under this title resulting therefrom shall be deemed to be assessed on the date of filing such amended return or report, and such assessment shall be deemed timely notwithstanding any other provisions of this chapter. Any amount paid as a tax, or in respect of a tax, other than amounts withheld at the source or paid as estimated income tax, shall be deemed to be assessed upon the date of the Director’s receipt of payment, notwithstanding any other provision of this title. (b) If the mode or time for the assessment of any tax under this title or Title 4, including interest, penalties, additional amounts and additions to the tax, is not otherwise provided for, the Director may establish the same by regulations. (c) The Director may, at any time within the period prescribed for assessment, make a supplemental assessment, subject to the provisions of § 521 of this title where applicable, whenever it is found that any assessment is imperfect or incomplete in any material respect. 68 Del. Laws, c. 187, §  1 ; 84 Del. Laws, c. 301, § 16 ; 85 Del. Laws, c. 301, § 3 ; § 531 Limitations on assessment. (a) Except as otherwise provided in this section, a notice of proposed assessment under § 521(c) of this title shall be mailed to the taxpayer within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed). No deficiency shall be assessed or collected with respect to the taxable period for which a return was filed unless such notice is mailed within such 3-year period, or within the period otherwise prescribed in this section. (b) In the case of a deficiency in any license fee or tax under Part III of this title, a notice of proposed assessment under § 521(c) of this title shall be mailed to the taxpayer within 3 years after the expiration date of the license to which the proposed assessment relates. (c) If no return is filed, or if a false and fraudulent return is filed with intent to evade any tax imposed by this title or Title 4, a notice of proposed assessment under § 521(c) of this title may be mailed to the taxpayer at any time. (d) If the taxpayer fails to comply with the requirement of § 514 of this title by not reporting a change or correction to the federal income or estate tax return, or by not filing an amended return under this title, a notice of proposed assessment under § 521(c) of this title may be mailed to the taxpayer at any time. (e) If the taxpayer shall, pursuant to § 514 of this title, report a change or correction or file an amended federal income or estate tax return increasing the federal tax liability, a notice of proposed assessment under § 521(c) of this title with respect to such change or correction (if not otherwise deemed to have been assessed under § 530(a) of this title upon the filing of such report or amended return) may be mailed to the taxpayer at any time within 2 years after such report or amended return was filed. (f) Where, before the expiration of the time prescribed in this section for the mailing of a notice of proposed assessment under § 521(c) of this title, both the Director and the taxpayer shall have consented in writing to such assessment after such time, the proposed assessment may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. An agreement between the taxpayer and the Internal Revenue Service providing for the extension of the period for assessment of federal income taxes shall constitute an agreement with the Director to extend the period for assessment of income taxes under this title. A copy of any such agreement between the taxpayer and the Internal Revenue Service shall be filed by the taxpayer with the Director within 30 days after its execution. (g) For purposes of this section, a return filed before the last day prescribed by law or by regulation promulgated pursuant to law for the filing thereof shall be considered as filed on such last day. (h) The running of the period of limitations provided for in this section on the making of assessments shall, in a case under Title 11 of the United States Code, be suspended for the period during which the Director is prohibited by reason of such case from making the assessment plus 60 days thereafter. (i) If a taxpayer misstates on a return any element of an income tax calculation which results in tax that exceeds 25% of the amount of tax stated on the return, the tax may be assessed at any time within 6 years after the return was filed. If a taxpayer misstates on a return any amount of license fee or tax under Part III of this title includible therein which exceeds 25% of the amount of tax stated on the return, the tax may be assessed at any time within 6 years after the expiration date of the license to which the proposed assessment relates. 68 Del. Laws, c. 187, §  1 ; 70 Del. Laws, c. 186, §  1 ; 71 Del. Laws, c. 144, §  1 ; 71 Del. Laws, c. 385, §§  7, 8 ; 72 Del. Laws, c. 112, §  3 ; 81 Del. Laws, c. 19, § 1 ; 85 Del. Laws, c. 301, § 4 ; § 532 Recovery of erroneous refund. (a) An erroneous refund shall be considered an underpayment of tax on the date such refund was made, and a notice of proposed assessment under § 521(c) of this title with respect to such refund may be mailed to the taxpayer at any time within the later of: (1) Two years from the making of such refund; or (2) The limitation period provided by § 531 of this title. (b) As to any part of an erroneous refund that was induced by fraud or by the intentional misrepresentation of a material fact, a notice of proposed assessment under § 521(c) of this title with respect to such refund may be mailed to the taxpayer at any time. 68 Del. Laws, c. 187, §  1 ; § 533 Interest on underpayment. (a) If any amount of tax, including tax required to be withheld by an employer, and including penalties, additional