Illinois Administrative Code
Title 86 - REVENUE
Part 100 - INCOME TAX
Subpart BB - CREDITS AND REFUNDS
Section 100.9410 - Limitations on Claims for Refund (IITA Section 911)
Current through Register Vol. 48, No. 38, September 20, 2024
a) In General
Except as otherwise provided in this Section, no credit or refund shall be allowed or made with respect to any year unless a claim for refund or credit was filed on or before the later of:
b) Federal Changes
Irrespective of whether notification of a federal change required by IITA Section 506(b) has been filed by a taxpayer, a claim for refund may be filed not later than two years after the date the notification was due. The recoverable amount of a claim filed under this subsection (b) is limited to any overpayment resulting from a change in the taxpayer's netincome, net loss, or Article 2 credits for the taxable year for which the notification is required, and any resulting change in a net loss or Article 2 credit carryover to a subsequent year, after giving effect to the items of adjustment in the alteration required to be reported. (IITA Section 911(b)(1)) IITA Section 506(b) requires that a notification of federal change be filed with the Department not later than 120 days after the alteration has been agreed to or finally determined for federal income tax purposes or, if earlier, not later than 120 days after any federal income tax deficiency or refund, tentative carryback adjustment, or abatement or credit resulting therefrom, has been assessed or paid.
c) Extension by Agreement
d) Limit on Amount of Credit or Refund
With respect to a taxable year for which a claimant-taxpayer has filed a return and during the 3-year period in subsection (a)(1) has filed a claim for refund, the amount of the credit or refund shall not exceed the portion of the tax paid within the period immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return. (IITA Section 911(d)(1)) For the purposes of this subsection (d)(1), any amount paid on account of withheld tax or estimated tax (IITA Arts. 7 and 8) or any other payment paid as tax or in respect of tax imposed by the Act (for example tax paid with a return filed before the due date) shall be deemed to have been paid not earlier than the last day prescribed for filing the return (irrespective of extensions) for the taxable year for which the payments are applicable (see IRC section 6513(b).)
Irrespective of whether a return was filed, if the claim was not filed within the 3-year period in subsection (a) or within an agreed-to extended period for filing of a refund claim, the amount of credit or refund shall not exceed the portion of the tax paid during the one year immediately preceding the filing of the claim. (IITA Section 911(d)(2))
If the claim is filed prior to the expiration of an extended period for filing under subsection (c), the credit or refund is limited to the amount that could have been allowed if the claim had been filed prior to the expiration of the period that was extended.
e) Time Return Deemed Filed
For purposes of this Section, a tax return filed before the last day prescribed by law for the filing of the return (including any extensions) shall be deemed to have been filed on the last day. (IITA Section 911(e)) The last day prescribed for filing returns shall include any automatic extensions of time for filing, regardless of whether the taxpayer filed the return prior to the unextended due date.
f) Special Period of Limitation with Respect to Net Loss Carrybacks
The 3-year period of limitation prescribed in subsection (a)(1) does not apply if the claim for refund relates to an overpayment attributable to a net loss carryback provided by IITA Section 207. Instead, the period of limitation shall be that period which ends 3 years after the time for filing the return (including extensions) for the taxable year in which the net loss occurs, or the period prescribed in subsection (c) in respect of that taxable year, whichever expires later. The amount of the refund may exceed the portion of the tax paid within the period provided in subsection (d) to the extent of the amount of the overpayment attributable to the net loss carryback.
g) Net Losses. On and after August 23, 2002, no claim for refund shall be allowed to the extent the refund is the result of an amount of net loss incurred under IITA Section 207 that was not reported to the Department within 3 years after the due date (including extensions) of the return for the loss year on either the original return filed by the taxpayer or on amended return or to the extent that the refund is the result of an amount of net loss incurred in any taxable year under Section 207 for which no return was filed within 3 years after the due date (including extensions) of the return for the loss year. (IITA Section 911(h))
EXAMPLE:
Corporation A and its wholly-owned subsidiary Corporation B are members of a unitary business group, but filed separate returns for calendar years 2005 through 2009. Corporation A reported positive net income every year, and Corporation B reported net losses under IITA Section 207 for each year. After auditing Corporation A's returns for 2007, 2008 and 2009, the Department adjusted various items of income and apportionment, and issued notices of deficiency. The limitations periods for filing claims for refund have expired for 2005 and 2006, but not for the later years.
The taxpayer may file amended returns for all of the years in question to combine the corporations so that Corporation B's net losses for the years under audit can offset the income of Corporation A, and may carry any combined net loss properly determined for any year (including 2005 and 2006) to each subsequent year in order to determine the correct liabilities for the years 2007, 2008 and 2009, and reduce or eliminate the deficiencies determined by the Department or to claim refunds for the open years.
h) Periods of Limitation Suspended While Taxpayer is Unable to Manage Financial Affairs Due to Disability