Full Text of SB0337 98th General Assembly
SB0337sam001 98TH GENERAL ASSEMBLY | Sen. Toi W. Hutchinson Filed: 4/15/2013
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| 1 | | AMENDMENT TO SENATE BILL 337
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 337 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 502 as follows:
| 6 | | (35 ILCS 5/502) (from Ch. 120, par. 5-502)
| 7 | | Sec. 502. Returns and notices.
| 8 | | (a) In general. A return with respect to the taxes imposed | 9 | | by this
Act shall be made by every person for any taxable year:
| 10 | | (1) for which such person is liable for a tax imposed | 11 | | by this Act,
or
| 12 | | (2) in the case of a resident or in the case of a | 13 | | corporation which
is qualified to do business in this | 14 | | State, for which such person is
required to make a federal | 15 | | income tax return, regardless of whether such
person is | 16 | | liable for a tax imposed by this Act. However, this |
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| 1 | | paragraph
shall not require a resident to make a return if | 2 | | such person has
an
Illinois base income of the basic amount | 3 | | in Section 204(b) or
less and is either claimed as a | 4 | | dependent on
another person's tax return under the Internal | 5 | | Revenue Code, or is
claimed as a dependent on another | 6 | | person's tax return under this Act.
| 7 | | Notwithstanding the provisions of paragraph (1), a | 8 | | nonresident (other than, for taxable years ending on or after | 9 | | December 31, 2011, a nonresident required to withhold tax under | 10 | | Section 709.5) whose Illinois income tax liability under | 11 | | subsections (a), (b), (c), and (d) of Section 201 of this Act | 12 | | is paid in full after taking into account the credits allowed | 13 | | under subsection (f) of this Section or allowed under Section | 14 | | 709.5 of this Act shall not be required to file a return under | 15 | | this subsection (a).
| 16 | | (b) Fiduciaries and receivers.
| 17 | | (1) Decedents. If an individual is deceased, any return | 18 | | or notice
required of such individual under this Act shall | 19 | | be made by his
executor, administrator, or other person | 20 | | charged with the property of
such decedent.
| 21 | | (2) Individuals under a disability. If an individual is | 22 | | unable
to make a return or notice required under this Act, | 23 | | the return or notice
required of such individual shall be | 24 | | made by his duly authorized agent,
guardian, fiduciary or | 25 | | other person charged with the care
of the person or | 26 | | property of such individual.
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| 1 | | (3) Estates and trusts. Returns or notices required of | 2 | | an estate
or a trust shall be made by the fiduciary | 3 | | thereof.
| 4 | | (4) Receivers, trustees and assignees for | 5 | | corporations. In a
case where a receiver, trustee in | 6 | | bankruptcy, or assignee, by order of a
court of competent | 7 | | jurisdiction, by operation of law, or otherwise, has
| 8 | | possession of or holds title to all or substantially all | 9 | | the property or
business of a corporation, whether or not | 10 | | such property or business is
being operated, such receiver, | 11 | | trustee, or assignee shall make the
returns and notices | 12 | | required of such corporation in the same manner and
form as | 13 | | corporations are required to make such returns and notices.
| 14 | | (c) Joint returns by husband and wife.
| 15 | | (1) Except as provided in paragraph (3): | 16 | | (A) if a husband and wife file a
joint federal | 17 | | income tax return for a taxable year ending before | 18 | | December 31, 2009, they shall file a joint
return under | 19 | | this Act for such taxable year and their liabilities | 20 | | shall be
joint and several; | 21 | | (B) if a husband and wife file a joint federal | 22 | | income tax return for a taxable year ending on or after | 23 | | December 31, 2009, they may elect to file separate | 24 | | returns under this Act for such taxable year. The | 25 | | election under this paragraph must be made on or before | 26 | | the due date (including extensions) of the return and, |
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| 1 | | once made, shall be irrevocable. If no election is | 2 | | timely made under this paragraph for a taxable year: | 3 | | (i) the couple must file a joint return under | 4 | | this Act for such taxable year, | 5 | | (ii) their liabilities shall be joint and | 6 | | several, and | 7 | | (iii) any overpayment for that taxable year | 8 | | may be withheld under Section 909 of this Act or | 9 | | under Section 2505-275 of the Civil Administrative | 10 | | Code of Illinois and applied against a debt of | 11 | | either spouse without regard to the amount of the | 12 | | overpayment attributable to the other spouse; and | 13 | | (C) if the federal income tax liability of either | 14 | | spouse is
determined on a separate federal income tax | 15 | | return, they shall file separate
returns under this | 16 | | Act.
