When a corporation spins off a subsidiary in a tax-free IRC Section 368(a)(1)(D) reorganization, must it make the bonus-depreciation addition and subtraction modifications on the transferred assets for that tax year?

Subject

Addition Modifications – Other Rulings

Plain-English summary

The Illinois Department of Revenue ruled that when a corporation spins off a subsidiary through a tax-free federal corporate reorganization, it can't skip the bonus-depreciation "true-up" modifications that normally apply when property changes hands.

The taxpayer was a publicly traded utility-services holding company that ran two business lines: a competitive power generation and marketing business (run through a wholly-owned, disregarded-entity subsidiary) and a regulated electricity/gas distribution business. The company planned to spin off the competitive power business by first contributing its membership interest in the subsidiary to a newly formed corporation ("Controlled"), then distributing Controlled's shares to its own shareholders (the "Separation"). The IRS had already ruled that the Contribution followed by the Distribution would qualify as a tax-free reorganization under IRC Sections 355 and 368(a)(1)(D).

The wrinkle: because the subsidiary was a disregarded entity, the parent company had been claiming federal bonus depreciation on the subsidiary's assets and reporting the required Illinois addback (35 ILCS 5/203(b)(2)(E-10)) and the offsetting annual recovery subtraction (35 ILCS 5/203(b)(2)(T)) on those assets for years. Illinois law also has a matching pair of modifications that kick in when that same property is later "sold, transferred, abandoned, or otherwise disposed of" -- an addback of the subtraction modifications already taken (35 ILCS 5/203(b)(2)(E-11)) and an offsetting subtraction of the original addback (35 ILCS 5/203(b)(2)(U)). The taxpayer asked the Department to confirm it would have to apply (E-11) and (U) in the year of the Contribution/Distribution, even though the transaction is tax-free for federal purposes.

The Department agreed. Because Illinois's tax base starts from federal taxable income and generally follows federal treatment of transactions (35 ILCS 5/203(e)(1), 401, 402, 403), a corporation that reorganizes under IRC Section 368(a)(1)(D) is treated as having contributed all its assets to the new corporation -- and that triggers the (E-11)/(U) modifications just as an ordinary sale or transfer would. The ruling doesn't say the transaction becomes federally taxable; it says these two Illinois-specific true-up modifications apply regardless of the reorganization's tax-free status, because nothing in the statute exempts transfers made as part of a tax-free reorganization. So for the tax year in which the Contribution and Distribution occur, the taxpayer must add back the aggregate bonus-depreciation subtraction modifications it claimed under (T), and it may then subtract the aggregate addition modification it previously claimed under (E-10).

What this means for you

Corporations planning spin-offs or divisive reorganizations

If your company has claimed federal bonus depreciation (and the matching Illinois E-10/T modifications) on assets that are about to move to a new or related entity as part of a corporate separation, spin-off, or other IRC Section 368(a)(1)(D) reorganization -- even one that's completely tax-free for federal purposes -- expect to trigger the Illinois E-11/U "true-up" modifications in the year of the transfer. The tax-free federal treatment doesn't carry over to exempt you from this Illinois-specific mechanic.

Corporate tax and accounting teams doing depreciation modification tracking

This ruling is a reminder to keep a running ledger, asset by asset, of (1) the cumulative E-10 addback taken when bonus depreciation was claimed, and (2) the cumulative T subtractions taken to recover it over time. When that property is later transferred (by sale, abandonment, or a reorganization treated as a deemed transfer), you'll need those cumulative figures to calculate the E-11 addback (equal to total T subtractions taken) and the U subtraction (equal to the original E-10 addback).

Multistate holding companies with disregarded-entity subsidiaries

Because the subsidiary here was disregarded for both federal and Illinois purposes, its bonus depreciation modifications were being reported at the parent level. The ruling confirms that a reorganization involving that disregarded entity's assets is treated the same as any other disposition for purposes of the E-11/U modifications -- the disregarded-entity structure doesn't change the analysis.

Common questions

Q: Does a tax-free corporate reorganization avoid Illinois's bonus-depreciation addback rules?
A: No. Even though the Contribution and Distribution qualified as a tax-free reorganization under IRC Sections 355 and 368(a)(1)(D), the Department ruled that the Illinois addition modification under 35 ILCS 5/203(b)(2)(E-11) and the subtraction modification under 35 ILCS 5/203(b)(2)(U) still apply, because the reorganization is treated as a transfer of the underlying assets.

