2005 Income Tax Letter Rulings

General Information Letters

Ruling	Date	Subject	Synopsis
IT 05-0050-GIL	12/22/2005	Subtraction Modifications – Other Rulings	General Information Letter: Response to survey regarding Illinois taxation of municipal bonds.
IT 05-0049-GIL	11/22/2005	Withholding - Other Rulings	General Information Letter: Application of the "paid in this State" rule for determining when compensation is subject to withholding.
IT 05-0048-GIL	11/08/2005	Estimated Tax	General Information Letter: Explanation of use of the annualization method.
IT 05-0047-GIL	11/01/2005	Sales Outside the Ordinary Course of Business	General Information Letter: Sale of more than half of the real property used in a business will trigger the bulk sale reporting requirement.
IT 05-0046-GIL	10/26/2005	Apportionment – Sales Factor	General Information Letter: The numerator of the sales factor of a service provider is determined by sourcing each sale separately according to the income-producing activities related to that sale, not by using the aggregate activities for all sales.
IT 05-0045-GIL	09/21/2005	Composite Returns	General Information Letter: Petition to include Illinois residents on composite returns cannot be granted absent a showing that doing so will be more convenient for both the taxpayers and the Department of Revenue.
IT 05-0044-GIL	09/14/2005	Base Income	General Information Letter: Compensation earned in a foreign country and excluded from federal adjusted gross income is excluded from base income.
IT 05-0043-GIL	09/12/2005	Apportionment - Sales Factor	General Information Letter: Taxpayer's sales of services are sourced using the income producing activity and cost of performance rules.
IT 05-0042-GIL	09/09/2005	Public Law 86-272/Nexus	General Information Letter: Nexus determinations cannot be made by letter ruling.
IT 05-0041-GIL	09/08/2005	Withholding - Other Rulings	General Information Letter: Illinois uses the federal income tax definition of "employee" for withholding purposes.
IT 05-0040-GIL	08/17/2005	Subtraction Modifications - Other Rulings	General Information Letter: Income from reimbursement for medical expenses claimed as itemized deductions in a prior year may be subtracted.
IT 05-0039-GIL	08/08/2005	Alternative Apportionment	General Information Letter: Petition for alternative apportionment cannot be granted based on facts shown in the petition.
IT 05-0038-GIL	07/29/2005	Subtraction Modifications	General Information Letter: No subtraction is allowed to a partnership for capitalized syndication fees included in basis of the partners.
IT 05-0037-GIL	07/25/2005	Subtraction Modifications - Pensions	General Information Letter: Gain on sale of employer securities distributed from qualified retirement plan is exempt from income tax.
IT 05-0036-GIL	07/20/2005	Apportionment - Sales Factor	General Information Letter: Application of sales factor rules to internet automobile advertising business.
IT 05-0035-GIL	06/23/2005	Subtraction Modifications - Other Rulings	General Information Letter: Interest on an Illinois obligation may be subtracted only if expressly exempted from Illinois income taxation by statute.
IT 05-0034-GIL	06/22/2005	Alternative Apportionment	General Information Letter: Petition for alternative apportionment failed to meet its burden of proof to show distortion by the statutory apportionment method or correct apportionment by the proposed alternative.
IT 05-0033-GIL	06/21/2005	Miscellaneous	General Information Letter: A partner included on a composite return of a partnership that does not file with the return a disclosure of a reportable transaction engaged in by the partner may fulfill his or her disclosure requirements by sending a copy of the required federal disclosure to the separate disclosure address, without attaching it to any return.
IT 05-0032-GIL	06/16/2005	Residency/Nonresidency	General Information Letter: A taxpayer who remains domiciled in another state, enters Illinois only for purposes of his or her job, and returns to the state of domicile every weekend remains a nonresident.
IT 05-0031-GIL	06/13/2005	Miscellaneous	General Information Letter: A trust may use the address of a beneficiary's attorney on Form IL-1041 Schedule D rather than the beneficiary's home address.
IT 05-0030-GIL	06/08/2005	Exempt Organizations	General Information Letter: Organizations exempt from federal income tax under IRC Section 501(a) are subject to Illinois income tax only on unrelated business taxable income.
IT 05-0029-GIL	06/06/2005	Credits - Foreign Tax	General Information Letter: Computation of credit for taxes paid to Wisconsin explained.
IT 05-0028-GIL	06/02/2005	Subtraction Modifications - Other Rulings	General Information Letter: Interest on an Illinois obligation may be subtracted only if expressly exempted from Illinois income taxation by statute.
