99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3955

 

Introduced , by Rep. Joe Sosnowski

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/911  from Ch. 120, par. 9-911

    Amends the Illinois Income Tax Act. Extends the statute of limitations for claims for refunds from 3 years to 5 years. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 911 as follows:
 
6    (35 ILCS 5/911)  (from Ch. 120, par. 9-911)
7    Sec. 911. Limitations on claims for refund.
8    (a) In general. Except as otherwise provided in this Act:
9        (1) A claim for refund shall be filed not later than 5
10    3 years after the date the return was filed (in the case of
11    returns required under Article 7 of this Act respecting any
12    amounts withheld as tax, not later than 5 3 years after the
13    15th day of the 4th month following the close of the
14    calendar year in which such withholding was made), or one
15    year after the date the tax was paid, whichever is the
16    later; and
17        (2) No credit or refund shall be allowed or made with
18    respect to the year for which the claim was filed unless
19    such claim is filed within such period.
20    (b) Federal changes.
21        (1) In general. In any case where notification of an
22    alteration is required by Section 506(b), a claim for
23    refund may be filed within 2 years after the date on which

 

 

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1    such notification was due (regardless of whether such
2    notice was given), but the amount recoverable pursuant to a
3    claim filed under this Section shall be limited to the
4    amount of any overpayment resulting under this Act from
5    recomputation of the taxpayer's net income, net loss, or
6    Article 2 credits for the taxable year after giving effect
7    to the item or items reflected in the alteration required
8    to be reported.
9        (2) Tentative carryback adjustments paid before
10    January 1, 1974. If, as the result of the payment before
11    January 1, 1974 of a federal tentative carryback
12    adjustment, a notification of an alteration is required
13    under Section 506(b), a claim for refund may be filed at
14    any time before January 1, 1976, but the amount recoverable
15    pursuant to a claim filed under this Section shall be
16    limited to the amount of any overpayment resulting under
17    this Act from recomputation of the taxpayer's base income
18    for the taxable year after giving effect to the federal
19    alteration resulting from the tentative carryback
20    adjustment irrespective of any limitation imposed in
21    paragraph (l) of this subsection.
22    (c) Extension by agreement. Where, before the expiration of
23the time prescribed in this section for the filing of a claim
24for refund, both the Department and the claimant shall have
25consented in writing to its filing after such time, such claim
26may be filed at any time prior to the expiration of the period

 

 

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1agreed upon. The period so agreed upon may be extended by
2subsequent agreements in writing made before the expiration of
3the period previously agreed upon. In the case of a taxpayer
4who is a partnership, Subchapter S corporation, or trust and
5who enters into an agreement with the Department pursuant to
6this subsection on or after January 1, 2003, a claim for refund
7may be filed by the partners, shareholders, or beneficiaries of
8the taxpayer at any time prior to the expiration of the period
9agreed upon. Any refund allowed pursuant to the claim, however,
10shall be limited to the amount of any overpayment of tax due
11under this Act that results from recomputation of items of
12income, deduction, credits, or other amounts of the taxpayer
13that are taken into account by the partner, shareholder, or
14beneficiary in computing its liability under this Act.
15    (d) Limit on amount of credit or refund.
16        (1) Limit where claim filed within 5-year 3-year
17    period. If the claim was filed by the claimant during the
18    5-year 3-year period prescribed in subsection (a), the
19    amount of the credit or refund shall not exceed the portion
20    of the tax paid within the period, immediately preceding
21    the filing of the claim, equal to 5 3 years plus the period
22    of any extension of time for filing the return.
23        (2) Limit where claim not filed within 5-year 3-year
24    period. If the claim was not filed within such 5-year
25    3-year period, the amount of the credit or refund shall not
26    exceed the portion of the tax paid during the one year

 

 