Q: Why does a "tax-free" transaction trigger any Illinois tax adjustment at all?
A: The E-11/U modifications aren't a tax on gain -- they reverse out the bonus-depreciation addition and subtraction modifications previously claimed on the property, so that the correct federal gain or loss (here, none, since the reorganization is tax-free) flows through correctly for Illinois purposes. The ruling describes these two modifications as reversing "all the modifications made on the property prior to disposition."

Q: What exactly does the corporation have to add back, and what can it subtract?
A: In the tax year of the Contribution and subsequent Distribution, the taxpayer must add back the aggregate amount of the subtraction modifications it claimed under 35 ILCS 5/203(b)(2)(T) with respect to the transferred property, and it is permitted to subtract the aggregate amount of the addition modification it previously claimed under 35 ILCS 5/203(b)(2)(E-10) on that same property.

Q: Is this ruling something other taxpayers can cite or rely on?
A: No. This is a Private Letter Ruling binding on the Department only as to the requesting corporation, and only to the extent the facts it described were correct and complete. The ruling itself states it binds the Department "for the taxable year specified" (the year of the Contribution/Distribution), subject to the limits in 2 Ill. Adm. Code 1200.110(d) and (e), and that it "will cease to bind the Department if there is a pertinent change in statutory law, case law, rules or in the material facts recited in this ruling."

Q: Does the business-purpose requirement for the spin-off matter to this Illinois ruling?
A: It's part of the factual backdrop but not the crux of the Illinois holding. The taxpayer had to supplement its ruling request to represent that the Distribution satisfied the corporate business-purpose requirement of Treasury Regulation 1.355-2(b) (since the IRS's own ruling didn't address that requirement). The Illinois ruling relies on Illinois generally following the federal reorganization treatment once that requirement -- along with the rest of the federal reorganization requirements -- is met.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2022.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2022/it22-0002-plr.pdf

Original ruling text

IT-22-0002 04/12/2022 ADDITION MODIFICATIONS – OTHER RULINGS
Taxpayer who claimed bonus depreciation addition and subtraction
modifications under IITA Sections 203(b)(2)(E-10) and (T) must add back
the aggregate amount of subtraction modifications claimed on the property
in the taxable year of an IRC Section 368(a)(1)(D) corporate
reorganization. (This is a PLR.)
April 12, 2022
Re:

Request for Private Letter Ruling
CORPORATION, FEIN: ##-#######
Tax Year Ended: YEAR

Dear NAME:
This is in response to your letter dated January 13, 2022, in which you request a
Private Letter Ruling (“PLR”) on behalf of CORPORATION. PLRs are issued by
the Department in response to specific taxpayer inquiries concerning the
application of a tax statute or rule to a particular fact situation. A PLR is binding
on the Department, but only as to the taxpayer issued the ruling and only to the
extent the facts recited in the PLR are correct and complete. The review of your
request for a PLR indicates that all information described in paragraphs 1
through 8 of subsection (b) of 2 Ill. Admin. Code 1200.110 is contained in your
request. This PLR will bind the Department only with respect to CORPORATION.
Issuance of this PLR is conditioned upon the understanding that
CORPORATION and/or any related taxpayer(s) is not currently under audit or
involved in litigation concerning the issues that are the subject of this ruling
request.
The facts and analysis as you have presented states as follows:
CORPORATION (“CORPORATION” or the “taxpayer”) hereby submits
this request for a private letter ruling pursuant to 2 Ill. Admin. Code §
1200.110. We request that the Department delete the following
confidential information from any publicly disclosed version of this letter or
published ruling: any names of entities, officers, or employees; any FEINs
or other identifying numbers; and any references to the nature of the
businesses conducted by CORPORATION.
The required representations and the relevant facts for this private letter
ruling are set forth below, and the specific ruling request is detailed
afterwards. If you have any questions, please don’t hesitate to contact me
by phone at ###-###-#### or by email at E-MAIL.
REPRESENTATIONS
The taxpayer requests a private letter ruling relating to its Illinois corporate
income tax return for the tax year ending MONTH DAY YEAR. There are

