AR HB1681

Amends Arkansas Tax Procedure Act to define "erroneously paid refund" as a refund of tax received by a taxpayer that was not entitled to receive the refund.

Classifies erroneously paid refunds as underpayments of tax and tax deficiencies subject to assessment by the state.

Establishes a 3-year statute of limitations from the date of the refund warrant for assessments to recover erroneously paid refunds, with no time limit for refunds paid as a result of fraud or misrepresentation by the taxpayer.

Requires the director to issue a notice of proposed assessment for the erroneously paid refund amount plus interest and authorized penalties, explaining the basis for the assessment and informing the taxpayer of their right to protest under existing procedures.

Allows interest and penalties on erroneously paid refunds to be waived or abated if the refund resulted from an error by the Department of Finance and Administration.