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1    immediately preceding the filing of the claim.
2    (e) Time return deemed filed. For purposes of this section
3a tax return filed before the last day prescribed by law for
4the filing of such return (including any extensions thereof)
5shall be deemed to have been filed on such last day.
6    (f) No claim for refund or credit based on the taxpayer's
7taking a credit for estimated tax payments as provided by
8Section 601(b)(2) or for any amount paid by a taxpayer pursuant
9to Section 602(a) or for any amount of credit for tax withheld
10pursuant to Article 7 may be filed unless a return was filed
11for the tax year not more than 5 3 years after the due date, as
12provided by Section 505, of the return which was required to be
13filed relative to the taxable year for which the payments were
14made or for which the tax was withheld. The changes in this
15subsection (f) made by this amendatory Act of 1987 shall apply
16to all taxable years ending on or after December 31, 1969.
17    (g) Special Period of Limitation with Respect to Net Loss
18Carrybacks. If the claim for refund relates to an overpayment
19attributable to a net loss carryback as provided by Section
20207, in lieu of the 5-year 3 year period of limitation
21prescribed in subsection (a), the period shall be that period
22which ends 5 3 years after the time prescribed by law for
23filing the return (including extensions thereof) for the
24taxable year of the net loss which results in such carryback
25(or, on and after August 13, 1999, with respect to a change in
26the carryover of an Article 2 credit to a taxable year

 

 

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1resulting from the carryback of a Section 207 loss incurred in
2a taxable year beginning on or after January 1, 2000, the
3period shall be that period that ends 5 3 years after the time
4prescribed by law for filing the return (including extensions
5of that time) for that subsequent taxable year), or the period
6prescribed in subsection (c) in respect of such taxable year,
7whichever expires later. In the case of such a claim, the
8amount of the refund may exceed the portion of the tax paid
9within the period provided in subsection (d) to the extent of
10the amount of the overpayment attributable to such carryback.
11On and after August 13, 1999, if the claim for refund relates
12to an overpayment attributable to the carryover of an Article 2
13credit, or of a Section 207 loss, earned, incurred (in a
14taxable year beginning on or after January 1, 2000), or used in
15a year for which a notification of a change affecting federal
16taxable income must be filed under subsection (b) of Section
17506, the claim may be filed within the period prescribed in
18paragraph (1) of subsection (b) in respect of the year for
19which the notification is required. In the case of such a
20claim, the amount of the refund may exceed the portion of the
21tax paid within the period provided in subsection (d) to the
22extent of the amount of the overpayment attributable to the
23recomputation of the taxpayer's Article 2 credits, or Section
24207 loss, earned, incurred, or used in the taxable year for
25which the notification is given.
26    (h) Claim for refund based on net loss. On and after August

 

 

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123, 2002, no claim for refund shall be allowed to the extent
2the refund is the result of an amount of net loss incurred in
3any taxable year ending prior to December 31, 2002 under
4Section 207 of this Act that was not reported to the Department
5within 5 3 years of the due date (including extensions) of the
6return for the loss year on either the original return filed by
7the taxpayer or on amended return or to the extent that the
8refund is the result of an amount of net loss incurred in any
9taxable year under Section 207 for which no return was filed
10within 5 3 years of the due date (including extensions) of the
11return for the loss year.
12    (i) Periods of limitation suspended while taxpayer is
13unable to manage financial affairs due to disability. In the
14case of an individual, the running of the periods specified in
15this Section shall be suspended during any period when that
16individual is financially disabled.
17    For purposes of this subsection (i), an individual is
18financially disabled if that individual is unable to manage his
19or her financial affairs by reason of a medically determinable
20physical or mental impairment of the individual that can be
21expected to result in death, or which has lasted or can be
22expected to last for a continuous period of not less than 12
23months.
24    An individual shall not be treated as financially disabled
25during any period when that individual's spouse or any other
26person is authorized to act on behalf of that individual with

 

 

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1respect to financial matters.
2(Source: P.A. 97-507, eff. 8-23-11; 98-970, eff. 8-15-14.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.