currently no audits or litigation pending concerning tax year YEAR or
matters at issue in the private letter ruling request. To the best of the
taxpayer’s knowledge, the Department has not previously ruled on the
same or a similar issue for the taxpayer or a predecessor, nor has the
taxpayer previously submitted the same or similar issue to the Department
and withdrawn it after a letter ruling was requested.
FACTS
CORPORATION, a STATE corporation, is a publicly traded utility services
holding company engaged in the generation, delivery, and marketing of
electricity and natural gas through various subsidiaries. Headquartered in
CITY, STATE, CORPORATION is the common parent of an affiliated
group of U.S. corporations that files a consolidated U.S. federal income
tax return. CORPORATION uses the accrual method of accounting and an
accounting period ending on MONTH DAY for purposes of filing its U.S.
federal income tax returns, as well as for maintaining its accounting books.
CORPORATION files an Illinois combined return with its unitary
subsidiaries.
CORPORATION is engaged in two key business lines: the competitive
power generation and marketing of electricity and gas (the “Controlled
Business”) and the regulated transmission and distribution of electricity
and natural gas (the “Distributing Business”). Certain subsidiaries of
CORPORATION also provide a variety of support services to other
CORPORATION subsidiaries, including legal, human resources, financial,
information technology, and supply management services.
The Controlled Business is conducted through COMPANY (“COMPANY”),
a STATE limited liability company and wholly-owned subsidiary of
CORPORATION. COMPANY is currently, and has been since its
inception, classified as a disregarded entity for U.S. federal income tax
purposes.
The Distributing Business consists of the purchase and regulated retail
sale of electricity and natural gas and the provision of distribution and
transmission services to retail customers. The Distributing Business is
operated through six utilities engaged in the purchase and regulated sale
of electricity and natural gas.
The Separation
CORPORATION intends to pursue a tax-free spin-off (the “Separation”) of
its Controlled Business. To effectuate the Separation, CORPORATION
has formed a new, wholly-and-directly-owned subsidiary corporation,
SUBSIDIARY (“Controlled”), a STATE corporation. Controlled is a
member of CORPORATION’S Illinois unitary group and will be included in
CORPORATION’S YEAR Illinois combined return.
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In furtherance of the Separation, CORPORATION will transfer its 100%
membership interest in COMPANY to Controlled (the “Contribution”).
Immediately thereafter, CORPORATION will then distribute to its
shareholders, on a pro rata basis, all of the issued and outstanding shares
of Controlled owned by CORPORATION (the “Distribution”). If applicable,
cash may be distributed in lieu of fractional shares. The Contribution and
Distribution are both expected to occur on the same day on MONTH DAY
YEAR.
In MONTH YEAR, CORPORATION submitted a private letter ruling
(“PLR”) request to the Internal Revenue Service (the “Service”) requesting
a ruling that the Contribution followed by the Distribution will qualify as a
tax-free reorganization under sections 355 and 368(a)(1)(D) of the Internal
Revenue Code of 1986, as amended, and related regulations. On MONTH
DAY YEAR, the Service ruled that the Contribution together with the
Distribution will be a tax-free reorganization, as requested by
CORPORATION.
Depreciation Related to COMPANY’S Assets
As noted previously COMPANY is a wholly-owned subsidiary of
CORPORATION. COMPANY is currently, and has been since its
inception, classified as a disregarded entity for U.S. federal income tax
purposes and for Illinois income tax purposes. As a result, the assets
owned by COMPANY are treated as being owned directly by COMPANY
and depreciation deductions taken with respect to COMPANY’S assets
have been reported at CORPORATION.
Since the enactment of bonus depreciation under Internal Revenue Code
§168(k), CORPORATION has taken bonus depreciation deductions on its
federal income tax returns for eligible assets. As required under Illinois
law, CORPORATION has reported addition and subtraction modifications
with respect to these assets, as required under 35 ILCS 5/203(b)(2)(E-10)
and (b)(2)(T).
RULING REQUESTED
The taxpayer requests a ruling on whether it will be required to make the
depreciation adjustments required under 35 ILCS 5/203(b)(2)(E-11) and
(b)(2)(U) as a result of the Contribution and subsequent Distribution?
Supporting Authority
35 ILCS 5/203
Contrary Authority
None.

