Which statement is true regarding the prescriptive period when a protest is pending?

Which statement is true regarding the prescriptive period when a protest is pending?

• A. Both reinvestigation and reconsideration suspend the prescriptive period
• B. Reinvestigation suspends the prescriptive period, while reconsideration does not
• C. Reconsideration suspends the prescriptive period, while reinvestigation does not
• D. The prescriptive period is not affected by either

Answer: (B)

Prescriptive period is the time limit the tax authority has to assess or collect a deficiency. When a protest is pending, the type of action taken affects whether that time clock stops. Reinvestigation involves a new, fact-finding review of the case, so the process needs the full time to proceed without the pressure of the deadline. Because this is a formal re-examination that can change the outcome, the prescriptive period is suspended during reinvestigation. Reconsideration, by contrast, is a review of the prior decision without opening a new round of factual investigation; it doesn’t introduce fresh findings that would extend the review window, so the prescriptive period continues to run. Hence, reinvestigation suspends the prescriptive period, while reconsideration does not.

Prescriptive period is the time limit the tax authority has to assess or collect a deficiency. When a protest is pending, the type of action taken affects whether that time clock stops. Reinvestigation involves a new, fact-finding review of the case, so the process needs the full time to proceed without the pressure of the deadline. Because this is a formal re-examination that can change the outcome, the prescriptive period is suspended during reinvestigation. Reconsideration, by contrast, is a review of the prior decision without opening a new round of factual investigation; it doesn’t introduce fresh findings that would extend the review window, so the prescriptive period continues to run. Hence, reinvestigation suspends the prescriptive period, while reconsideration does not.