Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart O - TIME AND PLACE FOR FILING RETURNS › Section 100.5030 - Taxpayer's Notification to the Department of Certain Federal Changes Arising in Federal Consolidated Return Years, and Arising in Certain Loss Carryback Years (IITA Section 506)

Current through Register Vol. 48, No. 28, July 12, 2024
a) In
				general. A corporation that is a member of an affiliated group filing a
				consolidated federal return for a particular taxable year must compute its
				separate federal taxable income equivalent for Illinois income tax purposes in
				accordance with IITA Section 203(e)(2)(E). Such a corporation must, however,
				also calculate its "separate taxable income" for purposes of the federal
				consolidated return and its supporting statements in accordance with Treasury
				Reg. Section 1.1502 -12. Such a calculation for federal purposes involves
				certain positive and negative modifications to what the corporation's federal
				taxable income would be were it not a member of an affiliated group filing a
				consolidated federal income tax return. Therefore, although the computation of
				"separate taxable income" under Treasury Reg. Section 1.1502-12 does not
				exactly equate with the computation of "federal taxable income" and IITA
				Section 203(e)(2)(E), it should nevertheless be possible to reconcile the
				"separate taxable income" of the consolidated return (as reflected on
				supporting statements to the consolidated return) with the "federal taxable
				income" of the pro forma U.S. 1120 required for Illinois purposes by reversing
				the positive and negative modifications of Treasury Reg. Section 1.1502-12 and
				by executing the mandated elections of IITA Section 203(e)(2)(E). Consequently,
				if the federal consolidated return of an affiliated group is later adjusted for
				federal purposes with the meaning of Section 403(b) of the Act, and if the
				federal adjustment alters the computation of "separate taxable income" of any
				member under Treasury Reg. Section 1.1502-12, then such an adjustment shall
				require notification to the Illinois Department of Revenue pursuant to IITA
				Section 506(b) to the extent such adjustment enters into the computation of
				such taxpayer's base income under the Act.
b) Certain adjustments in loss carryback
				years. In certain limited instances, it is possible that a member of an
				affiliated group will have a pro forma federal change for Illinois purposes to
				its federal taxable income of a prior year (as reported to Illinois under
				whatever paragraph of IITA Section 203(e) applied in the prior year). This
				would result from the pro forma federal carryback of a net operating loss or
				capital loss for Illinois purposes which was not identically carried back for
				federal purposes by reason of the fact that it originated in a year (under IITA
				Section 203(e)(2)(E), carryback of net operating losses on a separate return
				basis by members of affiliated groups is allowed for Illinois purposes only
				from loss years ending before September 12, 1977 and ending from November 7,
				1978 to December 30, 1980) for which the corporation participated in the filing
				of a consolidated return and in which consolidated return year the loss was
				partly or wholly absorbed for federal purposes by income of other members of
				the affiliated group. In such instances, any claim for refund of Illinois
				income tax must be filed not later than 3 years and 20 days after the last day
				of the taxable year in which the loss occurred which generated the pro forma
				change, or two years and 20 days from the date the amount of loss as reflected
				on the consolidated return and supporting statements of the loss year is
				finally determined for federal purposes (within the meaning of IITA Section
				403(b)) whichever is later.