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91_HB4431sam001
LRB9110442SMdvam05
1 AMENDMENT TO HOUSE BILL 4431
2 AMENDMENT NO. . Amend House Bill 4431 on page 1,
3 line 5, after "405,", by inserting "502,"; and
4 on page 52, immediately below line 22, by inserting the
5 following:
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
9 imposed by this Act shall be made by every person for any
10 taxable year:
11 (1) For which such person is liable for a tax
12 imposed by this Act, or
13 (2) In the case of a resident or in the case of a
14 corporation which is qualified to do business in this
15 State, for which such person is required to make a
16 federal income tax return, regardless of whether such
17 person is liable for a tax imposed by this Act. However,
18 this paragraph shall not require a resident to make a
19 return if such person has an Illinois base income of the
20 basic amount in Section 204(b) or less and is either
21 claimed as a dependent on another person's tax return
22 under the Internal Revenue Code of 1986, or is claimed as
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1 a dependent on another person's tax return under this
2 Act.
3 (b) Fiduciaries and receivers.
4 (1) Decedents. If an individual is deceased, any
5 return or notice required of such individual under this
6 Act shall be made by his executor, administrator, or
7 other person charged with the property of such decedent.
8 (2) Individuals under a disability. If an
9 individual is unable to make a return or notice required
10 under this Act, the return or notice required of such
11 individual shall be made by his duly authorized agent,
12 guardian, fiduciary or other person charged with the care
13 of the person or property of such individual.
14 (3) Estates and trusts. Returns or notices required
15 of an estate or a trust shall be made by the fiduciary
16 thereof.
17 (4) Receivers, trustees and assignees for
18 corporations. In a case where a receiver, trustee in
19 bankruptcy, or assignee, by order of a court of competent
20 jurisdiction, by operation of law, or otherwise, has
21 possession of or holds title to all or substantially all
22 the property or business of a corporation, whether or not
23 such property or business is being operated, such
24 receiver, trustee, or assignee shall make the returns and
25 notices required of such corporation in the same manner
26 and form as corporations are required to make such
27 returns and notices.
28 (c) Joint returns by husband and wife.
29 (1) Except as provided in paragraph (3), if a
30 husband and wife file a joint federal income tax return
31 for a taxable year they shall file a joint return under
32 this Act for such taxable year and their liabilities
33 shall be joint and several, but if the federal income tax
34 liability of either spouse is determined on a separate
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1 federal income tax return, they shall file separate
2 returns under this Act.
3 (2) If neither spouse is required to file a federal
4 income tax return and either or both are required to file
5 a return under this Act, they may elect to file separate
6 or joint returns and pursuant to such election their
7 liabilities shall be separate or joint and several.
8 (3) If either husband or wife is a resident and the
9 other is a nonresident, they shall file separate returns
10 in this State on such forms as may be required by the
11 Department in which event their tax liabilities shall be
12 separate; but they may elect to determine their joint net
13 income and file a joint return as if both were residents
14 and in such case, their liabilities shall be joint and
15 several.
16 (4) Innocent spouses.
17 (A) However, for tax liabilities arising and
18 paid prior to the effective date of this amendatory
19 Act of the 91st General Assembly, an innocent spouse
20 shall be relieved of liability for tax (including
21 interest and penalties) for any taxable year for
22 which a joint return has been made, upon submission
23 of proof that the Internal Revenue Service has made
24 a determination under Section 6013(e) of the
25 Internal Revenue Code, for the same taxable year,
26 which determination relieved the spouse from
27 liability for federal income taxes. If there is no
28 federal income tax liability at issue for the same
29 taxable year, the Department shall rely on the
30 provisions of Section 6013(e) to determine whether
31 the person requesting innocent spouse abatement of
32 tax, penalty, and interest is entitled to that
33 relief.
34 (B) For tax liabilities arising after the
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1 effective date of this amendatory Act of the 91st
2 General Assembly or which arose prior to that
3 effective date, but remain unpaid as of the
4 effective date, if an individual who filed a joint
5 return for any taxable year has made an election
6 under this paragraph, the individual's liability for
7 any tax shown on the joint return shall not exceed
8 the individual's separate return amount and the
9 individual's liability for any deficiency assessed
10 for that taxable year shall not exceed the portion
11 of the deficiency properly allocable to the
12 individual. For purposes of this paragraph:
13 (i) An election properly made pursuant to
14 Section 6015 of the Internal Revenue Code shall
15 constitute an election under this paragraph,
16 provided that the election shall not be
17 effective until the individual has notified the
18 Department of the election in the form and
19 manner prescribed by the Department.
20 (ii) If no election has been made under
21 Section 6015, the individual may make an
22 election under this paragraph in the form and
23 manner prescribed by the Department, provided
24 that no election may be made if the Department
25 finds that assets were transferred between
26 individuals filing a joint return as part of a
27 scheme by such individuals to avoid payment of
28 Illinois income tax and the election shall not
29 eliminate the individual's liability for any
30 portion of a deficiency attributable to an
31 error on the return of which the individual had
32 actual knowledge as of the date of filing.
33 (iii) In determining the separate return
34 amount or portion of any deficiency
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1 attributable to an individual, the Department
2 shall follow the provisions in Section 6015(b)
3 and (c) of the Internal Revenue Code.