| 17 | | (2) If neither spouse is required to file a federal | 18 | | income tax
return and either or both are required to file a | 19 | | return under this Act,
they may elect to file separate or | 20 | | joint returns and pursuant to such
election their | 21 | | liabilities shall be separate or joint and several.
| 22 | | (3) If either husband or wife is a resident and the | 23 | | other is a
nonresident, they shall file separate returns in | 24 | | this State on such
forms as may be required by the | 25 | | Department in which event their tax
liabilities shall be | 26 | | separate; but if they file a joint federal income tax |
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| 1 | | return for a taxable year, they may elect to determine | 2 | | their
joint net income and file a joint return for that | 3 | | taxable year under the provisions of paragraph (1) of this | 4 | | subsection as if both were residents and
in such case, | 5 | | their liabilities shall be joint and several.
| 6 | | (4) Innocent spouses.
| 7 | | (A) However, for tax liabilities arising and paid | 8 | | prior to August 13,
1999, an innocent spouse shall be | 9 | | relieved of
liability for tax
(including interest and | 10 | | penalties) for any taxable year for which a joint
| 11 | | return has been made, upon submission of proof that the | 12 | | Internal Revenue
Service has made a determination | 13 | | under Section 6013(e) of the Internal
Revenue Code, for | 14 | | the same taxable year, which determination relieved | 15 | | the
spouse from liability for federal income taxes.
If | 16 | | there is no federal income tax liability at issue for | 17 | | the
same taxable year, the Department shall rely on the | 18 | | provisions of Section
6013(e) to determine whether the | 19 | | person requesting innocent spouse abatement of
tax, | 20 | | penalty, and interest is entitled to that relief.
| 21 | | (B) For tax liabilities arising on and after August | 22 | | 13, 1999 or which arose prior to that date, but remain | 23 | | unpaid as of that date, if
an individual
who filed a | 24 | | joint return for any taxable year has made an election | 25 | | under this
paragraph, the individual's liability for | 26 | | any tax shown on the joint return
shall not exceed the |
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| 1 | | individual's separate return amount and the | 2 | | individual's
liability for any deficiency assessed for | 3 | | that taxable year shall not exceed
the portion of the | 4 | | deficiency properly allocable to the individual. For
| 5 | | purposes of this paragraph:
| 6 | | (i) An election properly made pursuant to | 7 | | Section 6015 of the Internal
Revenue Code shall | 8 | | constitute an election under this paragraph, | 9 | | provided that
the election shall not be effective | 10 | | until the individual has notified the
Department | 11 | | of the election in the form and manner prescribed | 12 | | by the Department.
| 13 | | (ii) If no election has been made under Section | 14 | | 6015, the individual
may make an election under | 15 | | this paragraph in the form and manner prescribed by
| 16 | | the Department, provided that no election may be | 17 | | made if the Department finds
that assets were | 18 | | transferred
between individuals filing a joint | 19 | | return as part of a scheme by such
individuals to | 20 | | avoid payment of Illinois income tax and the | 21 | | election shall not
eliminate the individual's | 22 | | liability for any portion of a deficiency
| 23 | | attributable to an error on the return of which the | 24 | | individual had actual
knowledge as of the date of | 25 | | filing.
| 26 | | (iii) In determining the separate return |
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| 1 | | amount or portion of any
deficiency attributable | 2 | | to an individual, the Department shall follow the
| 3 | | provisions in subsections (c) and (d) of Section | 4 | | 6015 of the Internal Revenue Code.
| 5 | | (iv) In determining the validity of an | 6 | | individual's election under
subparagraph (ii) and | 7 | | in determining an electing individual's separate | 8 | | return
amount or portion of any deficiency under | 9 | | subparagraph (iii), any determination
made by the | 10 | | Secretary of the Treasury, by the United States Tax | 11 | | Court on
petition for review of a determination by | 12 | | the Secretary of the Treasury, or on
appeal from | 13 | | the United States Tax Court under Section 6015 of
| 14 | | the Internal
Revenue Code regarding criteria for | 15 | | eligibility or under subsection (d) of
Section | 16 | | 6015
of the Internal Revenue Code regarding the | 17 | | allocation of any item of income,
deduction, | 18 | | payment, or credit between an individual making | 19 | | the federal election
and that individual's spouse | 20 | | shall be conclusively presumed to be correct.
