§ 9777. Determination of tax or penalty

(a) If a return required by this chapter is not filed, or if a return when filed, is incorrect or insufficient, the amount of tax due shall be determined by the Commissioner from any information available. If necessary, the tax may be estimated on the basis of external indices, such as stock on hand, purchases, rental paid (location, scale of rents or charges, comparable rents or charges, type of accommodations and service), number of employees, or other factors. Notice of the determination shall be given to the person liable for the collection of payment of the tax. The determination shall finally and irrevocably fix the tax 60 days after giving notice of the determination unless the person against whom it is assessed shall apply in writing to the Commissioner for a hearing, or unless the Commissioner of his or her own motion shall redetermine the tax. After the hearing, the Commissioner shall give notice of his or her determination to the person against whom the tax is assessed.

(b) Assessment of a penalty under subsection 9816(e) of this title shall become fixed unless the person against whom the penalty is assessed shall apply within 60 days of the date of the assessment to the Commissioner for a hearing, or unless the Commissioner on his or her own motion shall redetermine the penalty. After the hearing, the Commissioner shall give notice of the determination to the person against whom the penalty is assessed.

(c) Notwithstanding subsections (a) and (b) of this section, the Commissioner, if he or she believes the collection from a taxpayer of any deficiency, penalty or interest to be in jeopardy, may demand, in writing, that the taxpayer pay the deficiency, penalty, or interest forthwith. The demand may be made concurrently with, or after, the notice of deficiency or the assessment of penalty or interest given to the taxpayer under subsection 9777(a) or (b) of this section. The amount of deficiency, penalty, or interest shall be collectible by the Commissioner on the date of the demand, unless the taxpayer files with the Commissioner a bond in an amount equal to the deficiency, penalty, or interest sought to be collected as security for such amount as finally may be determined. (Added 1969, No. 144, § 1, eff. June 1, 1969; amended 1989, No. 222 (Adj. Sess.) § 26, eff. date, see note below; 1991, No. 67, § 20, eff. June 19, 1991; 1991, No. 186 (Adj. Sess.), § 43, eff. May 7, 1992.)