Iowa Administrative Code › Agency 701 - Revenue Department › Title VI - Corporation Income Tax › Chapter 502 - Determination of Net Income › Rule 701-502.15 - Consolidated Returns

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Definition.
The term "common parent" as used in these rules
				shall have the same general meaning as when used in the federal income tax
				regulation. However, where the common parent is not subject to the Iowa income
				tax because of the provisions of 701-subrule 52.1(1) or because of specific
				exemption under Iowa Code section
				422.34, the common parent shall
				designate as the agent for the affiliated group, one of its subsidiaries
				subject to the Iowa income tax and shall notify the director of the same in
				writing. Where the common parent has designated one of its subsidiaries to act
				as agent for the affiliated group, reference in this rule to "common parent"
				shall mean the designated agent.
Unless otherwise distinctly expressed, the terms used in this
				  rule shall have the same meaning as when used in a comparable context in the
				  federal income tax regulations for consolidated returns except for determining
				  whether an affiliated group had exercised its privilege of filing a
				  consolidated return. All references to the "commissioner" or "district
				  director" in the federal regulations shall be construed to mean the director
				  for purposes of the Iowa rules.
a. An
				affiliated group of corporations which did not file a consolidated return for
				the immediately preceding taxable year may file a consolidated return in lieu
				of separate returns for the taxable year. Each corporation which is subject to
				the Iowa corporation income tax and has been a member during any part of the
				taxable year for which the consolidated return is to be filed must consent (as
				provided in paragraph 53.15(1)
"d"
) to the filing of the
				consolidated return.
b. If a group
				wishes to exercise its privilege of filing a consolidated return, the
				consolidated return must be filed not later than the date prescribed by Iowa
				Code section 422.21 (including extensions of
				time) for the filing of the common parent's return. The consolidated return may
				not be withdrawn after the last day for filing (including extensions of time)
				but the group may change the basis of its return at any time prior to the last
				day.
c. The consolidated return
				shall be made on Form IA-1120 for the group by the common parent corporation.
				The common parent corporation of the group must attach a copy of the federal
				Form 851 (Affiliations Schedule) to the consolidated return.
d. If a group wishes to exercise its
				privilege of filing a consolidated return, each subsidiary must consent to the
				filing of the consolidated return for the year. The subsidiaries must consent
				to the filing of an Iowa consolidated return by joining in the filing of an
				Iowa consolidated return on or before the due date (including any extensions of
				time). If both separate and consolidated returns are filed on or before the due
				date (including any extensions of time), the latest returns filed will be
				considered as the taxpayers' election in regards to the filing of separate or
				consolidated returns.
e. The common
				parent, for all purposes other than the making of the consent required by
				subrule 53.15(1)
"a,"
shall be the sole agent for each
				subsidiary in the group, duly authorized to act in its own name in all matters
				relating to the tax liability for the consolidated return year. No subsidiary
				shall have authority to act for or to represent itself in any matter. The
				provisions of this paragraph shall apply whether or not a consolidated return
				is made for any subsequent year and whether or not one or more subsidiaries
				have become or have ceased to be members of the group at any time. If a
				subsidiary has ceased to be a member of the group and if the subsidiary files
				written notice of the cessation with the director, then upon request of the
				subsidiary, the director will furnish it with a copy of any notice of
				deficiency in respect of the tax for a consolidated return year for which it
				was a member. The filing of the written notification and request by a
				corporation shall not have the effect of limiting the scope of the agency of
				the common parent.
f. Unless the
				director agrees to the contrary, an agreement entered into by the common parent
				extending the time within which a notice of deficiency may be issued, or a levy
				or a proceeding in court begun in respect of the tax for a consolidated return
				year shall be applicable to each corporation which was a member of the group
				during any part of the taxable year and to each corporation, the income of
				which was included in the consolidated return for the taxable year,
				notwithstanding that the liability of the corporation is subsequently computed
				on the basis of a separate return under these rules.
g. If the common parent corporation
				contemplates dissolution, or is about to be dissolved, or if for any other
				reason its existence is about to terminate, it shall forthwith notify the
				director of that fact and designate another member to act as its agent in its
				place to the same extent and subject to the same conditions and limitations as
				are applicable to the common parent. If this notice is not given by the common
				parent, the remaining members may, subject to the approval of the director,
				designate another member to act as agent, and notice of the designation shall
				be given to the director. Until a notice in writing designating a new agent has
				been approved by the director, any notice of deficiency or other communications
				mailed to the common parent shall be considered as having been properly mailed
				to the agent of the group. If the director has reasons to believe that the
				existence of the common parent has terminated, the director may, if deemed
				advisable, deal directly with any member in respect of its liability.