With | 21 | | respect to any item that is not the subject of a | 22 | | determination by the
Secretary of the Treasury or | 23 | | the federal courts, in any proceeding
involving | 24 | | this subsection, the
individual making the | 25 | | election shall have the burden of proof with | 26 | | respect to
any item except that the Department |
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| 1 | | shall have the burden of proof with respect
to | 2 | | items in subdivision (ii).
| 3 | | (v) Any election made by an individual under | 4 | | this subsection shall
apply to all years for which | 5 | | that individual and the spouse named in the
| 6 | | election have filed a joint return.
| 7 | | (vi) After receiving a notice that the federal | 8 | | election has been made
or after receiving an | 9 | | election under subdivision (ii), the Department | 10 | | shall
take no collection action against the | 11 | | electing individual for any liability
arising from | 12 | | a joint return covered by the election until the | 13 | | Department has
notified the electing individual in | 14 | | writing that the election is invalid or of
the | 15 | | portion of the liability the Department has | 16 | | allocated to the electing
individual. Within 60 | 17 | | days (150 days if the individual is outside the | 18 | | United
States) after the issuance of such | 19 | | notification, the individual may file a
written | 20 | | protest of the denial of the election or of the | 21 | | Department's
determination of the liability | 22 | | allocated to him or her and shall be granted a
| 23 | | hearing within the Department under the provisions | 24 | | of Section 908. If a
protest is filed, the | 25 | | Department shall take no collection action against | 26 | | the
electing individual until the decision |
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| 1 | | regarding the protest has become final
under | 2 | | subsection (d) of Section 908 or, if | 3 | | administrative review of the
Department's decision
| 4 | | is requested under Section 1201, until the | 5 | | decision of the court becomes
final.
| 6 | | (d) Partnerships. Every partnership having any base income
| 7 | | allocable to this State in accordance with section 305(c) shall | 8 | | retain
information concerning all items of income, gain, loss | 9 | | and
deduction; the names and addresses of all of the partners, | 10 | | or names and
addresses of members of a limited liability | 11 | | company, or other
persons who would be entitled to share in the | 12 | | base income of the
partnership if distributed; the amount of | 13 | | the distributive share of
each; and such other pertinent | 14 | | information as the Department may by
forms or regulations | 15 | | prescribe. The partnership shall make that information
| 16 | | available to the Department when requested by the Department.
| 17 | | (e) For taxable years ending on or after December 31, 1985, | 18 | | and before
December 31, 1993, taxpayers
that are corporations | 19 | | (other than Subchapter S corporations) having the
same taxable | 20 | | year and that are members of the same unitary business group
| 21 | | may elect to be treated as one taxpayer for purposes of any | 22 | | original return,
amended return which includes the same | 23 | | taxpayers of the unitary group which
joined in the election to | 24 | | file the original return, extension, claim for
refund, | 25 | | assessment, collection and payment and determination of the
| 26 | | group's tax liability under this Act. This subsection (e) does |
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| 1 | | not permit the
election to be made for some, but not all, of | 2 | | the purposes enumerated above.
For taxable years ending on or | 3 | | after December 31, 1987, corporate members
(other than | 4 | | Subchapter S corporations) of the same unitary business group
| 5 | | making this subsection (e) election are not required to have | 6 | | the same taxable
year.
| 7 | | For taxable years ending on or after December 31, 1993, | 8 | | taxpayers that are
corporations (other than Subchapter S | 9 | | corporations) and that are members of
the same unitary business | 10 | | group shall be treated as one taxpayer for purposes
of any | 11 | | original return, amended return which includes the same | 12 | | taxpayers of the
unitary group which joined in filing the | 13 | | original return, extension, claim for
refund, assessment, | 14 | | collection and payment and determination of the group's tax
| 15 | | liability under this Act.
| 16 | | (f) The Department may promulgate regulations to permit | 17 | | nonresident
individual partners of the same partnership, | 18 | | nonresident Subchapter S
corporation shareholders of the same | 19 | | Subchapter S corporation, and
nonresident individuals | 20 | | transacting an insurance business in Illinois under
a Lloyds | 21 | | plan of operation, and nonresident individual members of the | 22 | | same
limited liability company that is treated as a partnership | 23 | | under Section 1501
(a)(16) of this Act, to file composite | 24 | | individual income tax returns
reflecting the composite income | 25 | | of such individuals allocable to Illinois
and to make composite | 26 | | individual income tax payments. The Department may
by |
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| 1 | | regulation also permit such composite returns to include the | 2 | | income tax
owed by Illinois residents attributable to their | 3 | | income from partnerships,
Subchapter S corporations, insurance | 4 | | businesses organized under a Lloyds
plan of operation, or | 5 | | limited liability companies that are treated as
partnership | 6 | | under Section 1501(a)(16) of this Act, in which case such
| 7 | | Illinois residents will be permitted to claim credits on their | 8 | | individual
returns for their shares of the composite tax | 9 | | payments. This paragraph of
subsection (f) applies to taxable | 10 | | years ending on or after December 31, 1987.
