Illinois Compiled Statutes
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REVENUE35 ILCS 5/Art. 4
(35 ILCS 5/) Illinois Income Tax Act.
(35 ILCS 5/Art. 4 heading)
35 ILCS 5/401
(35 ILCS 5/401)
(from Ch. 120, par. 4-401)
(a) In general. For purposes of the tax imposed by this Act, the
taxable year of a person shall be the same as the taxable year of such
person for federal income tax purposes. The taxable year of any person
required to file a return under this Act but not under the Internal Revenue
Code shall be his annual accounting period if it is a fiscal or calendar
year, and in all other cases shall be the calendar year.
(b) Change in taxable year. If the taxable year of a person is
changed for federal income tax purposes, the taxable year of such person
for purposes of the tax imposed by this Act shall be similarly changed. In
the case of a taxable year for a period of less than 12 months, the
standard exemption allowed under section 204 shall be prorated on the
basis of the number of days in such year to 365.
(c) Termination of taxable year for jeopardy. Notwithstanding the
provisions of subsections (a) and (b), if the Department terminates the
taxable year of a taxpayer under section 1102 (relating to tax in
jeopardy), the tax shall be computed for the period determined by such
(Source: P.A. 76-261
35 ILCS 5/402
(35 ILCS 5/402)
(from Ch. 120, par. 4-402)
Methods of Accounting.
(a) Same as federal. For purposes of the tax imposed by this Act, a
person's method of accounting shall be the same as such person's method of
accounting for federal income tax purposes. If no method of accounting has
been regularly used by such person, base and net income for purposes of
this Act shall be computed under such method as in the opinion of the
Department fairly reflects income.
(b) Change of accounting method. If a person's method of accounting
is changed for federal income tax purposes, for purposes of this Act it
shall be similarly changed.
(Source: P.A. 76-261
35 ILCS 5/403
(35 ILCS 5/403)
(from Ch. 120, par. 4-403)
Effect of Determination for Federal Purposes.
(a) Reporting. To the extent not inconsistent with the
provisions of this Act or forms or regulations prescribed by the
Department, each person making a return under this Act shall take into
account the items of income, deduction and exclusion on such return in
the same manner and amounts as reflected in such person's federal income
tax return for the same taxable year.
(b) Adjustment. A final determination pursuant to the Internal
Revenue Code adjusting any item or items of income, deduction or
exclusion for any taxable year shall be correct for purposes
of this Act to the extent such item or items enter into the
determination of base income.
(c) Identification of differences. To the extent required by
forms or regulations prescribed by the Department, any person making a
return under this Act may be required to indicate the item or items of
income, deduction and exclusion which would enter into the determination
of base income if this Act were amended to incorporate the Internal
Revenue Code as amended and in effect for such taxable year.
(Source: P.A. 81-1405.)
35 ILCS 5/404
(35 ILCS 5/404)
(from Ch. 120, par. 4-404)
Reallocation of Items.
(a) If it appears to the Director that any agreement, understanding or
arrangement exists between any persons which causes any person's base
income allocable to this State to be improperly or inaccurately reflected,
the Director may adjust such items of income and deduction, and any factor
taken into account in allocating income to this State, to such extent as
may reasonably be required to determine the base income of such person
properly allocable to this State.
(b) The Director may not make an adjustment to base income under this Section that has the same effect as retroactively applying any amendments to this Act made by Public Act 93-0840, Public Act 95-0233, or Public Act 95-0707.
(Source: P.A. 95-948, eff. 8-29-08.)
35 ILCS 5/405
(35 ILCS 5/405)
Carryovers in certain acquisitions.
(a) In the case of the acquisition of assets of a corporation by another
corporation described in Section 381(a) of the Internal Revenue Code, the
acquiring corporation shall succeed to and take into account, as of the close
of the day of distribution or transfer, all Article 2 credits and net losses
under Section 207 of the corporation from which the assets were
(b) In the case of the acquisition of assets of a partnership by another
partnership in a transaction in which the acquiring partnership is considered
to be a continuation of the partnership from which the assets were acquired
under the provisions of Section 708 of the Internal Revenue Code and any
regulations promulgated under that Section, the acquiring partnership shall
and take into account, as of the close of the day of distribution or transfer,
all Article 2 credits and net losses under Section 207 of the partnership from
which the assets were acquired.
(b-5) No limitation under Section 382 of the Internal Revenue Code or the
separate return limitation year regulations promulgated under Section 1502 of
the Internal Revenue Code shall apply to the carryover of any Article 2 credit
or net loss allowable under Section 207.
(c) The provisions of this amendatory Act of the 91st General Assembly shall
apply to all acquisitions occurring in taxable years ending on or after
December 31, 1986; provided that if a taxpayer's Illinois income tax liability
for any taxable year, as assessed under Section 903 prior to January 1, 1999,
was computed without taking into account all of the Article 2 credits and net
losses under Section 207 as allowed by this Section:
(1) no refund shall be payable to the taxpayer for
that taxable year as the result of allowing any portion of the Article 2 credits or net losses under Section 207 that were not taken into account in computing the tax assessed prior to January 1, 1999;
(2) any deficiency which has not been paid may be
reduced (but not below zero) by the allowance of some or all of the Article 2 credits or net losses under Section 207 that were not taken into account in computing the tax assessed prior to January 1, 1999; and
(3) in the case of any Article 2 credit or net loss
under Section 207 that, pursuant to this subsection (c), could not be taken into account either in computing the tax assessed prior to January 1, 1999 for a taxable year or in reducing a deficiency for that taxable year under paragraph (2) of subsection (c), the allowance of such credit or loss in any other taxable year shall not be denied on the grounds that such credit or loss should properly have been claimed in that taxable year under subsection (a) or (b).
(Source: P.A. 91-541, eff. 8-13-99; 91-913, eff. 1-1-01.)