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Illinois begins the computation of Illinois taxable income with federal
taxable income. 35 ILCS 5/203(e). A corporation’s federal taxable income
is then subject to addition and subtraction modifications to arrive at base
income. 35 ILCS 5/203(b). For taxable years 2001 and thereafter, a
taxpayer that claims a bonus depreciation deduction under Internal
Revenue Code Section 168(k) on its federal tax return for the taxable year
is required to add back the amount of such deduction on its Illinois tax
return for the taxable year. 35 ILCS 5/203(b)(2)(E-10). The taxpayer is
then permitted to take an annual deduction, pursuant to specified
formulas, on its Illinois tax return to recover a portion of the bonus
depreciation that it was required to add back. 35 ILCS 5/203(b)(2)(T).
Illinois law also contains specific addition and subtraction modifications
that are required when a taxpayer transfers property that was the subject
of the bonus depreciation modifications under 35 ILCS 5/203(b)(2)(E-10)
and (T).
35 ILCS 5/203(b)(2)(E-11) provides for the following addition modification:
If the taxpayer sells, transfers, abandons, or otherwise disposes of
property for which the taxpayer was required in any taxable year to
make an addition modification under subparagraph (E-10), then an
amount equal to the aggregate amount of the deductions taken in
all taxable years under subparagraph (T) with respect to that
property.
35 ILCS 5/203(b)(2)(U) provides for the following subtraction modification:
If the taxpayer sells, transfers, abandons, or otherwise disposes of
property for which the taxpayer was required in any taxable year to
make an addition modification under subparagraph (E-10), then an
amount equal to that addition modification.
For tax years 2001 and thereafter, CORPORATION reported the addition
modification required under 35 ILCS 5/203(b)(2)(E-10) and the subtraction
modification required under 35 ILCS 5/203(b)(2)(T) on its Illinois tax
returns with respect to COMPANY’S assets on which federal bonus
depreciation has been claimed (because COMPANY is a disregarded
entity for federal and state income tax purposes). On MONTH DAY
YEAR, CORPORATION will transfer its membership interest in
COMPANY to its unitary subsidiary Controlled (i.e., the Contribution). For
federal and state income tax purposes, this will be treated as a transfer of
COMPANY’S assets to Controlled. The Contribution will be followed by
the Distribution on the same day. As noted previously, the Contribution
and Distribution will be a tax-free reorganization for federal income tax
purposes pursuant to Internal Revenue Code Sections 355 and
368(a)(1)(D).
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Illinois law should follow the tax-free treatment of the Contribution and
Distribution. There is no provision in Illinois law, however, that would
preclude the application of the addition and subtraction modifications
required under 35 ILCS 5/203(b)(2)(E-11) and (b)(2)(U) upon the
occurrence of the Contribution and subsequent Distribution. These
sections apply, without exception, “[i]f the taxpayer sells, transfers,
abandons, or otherwise disposes of property” for which the taxpayer was
required to make modifications in any taxable year under 35 ILCS
5/203(b)(2)(E-10) and (b)(2)(T).
The taxpayer accordingly requests that the Department issue a ruling
affirming that CORPORATION will be required to make the addition and
subtraction modifications required under 35 ILCS 5/203(b)(2)(E-11) and
(b)(2)(U) on its Illinois income tax return for the tax year in which the
Contribution and subsequent Distribution occur. At this time,
CORPORATION anticipates this to occur in QUARTER YEAR.
Your request includes the following supplemental information submitted to the
Department on March 22, 2022:
Pursuant to your request, CORPORATION hereby submits this
supplement to its request for a private letter ruling pursuant to 2 Ill. Admin.
Code § 1200.110, previously submitted on January 14, 2022. In this
supplement we are providing a representation that the Distribution
satisfies the Business Purpose requirement of Treasury Regulation 1.3552(b).
REPRESENTATIONS


The Distribution was motivated by non-tax business purposes.



The Distribution was motivated, in whole or in part, by the
following business purposes:
The Separation will enhance the fit and focus of both
Distributing and Controlled across several critical criteria
including, but not limited to, management focus, competition
for capital, capital structure, management and employee
compensation, and acquisition currency.
RULING

