1. As soon as practical after the return is filed, the director of revenue shall examine it to determine the correct amount of tax. If the director of revenue finds that the amount of tax shown on the return is less than the correct amount, he shall notify the taxpayer of the amount of the deficiency proposed to be assessed. If the director of revenue finds that the tax paid is more than the correct amount, he shall credit the overpayment against any taxes due under sections 143.011 to 143.996 from the taxpayer and refund the difference. No deficiency shall be proposed and no refund shall be made pursuant to this or any section of sections 143.011 to 143.996 unless the amount exceeds one dollar.

2. If the taxpayer fails to file an income tax return, the director of revenue shall estimate the taxpayer’s taxable income and the tax thereon from any available information and notify the taxpayer of the amount proposed to be assessed as in the case of a deficiency.

3. The notice required by subsections 1 and 2 of this section, hereafter referred to as a notice of deficiency, shall set forth the reason for the proposed assessment. The notice of deficiency shall be mailed by certified or registered mail to the taxpayer at his last known address. In the case of a combined return, the notice of deficiency may be a single combined notice except that if the director of revenue is notified by either spouse that separate residences have been established he shall mail notices to each spouse. If the taxpayer is deceased, is under a legal disability, or, in the case of a corporation, has terminated its existence, a notice of deficiency may be mailed to his last known address unless the director of revenue has received notice of the existence and address of a person to receive notices with respect to such taxpayer.