Wisconsin Administrative Code › Department of Revenue › Chapter Tax 2 - Income Taxation, Returns, Records And Gross Income › Section Tax 2.67 - Combined returns

Current through June 24, 2024
(1) SCOPE. This section provides rules
			 relating to the filing of combined returns by corporations required to use
			 combined reporting under s.
			 71.255, Stats. This section
			 explains the filing requirements for combined returns, provides rules relating
			 to defining the taxable year included in a combined return, and describes how
			 interest, penalties, and statutes of limitations apply to combined
			 returns.
(2) FILING REQUIREMENTS
			 FOR COMBINED RETURNS.
(a)
General.
The designated agent of a combined group shall file a
			 combined return on behalf of the group. For each combined group member included
			 in the combined return, the combined return satisfies the member's requirement
			 for filing returns under ss.
			 71.24(1) or
			 (1m) or
			 71.44(1) or
			 (1m), Stats., as applicable. The combined
			 return shall be filed by the date provided in ss.
			 71.24(1), (1m), and
			 (7) or
			 71.44(1), (1m), and
			 (3), Stats., as applicable.
(b)
Electronic filing.
All
			 combined returns shall be filed electronically. The secretary of revenue may
			 waive the requirement to file a combined return electronically when the
			 secretary determines that the requirement causes an undue hardship, if the
			 person requests the waiver in writing and clearly indicates why the requirement
			 causes an undue hardship. In determining whether the electronic filing
			 requirement causes an undue hardship, the secretary of revenue may consider the
			 following factors:
1. Unusual circumstances
			 that may prevent the person from filing electronically.
Example:
The person does not have access to a
				computer that is connected to the Internet.
2. Any other factor that the secretary
			 determines is pertinent.
Note:
Written requests should be e-mailed to
				DORWaiverRequest@wisconsin.gov, faxed to (608) 267-1030, or addressed to
				Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, P.O.
				Box 8949, Madison, WI 53708-8949.
Note:
Forms not filed electronically may be
				delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison,
				Wisconsin or mailed to the address specified on the form or in the
				instructions.
(c)
Components of combined return.
A combined return shall include
			 the following items, and shall be considered incomplete if any of these items
			 are excluded:
1. One Wisconsin Form 6, Income
			 or Franchise Tax Return, for the combined group as a whole.
4. If the combined group is using
			 apportionment, one of the following forms, per member as applicable:
a. Schedule A-01, Wisconsin Single Sales
			 Factor Apportionment Data for Nonspecialized Industries.
b. Schedule A-02, Wisconsin Apportionment
			 Percentage for Interstate Financial Institutions.
c. Schedule A-03, Wisconsin Apportionment
			 Percentage for Interstate Motor Carriers.
d. Schedule A-04, Wisconsin Apportionment
			 Percentage for Interstate Telecommunications Companies.
e. Schedule A-05, Wisconsin Premium Factor
			 for Insurance Companies.
f.
			 Schedule A-06, Wisconsin Receipts Factor for Interstate Brokers-Dealers,
			 Investment Advisors, Investment Companies, and Underwriters.
g. Schedule A-07, Wisconsin Apportionment
			 Percentage for Interstate Air Carriers.
h. Schedule A-08, Wisconsin Apportionment
			 Percentage for Broadcasters.
i.
			 Schedule A-09, Wisconsin Apportionment Percentage for Interstate
			 Railroads.
j. Schedule A-10,
			 Wisconsin Apportionment Percentage for Interstate Pipeline Companies.
k. Schedule A-11, Wisconsin Apportionment
			 Percentage for Interstate Air Freight Forwarders Affiliated with a Direct Air
			 Carrier.
5. Any other
			 required supporting forms and schedules listed in s. Tax 2.03, as applicable.
			 Unless stated otherwise in the instructions, supporting forms and schedules
			 shall be prepared separately for each combined group member.
6. A copy of the complete federal return for
			 each combined group member, including all supporting schedules and any amended
			 returns, for the member's taxable year included in the combined return. For
			 combined group members that also file in a federal consolidated return, any of
			 the following alternatives shall be considered to satisfy this requirement:
a. A copy of the federal consolidated return,
			 including all supporting forms, schedules, and statements for each corporation
			 included in the consolidated return, as submitted to the internal revenue
			 service.
b. Pro forma federal
			 returns prepared separately for each combined group member, including all
			 supporting forms and schedules prepared separately for each combined group
			 member.
c. A spreadsheet showing
			 the line-by-line computation of taxable income of each combined group member
			 included in the federal consolidated return, including consolidating
			 adjustments, plus the supporting forms, schedules, and statements filed with
			 the internal revenue service pertaining to each member. The supporting
			 statements shall include balance sheets as of the beginning and end of the tax
			 year, a reconciliation of income per books with income per return, and a
			 reconciliation of retained earnings, to the extent the member was required to
			 submit these items to the internal revenue service.
7. For combined groups that also file in a
			 federal consolidated return, a copy of federal Form 851, Affiliations
			 Schedule.
(d)
Separate entity items.
1.
			 Subject to the provisions of s. Tax 2.65 (3) (b), if any combined group member
			 has separate entity items, the designated agent shall include those separate
			 entity items in the combined return. If a corporation that would otherwise be a
			 combined group member has no items that are subject to combination under the
			 water's edge rules of s. Tax 2.61 (4), the designated agent may include that
			 corporation's separate entity items in the combined return, in which case the
			 combined return shall include the items specified in sub. (2) (c) 5. and 6. and
			 subd. 3. for that corporation as if it is a combined group member.
			 Alternatively, the corporation may file a separate Wisconsin return to report
			 those items.
2. The joint and
			 several liability provisions of s. Tax 2.65 (3) (f) do not apply to any tax,
			 interest, or penalty attributable to separate entity items. Although the
			 department may send correspondence, notices, refunds, assessments, or other
			 documents relating to any combined group member's separate entity items to the
			 designated agent, and the designated agent may choose to pay any tax, interest,
			 or penalty on behalf of a combined group member, the tax, interest, or penalty
			 attributable to separate entity items is ultimately the responsibility of the
			 combined group member or members to which the separate entity items are
			 attributable.
3. The separate
			 entity net income or loss and apportionment factors included in the combined
			 return shall be reported on Wisconsin Form N, Nonapportionable and Separately
			 Apportioned Income. The designated agent shall complete and submit Form N with
			 the combined return for each applicable corporation and carry forward the total
			 Form N amounts to the appropriate line on Form 6. For purposes of the
			 requirement of s. 71.255(2) (d),
			 Stats., separate entity items reported on Form N shall be considered filed on a
			 separate return. However, for purposes of determining a combined group member's
			 net income, tax, interest, underpayment interest, economic development
			 surcharge, and the statute of limitations, the separate entity amounts shall be
			 added to its amounts, if any, computed in the unitary combination.
4. If a corporation is a member of more than
			 one combined group at the same time, the corporation shall include its separate
			 entity items, if any, in the combined return of only one
			 group.
(e)
Amended returns.
If a corporation erroneously fails to join in
			 the filing of a combined return, the designated agent shall file an amended
			 combined return adding the corporation and, if a separate return was filed by
			 the corporation, the corporation shall file an amended separate return showing
			 no net income, overpayment, or underpayment, and stating that the corporation
			 has joined in the filing of a combined return and identifying the designated
			 agent of the combined group in which the corporation has been
			 included.