Section 203(e)(1) of the Illinois Income Tax Act (“IITA”, 35 ILCS 5/101 et seq.),
provides that for purposes of Section 203 a taxpayer’s gross income, adjusted
gross income, or taxable income for the taxable year shall mean the amount of
gross income, adjusted gross income or taxable income properly reportable for
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federal income tax purposes for the taxable year under the provisions of the
Internal Revenue Code (“IRC”). This provision, which couples the Illinois tax base
to the federal tax base, is complimented by three other rules. First, IITA Section
401 provides that a taxpayer’s taxable year under the IITA is generally the same
as the taxpayer’s taxable year for federal income tax purposes. Second, IITA
Section 402 states that a taxpayer’s method of accounting under the IITA is the
same as the taxpayer’s method of accounting for federal income tax purposes.
Finally, IITA Section 403 requires each taxpayer to take into account on his or
her Illinois income tax return items of income, deduction and exclusion in the
same manner as reflected on the taxpayer’s federal income tax return. Primarily
as a result of these provisions, transactions that are deemed to occur for federal
income tax purposes, and the tax consequences that result from those deemed
transactions, likewise are deemed to occur and apply for purposes of the IITA. In
addition, pursuant to IITA Sections 102 and 1501(a)(4), 86 Ill. Admin. Code
Section 100.9750(b)(1) provides that any entity treated as a corporation for
federal income tax purposes must be treated as a corporation for all purposes of
the IITA, and that no entity (other than a cooperative) that is not treated as a
corporation for federal income tax purposes may be treated as a corporation for
purposes of the IITA.
Pursuant to Section 203(b) of the IITA, a corporation computes its base income
by starting with its federal taxable income and making various addition and
subtraction modifications. Section 203(h) of the IITA provides:
Except as expressly provided by this Section there shall be no
modifications or limitations on the amounts of income, gain, loss or
deduction taken into account in determining gross income, adjusted gross
income or taxable income for federal income tax purposes for the taxable
year, or in the amount of such items entering into the computation of base
income and net income under this Act for such taxable year, whether in
respect of property values as of August 1, 1969 or otherwise.
Pursuant to Section 203(b)(2)(E-10) of the IITA, a corporation is required to add
back to its federal taxable income:
For taxable years 2001 and thereafter, an amount equal to the bonus
depreciation deduction on the taxpayer’s federal income tax return for the
taxable year under subsection (k) of Section 168 of the Internal Revenue
Code.
Pursuant to Section 203(b)(2)(T) of the IITA, a corporation is then allowed to
subtract:
For taxable years 2001 and thereafter, for the taxable year in which the
bonus depreciation deduction is taken on the taxpayer’s federal income
tax return under subsection (k) of Section 168 of the Internal Revenue
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Code and for each applicable taxable year thereafter, an amount equal to
“x”, where:
1) “y” equals the amount of the depreciation deduction taken for
the taxable year on the taxpayer’s federal income tax return on
property for which the bonus depreciation deduction was taken
in any year under subsection (k) of Section 168 of the Internal
Revenue Code, but not including the bonus depreciation
deduction;
2) for taxable years ending on or before December 31, 2005, “x”
equals “y” multiplied by 30 and then divided by 70 (or “y”
multiplied by 0.429);
3) for taxable years ending after December 31, 2005:
i.

for property on which a bonus depreciation deduction of
30% of the adjusted basis was taken, “x” equals “y”
multiplied by 30 and then divided by 70 (or “y” multiplied
by 0.429);

ii.

for property on which a bonus depreciation deduction of
50% of the adjusted basis was taken, “x” equals “y”
multiplied by 1.0;

iii.

for property on which a bonus depreciation deduction of
100% of the adjusted basis was taken in a taxable year
ending on or after December 31, 2021, “x” equals the
depreciation deduction that would be allowed on that
property if the taxpayer had made the election under
Section 168(k)(7) of the Internal Revenue Code to not
claim bonus depreciation on that property; and

iv.

for property on which a bonus depreciation deduction of a
percentage other than 30%, 50% or 100% of the adjusted
basis was taken in a taxable year ending on or after
December 31, 2021, “x” equals “y” multiplied by 100
times the percentage bonus depreciation on the property
(that is, 100(bonus%)) and then divided by 100 times 1
minus the percentage bonus depreciation on the property
(that is, 100(1-bonus%)).

