2023 Indiana Code › Title 6. Taxation › Article 3. State Income Taxes › Chapter 4.5. Partnership Audit and Administrative Adjustments › 6-3-4.5-1. Definitions

Note: This version of section amended by P.L.1-2023, SEC.11, effective 1-1-2022. See also following version of this section amended by P.L.201-2023, SEC.97, effective 1-1-2024.
Sec. 1. The following definitions apply throughout this chapter:
(1) "Adjustment year" means the partnership taxable year described in Section 6225(d)(2) of the Internal Revenue Code.
(2) "Administrative adjustment request" means an administrative adjustment request filed by a partnership under Section 6227 of the Internal Revenue Code.
(3) "Affected year" means any taxable year for a taxpayer that is affected by an adjustment under this chapter, regardless of whether the partnership has received an adjustment for that taxable year.
(4) "Audited partnership" means a partnership subject to a partnership level audit resulting in a federal adjustment.
(5) "Corporate partner" means a partner that is subject to the state adjusted gross income tax under IC 6-3-2-1(c) or the financial institutions tax under IC 6-5.5-2-1. In the case of a partner that is a corporation described in IC 6-3-2-2.8(2) that also is subject to tax under IC 6-3-2-1(c), the corporation is a corporate partner only to the extent that its income is subject to tax under IC 6-3-2-1(c).
(6) "Direct partner" means a partner that holds an interest directly in a partnership or pass through entity.
(7) "Exempt partner" means a partner that is exempt from the adjusted gross income tax under IC 6-3-2-2.8(1) or the financial institutions tax under IC 6-5.5-2-7(4), except to the extent of unrelated business taxable income.
(8) "Federal adjustment" means a change to an item or amount determined under the Internal Revenue Code or a change to any other tax attribute that is used by a taxpayer to compute state adjusted gross income taxes or financial institutions tax owed, whether that change results from action by the Internal Revenue Service, including a partnership level audit, or the filing of an amended federal return, a federal refund claim, or an administrative adjustment request by the taxpayer. A federal adjustment is positive to the extent that it increases state adjusted gross income as determined under IC 6-3 or IC 6-5.5 and is negative to the extent that it decreases state adjusted gross income as determined under IC 6-3 or IC 6-5.5.
(9) "Federal adjustment reports" includes methods or forms required by the department for use by a taxpayer to report final federal adjustments for purposes of this chapter, including an amended Indiana tax return, information return, or uniform multistate report.
(10) "Federal partnership representative" means a person the partnership designates for the taxable year as the partnership's representative, or the person the Internal Revenue Service has appointed to act as the federal partnership representative, pursuant to Section 6223(a) of the Internal Revenue Code.
(11) "Final determination date" means the following:
(A) Except as provided in clause (B) or (C), if the federal adjustment arises from an Internal Revenue Service audit or other action by the Internal Revenue Service, the final determination date is the date on which the federal adjustment is a final determination under IC 6-3-4-6(d).
(B) For federal adjustments arising from an Internal Revenue Service audit or other action by the Internal Revenue Service, if the taxpayer filed as a member of a consolidated tax return filed under IC 6-3-4-14, a combined return filed under IC 6-3-2-2 or IC 6-5.5-5-1, or a return combined by the department under IC 6-3-2-2(p), the final determination date means the first date on which no related federal adjustments arising from that audit remain to be finally determined, as described in clause (A), for the entire group.
(C) If the federal adjustment results from filing an amended federal return, a federal refund claim, or an administrative adjustment request, the final determination date means the day on which the amended return, refund claim, administrative adjustment request, or other similar report was filed.
(12) "Final federal adjustment" means a federal adjustment after the final determination date for that federal adjustment has passed.
(13) "Indirect partner" means a partner in a partnership or pass through entity that itself holds an interest directly, or through another indirect partner, in a partnership or pass through entity.
(14) "Internal Revenue Code" has the meaning set forth in IC 6-3-1-11.
(15) "Nonresident partner" has the meaning provided in IC 6-3-4-12(n).
(16) "Partner" means a person or entity that holds an interest directly or indirectly in a partnership or other pass through entity.
(17) "Partner level adjustments report" means a report provided by a partnership to its partners as a result of a department action with regard to the partnership. A partner level adjustments report does not include an amended statement provided by a partnership or other entity as a result of an adjustment reported by the partnership.
(18) "Partnership" has the meaning set forth in IC 6-3-1-19.
(19) "Partnership level audit" means an examination by the Internal Revenue Service at the partnership level under Sections 6221 through 6241 of the Internal Revenue Code, as enacted by the Bipartisan Budget Act of 2015, Public Law 114-74, which results in federal adjustments.
(20) "Partnership return" means a return required to be filed by a partnership pursuant to IC 6-3-4-10. In the case of a partnership that is required to withhold tax or file a composite return pursuant to IC 6-3-4-12 or IC 6-5.5-2-8, the term also includes the returns or schedules required for tax withholding or composite filing. In the case of a partnership that is an electing entity under IC 6-3-2.1, the term also includes the returns or schedules required for the pass through entity tax under IC 6-3-2.1.
(21) "Pass through entity" means an entity defined in IC 6-3-1-35, other than a partnership, that:
(A) is not subject to tax except as provided in IC 6-3-2-2.8(2), in the case of a corporation described in IC 6-3-2-2.8(2); or
(B) is not subject to tax except on its undistributed taxable income, in the case of an estate or a trust.
(22) "Reallocation adjustment" means a federal adjustment resulting from a partnership level audit or an administrative adjustment request that changes the shares of one (1) or more items of partnership income, gain, loss, expense, or credit allocated to direct partners. A positive reallocation adjustment means the portion of a reallocation adjustment that would increase federal adjusted gross income or federal taxable income for one (1) or more direct partners, and a negative reallocation adjustment means the portion of a reallocation adjustment that would decrease federal adjusted gross income or federal taxable income for one (1) or more direct partners, according to Section 6225 of the Internal Revenue Code and the regulations under that section.
(23) "Resident partner" means a partner that is not a nonresident partner.
(24) "Review year" means the taxable year of a partnership that is subject to a partnership level audit, an administrative adjustment request, or an amended federal return that results in federal adjustments, regardless of whether any federal tax determined to be due is the responsibility of the partnership or partners.
(25) "Statement" means a form or schedule prescribed by the department through which a partnership or pass through entity reports tax attributes to its owners or beneficiaries.
(26) "Tax attribute" means any item of income, deduction, credit, receipts for apportionment, or other amount or status that determines a partner's liability under IC 6-3, IC 6-3.6, or IC 6-5.5.
(27) "Taxable year" means, in the case of a partnership, the year or partial year for which a partnership files a return for state and federal purposes and, in the case of a partner, the taxable year in which the partner reports tax attributes from the partnership.
(28) "Taxpayer" has the meaning set forth in IC 6-3-1-15 (in the case of the adjusted gross income tax) and IC 6-5.5-1-17 (in the case of the financial institutions tax) and, unless the context clearly indicates otherwise, includes a partnership subject to a partnership level audit or a partnership that has made an administrative adjustment request, as well as a tiered partner of that partnership.
(29) "Tiered partner" means any partner that is a partnership or pass through entity.
(30) "Unrelated business taxable income" has the meaning set forth in Section 512 of the Internal Revenue Code.
As added by P.L.159-2021, SEC.18. Amended by P.L.137-2022, SEC.41; P.L.138-2022, SEC.6; P.L.178-2022(ts), SEC.7; P.L.1-2023, SEC.11.