Bill Text: IL HB3955 | 2015-2016 | 99th General Assembly | Introduced

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

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2015-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3955 Detail]

Download: Illinois-2015-HB3955-Introduced.html

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

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

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

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

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

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

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