4 (iv) In determining the validity of an
5 individual's election under subparagraph (ii)
6 and in determining an electing individual's
7 separate return amount or portion of any
8 deficiency under subparagraph (iii), any
9 determination made by the Secretary of the
10 Treasury under Section 6015(a) of the Internal
11 Revenue Code regarding criteria for eligibility
12 or under Section 6015(b) or (c) of the Internal
13 Revenue Code regarding the allocation of any
14 item of income, deduction, payment, or credit
15 between an individual making the federal
16 election and that individual's spouse shall be
17 conclusively presumed to be correct. With
18 respect to any item that is not the subject of
19 a determination by the Secretary of the
20 Treasury, in any proceeding involving this
21 subsection, the individual making the election
22 shall have the burden of proof with respect to
23 any item except that the Department shall have
24 the burden of proof with respect to items in
25 subdivision (ii).
26 (v) Any election made by an individual
27 under this subsection shall apply to all years
28 for which that individual and the spouse named
29 in the election have filed a joint return.
30 (vi) After receiving a notice that the
31 federal election has been made or after
32 receiving an election under subdivision (ii),
33 the Department shall take no collection action
34 against the electing individual for any
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1 liability arising from a joint return covered
2 by the election until the Department has
3 notified the electing individual in writing
4 that the election is invalid or of the portion
5 of the liability the Department has allocated
6 to the electing individual. Within 60 days
7 (150 days if the individual is outside the
8 United States) after the issuance of such
9 notification, the individual may file a written
10 protest of the denial of the election or of the
11 Department's determination of the liability
12 allocated to him or her and shall be granted a
13 hearing within the Department under the
14 provisions of Section 908. If a protest is
15 filed, the Department shall take no collection
16 action against the electing individual until
17 the decision regarding the protest has become
18 final under subsection (d) of Section 908 or,
19 if administrative review of the Department's
20 decision is requested under Section 1201, until
21 the decision of the court becomes final.
22 (d) Partnerships. Every partnership having any base
23 income allocable to this State in accordance with section
24 305(c) shall retain information concerning all items of
25 income, gain, loss and deduction; the names and addresses of
26 all of the partners, or names and addresses of members of a
27 limited liability company, or other persons who would be
28 entitled to share in the base income of the partnership if
29 distributed; the amount of the distributive share of each;
30 and such other pertinent information as the Department may by
31 forms or regulations prescribe. The partnership shall make
32 that information available to the Department when requested
33 by the Department.
34 (e) For taxable years ending on or after December 31,
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1 1985, and before December 31, 1993, taxpayers that are
2 corporations (other than Subchapter S corporations) having
3 the same taxable year and that are members of the same
4 unitary business group may elect to be treated as one
5 taxpayer for purposes of any original return, amended return
6 which includes the same taxpayers of the unitary group which
7 joined in the election to file the original return,
8 extension, claim for refund, assessment, collection and
9 payment and determination of the group's tax liability under
10 this Act. This subsection (e) does not permit the election to
11 be made for some, but not all, of the purposes enumerated
12 above. For taxable years ending on or after December 31,
13 1987, corporate members (other than Subchapter S
14 corporations) of the same unitary business group making this
15 subsection (e) election are not required to have the same
16 taxable year.
17 For taxable years ending on or after December 31, 1993,
18 taxpayers that are corporations (other than Subchapter S
19 corporations) and that are members of the same unitary
20 business group shall be treated as one taxpayer for purposes
21 of any original return, amended return which includes the
22 same taxpayers of the unitary group which joined in filing
23 the original return, extension, claim for refund, assessment,
24 collection and payment and determination of the group's tax
25 liability under this Act.
26 (f) The Department may promulgate regulations to permit
27 nonresident individual partners of the same partnership,
28 nonresident Subchapter S corporation shareholders of the same
29 Subchapter S corporation, and nonresident individuals
30 transacting an insurance business in Illinois under a Lloyds
31 plan of operation, and nonresident individual members of the
32 same limited liability company that is treated as a
33 partnership under Section 1501 (a)(16) of this Act, to file
34 composite individual income tax returns reflecting the
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1 composite income of such individuals allocable to Illinois
2 and to make composite individual income tax payments. The
3 Department may by regulation also permit such composite
4 returns to include the income tax owed by Illinois residents
5 attributable to their income from partnerships, Subchapter S
6 corporations, insurance businesses organized under a Lloyds
7 plan of operation, or limited liability companies that are
8 treated as partnership under Section 1501 (a)(16) of this
9 Act, in which case such Illinois residents will be permitted
10 to claim credits on their individual returns for their shares
11 of the composite tax payments. This paragraph of subsection
12 (f) applies to taxable years ending on or after December 31,
13 1987.
14 For taxable years ending on or after December 31, 1999,
15 the Department may, by regulation, also permit any persons
16 transacting an insurance business organized under a Lloyds
17 plan of operation to file composite returns reflecting the
18 income of such persons allocable to Illinois and the tax
19 rates applicable to such persons under Section 201 and to
20 make composite tax payments and shall, by regulation, also
21 provide that the income and apportionment factors
22 attributable to the transaction of an insurance business
23 organized under a Lloyds plan of operation by any person
24 joining in the filing of a composite return shall, for
25 purposes of allocating and apportioning income under Article
26 3 of this Act and computing net income under Section 202 of
27 this Act, be excluded from any other income and apportionment
28 factors of that person or of any unitary business group, as
29 defined in subdivision (a)(27) of Section 1501, to which that
30 person may belong.
31 (g) The Department may adopt rules to authorize the
32 electronic filing of any return required to be filed under
33 this Section.
34 (Source: P.A. 90-613, eff. 7-9-98; 91-541, eff. 8-13-99.)";
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1 and
2 on page 67, by deleting lines 31 and 32, by deleting all of
3 pages 68 through 145, and on page 146, by deleting lines 1
4 through 15.