amounts and additions to the tax, imposed by this title or Title 4 is not paid on or before the last date prescribed for payment, interest on such amount at the rate of 0.5% per month, or fraction thereof, shall be payable for the period from such last date to the date such amount is paid, and from and after the date the assessment of such interest becomes final under § 522 or § 530 of this title to the date such amount is paid, such interest shall compound monthly. No interest shall be imposed if the amount due is less than $1.00, nor shall this section apply to any failure to pay estimated income tax under § 1170 or § 1904 of this title. (b) For purposes of this section, the last date prescribed for payment of any tax shall be determined without regard to any extension of time. (c) Interest prescribed under this section on any tax, including tax required to be withheld by an employer, and including penalties, additional amounts and additions to the tax, shall be assessed, collected and paid in the same manner as taxes. After an initial assessment of interest upon any amount of tax, penalty, additional amount or addition to the tax, interest shall continue to accrue on the unpaid balance of such amount until such amount has been paid in full, except as otherwise provided in subsection (e) of this section, and no further assessment of such interest shall be made. (d) Interest shall be imposed under this section in respect of any penalty, additional amount or addition to the tax from the date of the notice of proposed assessment under § 521(c) of this title of such penalty, additional amount or addition to the tax to the date of payment thereof. (e) If a proposed assessment is made with respect to any amount, and if such amount is paid within 10 days after the date of the notice of proposed assessment thereof under § 521(c) of this title, interest under this section on the amount so paid shall not be imposed for the period after the date of such notice. (f) If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this section on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment. (g) Any portion of any tax imposed, or any interest, penalty, additional amount or addition to the tax, which has been erroneously refunded and which is recoverable by the Director, shall bear interest at the rate of 0.5% per month, or fraction thereof, from the date of payment of such refund to the date of its recovery by the Director, and from and after the date the assessment of such interest becomes final under § 522 or § 530 of this title to the date of such recovery, such interest shall compound monthly. (h) Interest prescribed under this section on any tax may be assessed and collected at any time during the period within which the tax, penalty, additional amount or addition to the tax to which such interest relates may be collected. (i) If the Secretary of the Treasury of the United States extends the time for filing income tax returns under § 6081 of the Internal Revenue Code (26 U.S.C. § 6081) and the time for paying income tax with respect to such returns under § 6161 of the Internal Revenue Code (26 U.S.C. § 6161) for any taxpayer located in a Presidentially-declared disaster area, the Director shall abate for such period the assessment of any interest prescribed under this section and penalties for failure to file a return under § 534(a) of this title or to pay the tax under § 534(b) of this title on such taxpayer’s income and business license tax. For purposes of this subsection, the term “Presidentially-declared disaster area” means, with respect to any taxpayer, any area which the President of the United States has determined warrants assistance by the Federal Government under the Disaster Relief and Emergency Assistance Act. 68 Del. Laws, c. 187, §  1 ; 72 Del. Laws, c. 112, §  2 ; 75 Del. Laws, c. 411, §§  1, 2 ; § 534 Failure to file tax return or to pay tax. (a) In case of failure to file any return required under authority of this title or Title 4 on or before the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount required to be shown as tax on such return 5% of the amount of such tax if the failure is for not more than 1 month, with an additional 5% for each additional month or fraction thereof during which such failure continues, not exceeding 50% in the aggregate. For purposes of this subsection, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return. (b) (1) In case of failure to pay the amount shown as tax on any return specified in subsection (a) of this section on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount shown as tax on such return 1% of the amount of such tax if the failure is for not more than 1 month, with an additional 1% for each additional month or fraction thereof during which such failure continues, not exceeding 25% in the aggregate. For purposes of computing such addition for any month, the amount of tax shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return. If the amount required to be shown as tax on the return is less than the amount shown as tax on the return, this paragraph (b)(1) shall be applied by substituting such lower amount. (2) In the case of failure to pay any amount in respect of any tax required to be shown on a return specified in subsection (a) of this section which is not so shown (including an assessment made pursuant to § 528(a) of this title) within 10 days after any assessment thereof becoming final, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount of tax stated in the notice of proposed assessment 1% of the amount of such tax if the failure is for not more than 1 month, with an additional 1% for each additional month or fraction thereof during which such failure continues, not exceeding 