Did Illinois's three-year deficiency period run from an early-filed partnership return's original due date when the partnership never requested an extension?

Plain-English summary

The deficiency notice was timely because Illinois counted the automatic extension when determining the return's deemed filing date. The partnership filed its 2009 return before the original due date and did not request an extension. It argued that the three-year period began at the original deadline.

Section 905(h) deemed an early return filed on the last day prescribed by law, including extensions. Regulation 100.5020(b) automatically granted partnerships six additional months without requiring an application. Regulation 100.9320(h) confirmed that the last prescribed day included automatic extensions.

For the calendar-year 2009 partnership return, the GIL said a notice issued before October 15, 2013 was timely. IDOR understood that a notice had been issued before that date.

What this means for you

Do not calculate an Illinois assessment deadline from the actual early-filing date or assume an extension counts only when requested. Identify every automatic extension built into the applicable rule.

Common questions

Q: Did early filing start the three-year clock immediately?
A: No.

Q: Did the partnership need to request the six-month extension?
A: No. The regulation granted it automatically.

Q: What date did the GIL identify as the deadline?
A: October 15, 2013 for the described 2009 calendar-year partnership return.

Citations and references

• 35 ILCS 5/905(a), (h) — deficiency-notice period and deemed filing date
• 86 Ill. Adm. Code 100.5020(b) — automatic extension
• 86 Ill. Adm. Code 100.9320(h) — last prescribed filing day includes automatic extensions

Subject

Deficiencies

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2013.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2013/it-13-0011.pdf

Original ruling text

IT 13-0011 GIL 10/21/2013 Deficiencies
In the case of a return filed before the due date for filing, a notice of deficiency may be issued at any
time prior to the date that is 3 years after the due date for filing, taking into account the automatic
extension granted to all taxpayers under 86 Ill. Adm. Code Section 100.5020(b).

October 21, 2013
Re:

COMPANY A
2009 Illinois Replacement Tax Return

Dear Xxxxx:
This is in response to your letter dated September 11, 2013, in which you request a letter ruling. The
nature of your request and the information you have provided require that we respond with a General
Information Letter, which is designed to provide general information, is not a statement of Department
policy and is not binding on the Department. See 86 Ill. Adm. Code 1200.120(b) and (c), which may
be found on the Department's web site at www. tax.illinois.gov.
In your letter you have stated the following:
After discussing the attached proposed assessment with Revenue Agent Xxxx Xxxx,
they suggested we write the Legal Department after they conferred with their boss.
Here is the issue. COMPANY A (XX-XXXXXXX) filed their 2009 partnership return prior
to the due date of 4-15-XX. No extension was requested. The statute of limitations for
this year should have expired on 4-15-XX. Your notice was sent 8-26-XX. Please refer
to Illinois Code Sec. 905(h)
Secondly, Code Sec. 905(a)(2) states that no deficiency shall be assessed or collected
with respect to the year for which the return was filed unless such notice is issued within
such period. The period being three years from the date of filing or if extended three
years from the extended due date (9-15-13). No deficiency has been assessed and we
are past both dates.
We ask that the proposed notice of tax due be withdrawn.
Response
Section 905(a) of the Illinois Income Tax Act (35 ILCS 5/905) provides:
Except as otherwise provided in this Act:
(1) A notice of deficiency shall be issued not later than 3 years after the date the
return was filed, and
(2) No deficiency shall be assessed or collected with respect to the year for
which the return was filed unless such notice is issued within such period.
Section 905(h) of the Illinois Income Tax Act provides:

For purposes of this Section a tax return filed before the last day prescribed by law
(including any extension thereof) shall be deemed to have been filed on such last day.
86 Ill. Adm. Code Section 100.5020(b) provides:
The Department will grant an automatic extension of 6 months (7 months for
corporations) to file any Illinois income tax return except returns due under Article 7 of
the IITA. No application form need be filed by a taxpayer to obtain this extension. If a
balance of tentative tax is due, the taxpayer should transmit the payment with the
appropriate form by the original filing due date in order to avoid the penalty for
underpayment of tax (IITA Section 1005) and statutory interest (IITA Section 1003).
86 Ill. Adm. Code Section 100.9320(h) provides:
For purposes of this section, a return filed before the last day prescribed by law
(including any extensions of time for filing) shall be deemed to have been filed on such
last day. The last day prescribed for filing returns shall include any automatic extensions
of time for filing.
Under these provisions, a notice of deficiency issued prior to October 15, 2013, would be timely for a
2009 calendar year partnership. It is my understanding that a notice of deficiency was issued prior to
that date, and the deficiency shown in that notice may be assessed and collected.
As stated above, this is a general information letter which does not constitute a statement of policy
that applies, interprets or prescribes the tax laws, and it is not binding on the Department. If you are
not under audit and you wish to obtain a binding Private Letter Ruling regarding your factual situation,
please submit all of the information set out in items 1 through 8 of Section 1200.110(b). If you have
any further questions, you may contact me at (217) 782-7055.
Sincerely,

Paul S. Caselton
Deputy General Counsel – Income Tax