The aggregate amount deducted under this subparagraph in all taxable
years for any one piece of property may not exceed the amount of the
bonus depreciation deduction taken on that property on the taxpayer’s
federal income tax return under subsection (k) of Section 168 of the
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Internal Revenue Code. This subparagraph (T) is exempt from the
provisions of Section 250.
In the case of a sale or other disposition of property with respect to which federal
bonus depreciation deductions have been claimed, the IITA provides for both an
addition and subtraction modification to federal taxable income. First, IITA
Section 203(b)(2)(E-11) requires that the taxpayer make an addition modification
equal to the aggregate amount of subtraction modifications taken in all taxable
years with respect to the property under IITA Section 203(b)(2)(T). Second, IITA
Section 203(b)(2)(U) allows a subtraction modification equal to the addition
modification under IITA Section 203(b)(2)(E-10) previously claimed with respect
to the property for the bonus depreciation. These two modifications reverse all
the modifications made on the property prior to disposition, so that the amount of
gain or loss recognized for federal income tax purposes on disposition reflects
the correct gain or loss for Illinois purposes.
IRC Section 368(a)(1)(D) provides that the term “reorganization” means a
transfer by a corporation of all or a part of its assets to another corporation if
immediately after the transfer the transferor, or one or more of its shareholders
(including persons who were shareholders immediately before the transfer), or
any combination thereof, is in control of the corporation to which the assets are
transferred; but only if, in pursuance of the plan, stock or securities of the
corporation to which the assets are transferred are distributed in a transaction
which qualifies under IRC Section 354, 355, or 356. To qualify for IRC Section
368(a)(1)(D) tax deferral treatment, Treasury Regulation Section 1.368-1
provides that corporate reorganization must meet certain requirements such as
continuity of business enterprise and valid business purpose.
IRC Section 355(a)(1) provides the general rule no gain or loss shall be
recognized to (and no amount shall be includible in the income of) such
shareholder or security holder on the receipt of stock or securities if a distributing
corporation distributes to a shareholder, with respect to its stock, or distributes to
a security holder, in exchange for its securities, solely stock or securities of a
controlled corporation which it controls immediately before the distribution.
Treasury Regulation Section 1.355-2(b) provides that IRC Section 355 applies to
a transaction only if it is carried out for one or more corporate business purposes.
A transaction is carried out for a corporate business purpose if it is motivated, in
whole or substantial part, by one or more corporate business purposes.
Under the provisions of the IITA discussed above, where a corporate
reorganization occurs for federal income tax purposes, it likewise is recognized
for Illinois income tax purposes. Further, the transactions that are deemed to
occur for federal purposes incident to the reorganization, and the tax
consequences that result from those deemed transactions, are likewise deemed
to occur, and apply for Illinois income tax purposes.

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You represented in your ruling request letter the Internal Revenue Service (“IRS”)
ruled the transactions you described will qualify as a “reorganization” within the
meaning of IRC Section 368(a)(1)(D), and will qualify as tax-free transactions,
federally. In their ruling, the IRS made no determination regarding whether the
Distribution satisfied the business purpose requirement of Treasury Regulation
1.355-2(b). In your supplemental letter, you represented the Distribution satisfied
the business purpose requirement of Treasury Regulation 1.355-2(b) and was
motivated by non-tax business purposes.
IITA Sections 203(b)(2)(E-11) and (b)(2)(U) provide an addition and subtraction
modification where property, with respect to bonus depreciation modifications
have been required, is sold, transferred, abandoned, or otherwise disposed.
Since a corporation that is reorganized under IRC Section 368(a)(1)(D) is
deemed to have contributed all of its assets to the new corporation, the addition
and subtraction modifications under IITA Section 203(b)(2)(E-11) and (b)(2)(U)
apply. For the taxable year of its reorganization (i.e., Contribution and
subsequent Distribution), CORPORATION must add back the aggregate amount
of subtraction modifications claimed on property under IITA Section 203(b)(2)(T)
and is permitted to subtract the amount of the addition modification claimed on
property under IITA Section 203(b)(2)(E-10).
Except as provided herein, this ruling shall bind the Department for the taxable
year ending MONTH DAY YEAR. The facts upon which this ruling is based are
subject to review by the Department during the course of any audit, investigation
or hearing and this ruling shall bind the Department only if the material facts as
recited and incorporated in this ruling are correct and complete. This ruling shall
bind the Department for the taxable year specified above, except as limited
pursuant to 2 Ill. Admin. Code 1200.110(d) and (e). In addition, this ruling will
cease to bind the Department if there is a pertinent change in statutory law, case
law, rules or in the material facts recited in this ruling.
Sincerely,
Jennifer Uhles
Associate Counsel (Income Tax)

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