25% in the aggregate. For purposes of computing such addition for any month, the amount of tax stated in the notice of proposed assessment shall be reduced by the amount of any part of the tax which is paid before the beginning of such month. (c) (1) For tax periods beginning after December 31, 1999, if any pass-through entity required to file a return under § 1605(a)(1) of this title for any taxable year fails to file such return by the date prescribed therefor (determined with regard to any extension of time for filing) or files a return which fails to show the information required under § 1605(a)(1) of this title, such pass-through entity shall be liable for a penalty determined under paragraph (c)(2) of this section for each month, or fraction thereof, during which such failure continues (but not to exceed 5 months), unless it is shown that such failure was due to reasonable cause. (2) For purposes of paragraph (c)(1) of this section, the amount of penalty for any month is the product of $25, multiplied by the number of persons who were members in the pass-through entity during any part of the taxable year; provided, however, that the maximum penalty for any taxable year shall not exceed $10,000. (3) The penalty prescribed by this subsection shall be assessed against and shall be payable by the pass-through entity, and the deficiency and appeal procedures provided in §§ 521-526 of this title shall not apply; provided, however, that the Director shall mail written notice of such penalty to the pass-through entity, which may, within 60 days from the date of the mailing of such notice, institute a protest of such penalty to the Director, whose determination shall be final. (d) (1) For tax periods beginning after December 31, 1999, if any pass-through entity fails to comply with the provisions of § 1605(a)(2) of this title, such pass-through entity shall be liable for a penalty determined under paragraph (d)(2) of this section for each month, or fraction thereof, during which such failure continues (but not to exceed 5 months), unless it is shown that such failure was due to reasonable cause. (2) For purposes of paragraph (d)(1) of this section, the amount of penalty for any month is $25, multiplied by the number of persons who were members of the pass-through entity at any time during the tax year, provided, however, that the maximum penalty for any taxable year shall not exceed $10,000. (3) The penalty prescribed by this subsection shall be assessed against and shall be payable by the pass-through entity and the deficiency and appeal procedures provided in §§ 521-526 of this title shall not apply; provided, however, that the Director shall mail written notice of such penalty to the pass-through entity, which may, within 60 days from the date of the mailing of such notice, institute a protest of such penalty to the Director, whose determination shall be final. (e) This section shall not apply to any failure to file a declaration of estimated tax or to pay any estimated tax. (f) (1) In case of each failure to file a statement of payment to another person required under the authority of this title, including the duplicate statement of tax withheld on wages, by the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be paid by the person so failing to file such statement, in the same manner as tax, a penalty of $2.00 for each such failure, but the total amount imposed on the delinquent person for all such failures during any calendar year shall not exceed $2,000. (2) Any person required to file an information return pursuant to § 1154(i) of this title who fails to file such return on or before the date prescribed for its filing or who fails to include all the information required to be shown on the return or who includes incorrect information on the return or who fails to file in the required manner, shall unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, pay a penalty in an amount equal to one half the amount specified in the Internal Revenue Code, as it may be amended from time to time, for such failure. (g) The Director shall assess a penalty of $500 against any individual who files what purports to be a return of any tax imposed by this title or Title 4 but which: (1) Does not contain information on which the substantial correctness of the self-assessment may be judged or contains information that on its face indicates that the self-assessment is substantially incorrect; and (2) Evidences a position that is frivolous or a desire to delay or impede the administration of the revenue laws of this State. (h) In the case of failure of an employer required to deposit taxes by electronic funds transfer under the provisions of § 1154(g) of this title to make transfer by such means, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount shown as tax required to have been electronically transferred 5% of the amount or $500 per required payment, whichever is less. (i) For tax periods beginning after December 31, 1994, with respect to any return, the amount of the addition to the tax under subsection (a) of this section shall be reduced by the amount of the addition to the tax under subsection (b) of this section for any month (or fraction thereof) to which an addition to the tax is applied under both subsections (a) and (b) of this section. (j) If any failure to file any return is fraudulent, subsection (a) of this section shall be applied by substituting “15” for “5%” each place it appears and by substituting “75%” for “50%.” (k) For purposes of subsection (a) of this section, reasonable cause shall be deemed established in the case of failure to file a return in the time prescribed by Part III of this title, where the taxpayer filed within the time prescribed in