| 11 | | For taxable years ending on or after December 31, 1999, the | 12 | | Department may,
by regulation, also permit any persons | 13 | | transacting an insurance business
organized under a Lloyds plan | 14 | | of operation to file composite returns reflecting
the income of | 15 | | such persons allocable to Illinois and the tax rates applicable
| 16 | | to such persons under Section 201 and to make composite tax | 17 | | payments and shall,
by regulation, also provide that the income | 18 | | and apportionment factors
attributable to the transaction of an | 19 | | insurance business organized under a
Lloyds plan of operation | 20 | | by any person joining in the filing of a composite
return | 21 | | shall, for purposes of allocating and apportioning income under | 22 | | Article
3 of this Act and computing net income under Section | 23 | | 202 of this Act, be
excluded from any other income and | 24 | | apportionment factors of that person or of
any unitary business | 25 | | group, as defined in subdivision (a)(27) of Section 1501,
to | 26 | | which that person may belong.
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| 1 | | For taxable years ending on or after December 31, 2008, | 2 | | every nonresident shall be allowed a credit against his or her | 3 | | liability under subsections (a) and (b) of Section 201 for any | 4 | | amount of tax reported on a composite return and paid on his or | 5 | | her behalf under this subsection (f). Residents (other than | 6 | | persons transacting an insurance business organized under a | 7 | | Lloyds plan of operation) may claim a credit for taxes reported | 8 | | on a composite return and paid on their behalf under this | 9 | | subsection (f) only as permitted by the Department by rule.
| 10 | | (f-5) For taxable years ending on or after December 31, | 11 | | 2008, the Department may adopt rules to provide that, when a | 12 | | partnership or Subchapter S corporation has made an error in | 13 | | determining the amount of any item of income, deduction, | 14 | | addition, subtraction, or credit required to be reported on its | 15 | | return that affects the liability imposed under this Act on a | 16 | | partner or shareholder, the partnership or Subchapter S | 17 | | corporation may report the changes in liabilities of its | 18 | | partners or shareholders and claim a refund of the resulting | 19 | | overpayments, or pay the resulting underpayments, on behalf of | 20 | | its partners and shareholders.
| 21 | | (g) The Department may adopt rules to authorize the | 22 | | electronic filing of
any return required to be filed under this | 23 | | Section.
| 24 | | (h) The Department shall provide a taxpayer receipt to each | 25 | | Illinois individual income tax filer who filed an electronic | 26 | | income tax return for the preceding taxable year directly |
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| 1 | | through the Illinois Department of Revenue's website on or | 2 | | after the effective date of this amendatory Act of the 98th | 3 | | General Assembly. For purposes of this subsection, each | 4 | | taxpayer receipt shall: | 5 | | (1) confirm that the Department has received the | 6 | | taxpayer's Illinois individual income tax return for the | 7 | | prior taxable calendar year; | 8 | | (2) contain tables or other graphic representations | 9 | | including, but not limited to, the following information: | 10 | | (A) categories of prior State fiscal year revenue; | 11 | | (B) categories of prior State fiscal year | 12 | | spending; and | 13 | | (C) with respect to each revenue and spending | 14 | | category, the ratio (expressed as a percentage) and | 15 | | proportional amount (expressed in dollars) of State | 16 | | revenue and spending for the preceding fiscal year. | 17 | | When a taxpayer files a State income tax return | 18 | | electronically through the Department's website, the receipt | 19 | | shall be generated as part of the electronic confirmation of | 20 | | filing. | 21 | | The Department shall also make available on its public | 22 | | website the information described in paragraph (2) of this | 23 | | subsection (h). In addition, the Department may make available | 24 | | on its public website an interactive tool that will calculate | 25 | | the dollars allocated to the spending categories described in | 26 | | paragraph (2) of this subsection (h) according to input |
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| 1 | | provided by any visitor to the site. | 2 | | (Source: P.A. 96-520, eff. 8-14-09; 97-507, eff. 8-23-11.)
| 3 | | Section 99. Effective date. This Act takes effect January | 4 | | 1, 2014.".
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