a written notification by the Director that the taxpayer is eligible to file returns on a basis less frequent than is actually the case. ( l ) In the case of failure of any person to obtain or renew a business license required under the provisions of Part III of this title, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount of the business license fee required to be paid a penalty in the amount of $200. Whenever a penalty has been proposed for assessment under this subsection, the Director shall not be required to issue a business license to the taxpayer to whom such assessment has been proposed unless and until the taxpayer has paid any license fee necessary for issuance of such license and has either: (1) Paid the assessment provided under this subsection (subject to any claim for refund); or (2) Filed a written protest regarding such assessment of penalty pursuant to § 523 of this title. The penalty described in this subsection shall not be assessed in the instance of self-disclosure by a taxpayer of delinquency in meeting the licensing requirements of Part III. The penalty described in this subsection shall, only with respect to the same failure to obtain or renew a license and not with respect to failure to pay taxes on gross receipts or any other acts or omissions, be in lieu of the penalty described in subsection (a) of this section, except where such penalty determined under subsection (a) of this section shall exceed the penalty determined under this subsection, in which event subsection (a) of this section shall apply, and this subsection shall not apply. (m) Any person who fails to file any return in the manner prescribed by law and required under authority of this title or Title 4 on or before the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, shall be liable for a penalty of not more than $50, in addition to any other amounts prescribed under this title that shall be assessed and collected by the Director. 68 Del. Laws, c. 187, §  1 ; 69 Del. Laws, c. 289, §  13 ; 70 Del. Laws, c. 117, §  3 ; 71 Del. Laws, c. 314, §  7 ; 72 Del. Laws, c. 220, §  1 ; 73 Del. Laws, c. 131, §  3 ; 75 Del. Laws, c. 411, §  3 ; 77 Del. Laws, c. 79, §§  2, 3 ; 79 Del. Laws, c. 120, §§  1, 2 ; 79 Del. Laws, c. 142, §§  2-4 ; 81 Del. Laws, c. 103, § 4 ; 83 Del. Laws, c. 107, § 2 ; § 535 Fraud and other penalties. (a) If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75% of the portion of the underpayment which is attributable to fraud. If the Director establishes that any portion of an underpayment is attributable to fraud, the entire underpayment shall be treated as attributable to fraud, except with respect to any portion of the underpayment which the taxpayer establishes (by a preponderance of the evidence) is not attributable to fraud. In the case of a joint return, this section shall not apply with respect to a spouse unless some part of the underpayment is due to the fraud of such spouse. For purposes of this subsection, “underpayment” shall have the meaning ascribed to such term in § 6664(a) of the Internal Revenue Code (26 U.S.C. § 6664(a)), or successor provisions. The penalty prescribed by this subsection shall apply only in cases where a return of tax is filed. (b) If an individual subject to tax under Chapter 11 of this title fails to file a declaration of estimated tax, or fails to pay all or any part of an installment of tax imposed under Chapter 11 of this title, such individual shall be deemed to have made an underpayment of estimated tax, and there shall be added to the tax an amount equal to 1 1 / 2 % per month, or fraction thereof, of the amount of such underpayment for the period of the underpayment. The Director shall determine the amount of an underpayment of estimated tax by an individual in a manner consistent with the internal revenue laws of the United States. (c) (1) In the case of any underpayment of tentative tax or installment of estimated tax required by Chapter 19 of this title, there shall be added to the tax for the taxable year an amount equal to 1 1 / 2 % per month, or fraction thereof, of the amount of such underpayment for the period of the underpayment. (2) For purposes of paragraph (c)(1) of this section, the amount of the underpayment shall be the excess of: a. The amount of the tentative tax or installment payment which would be required to be made if the estimated tax were equal to 80% of the tax shown on the final return for the taxable year, or, if no such return was filed, 80% of the tax for such taxable year, over b. The amount, if any, of the tentative tax or the installment paid on or before the last date prescribed for payment. (3) For purposes of paragraph (c)(1) of this section, the period of the underpayment shall run from the date the tentative tax or installment was required to be paid to the first day of the fourth month following the close of the taxable year, or to the date on which paid, whichever is earlier. (4) Notwithstanding the foregoing provisions of this subsection, no addition to tax shall be imposed under this subsection if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment thereof equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were the tax shown on the final return of the taxpayer for the preceding taxable year. (5) Paragraph (c)(4) of this section shall apply only in the case of a small corporation. For purposes of this paragraph (c)(5), the term “small corporation” shall have the meaning set forth in § 1905(5) of this title. (d) If any employer fails to pay the amount shown as tax on any withholding return filed pursuant to § 1154 of this title, there shall be added to the tax an amount equal to 1% of the tax required to be shown on such return for each month, or fraction t