IT 05-0027-GIL	05/25/2005	Base Income	General Information Letter: Base income does not include any item excluded from federal taxable income unless a specific statutory provision requires that item to be added back.
IT 05-0026-GIL	05/20/2005	Credits - Foreign Tax	General Information Letter: No credit is allowed for taxes paid to another state on compensation "paid in this State" under IITA Section 304(a)(2)(B).
IT 05-0025-GIL	05/19/2005	Public Law 86-272/Nexus	General Information Letter: Nexus issues are generally not suitable for resolution by letter ruling.
IT 05-0024-GIL	05/18/2005	Collection	General Information Letter: There is no statute of limitations for offsetting a refund against an assessed liability.
IT 05-0023-GIL	05/16/2005	Compensation	General Information Letter: Gain on employee stock options characterized as compensation for federal income tax purposes is compensation allocated to Illinois under the provisions of IITA Section 304(a)(2)(B).
IT 05-0022-GIL	05/06/2005	Alternative Apportionment	General Information Letter: Petition contains insufficient evidence of distortion caused by statutory apportionment methods to support grant of permission to use alternative apportionment.
IT 05-0021-GIL	05/02/2005	Credits- Education	General Information Letter: "Home school" costs may qualify for the credit.
IT 05-0020-GIL	05/02/2005	Apportionment - Sales Factor	General Information. Letter: General guidance on determination of the sales factor numerator.
IT 05-0019-GIL	04/29/2005	Credits - Foreign Tax	General Information Letter: Explanation of computation of income double-taxed by Utah and Illinois.
IT 05-0018-GIL	04/15/2005	Credits- Education	General Information: Explanation of whether various expenditures may qualify for the credit.
IT 05-0017-GIL	04/14/2005	Subtraction Modifications - Pensions	General Information Letter: Income from an inherited IRA may be subtracted.
IT 05-0016-GIL	04/11/2005	Credits - Foreign Tax	General Information Letter: The amount of tax paid to Missouri that qualifies for the foreign tax credit is not reduced by the amount paid by the taxpayer for a transferable credit used against the liability.
IT 05-0015-GIL	04/05/2005	Subtraction Modifications - Other Rulings	General Information Letter: Individual with an IRC Section 1341 credit for claim-of-right income relinquished during the tax year is entitled to a subtraction for the amount relinquished, but may not carry over any resulting negative net income.
IT 05-0014-GIL	04/01/2005	Base Income	General Information Letter: Illinois follows federal income tax treatment of health savings accounts under IRC Section 125.
IT 05-0013-GIL	04/01/2005	Subtraction Modifications - Pensions	General Information Letter: Annuity purchased from life insurance company outside any pension plan is not exempt from Illinois tax.
IT 05-0012-GIL	03/29/2005	Credits - Foreign Tax	General Information Letter: No credit is allowed for taxes paid to another state on compensation "paid in this State" under IITA Section 304(a)(2)(B).
IT 05-0011-GIL	03/16/2005	Withholding - Other Rulings	General Information Letter: Illinois law requires paper W-4s.
IT 05-0010-GIL	03/14/2005	Base Income	General Information Letter: Foreign corporation whose income is exempt from federal taxation by treaty has no Illinois base income.
IT 05-0009-GIL	03/11/2005	Credits - Foreign Tax	General Information Letter: Creditable taxes paid to another state include the amount paid for a transferable credit.
IT 05-0008-GIL	03/08/2005	Base Income	General Information Letter: Illinois income tax treatment of health savings accounts qualifying under IRC Section 223 follows the federal treatment.
IT 05-0007-GIL	03/07/2005	Subtraction Modifications - Other Rulings	General Information Letter: Only the bonus depreciation subtractions allowed on the Form IL-4562 may be taken.
IT 05-0006-GIL	02/10/2005	Public Law 86-272/Nexus	General Information. Letter: Nexus questions generally may not be resolved by letter ruling.
IT 05-0005-GIL	02/02/2005	Public Law 86-272/Nexus	General Information Letter: Illinois requires paper Forms W-4 signed by the employee.
IT 05-0004-GIL	01/25/2005	Credits - Foreign Tax	General Information Letter: Foreign tax credit is not allowed for taxes paid to another state on compensation "paid in this State" under IITA Section 304(a)(2)(B).
IT 05-0003-GIL	01/24/2005	Public Law 86-272/Nexus	General Information Letter: Activities of independent contractors conducted in Illinois on behalf of the taxpayer may cause the loss of protection under Public Law 86-272.
IT 05-0002-GIL	01/12/2005	Withholding - Other Rulings	General Information Letter: Application of the "paid in this State" principles to several examples.
IT 05-0001-GIL	01/04/2005	Public Law 86-272/Nexus	General Information Letter: Sales of service are not protected from state taxation by Public Law 86-272.

Private Letter Rulings

Ruling	Date	Subject	Synopsis
IT 05-0008-PLR	11/08/2005	Subtraction Modifications – Other Rulings	Private Letter Ruling: Compensation of a British citizen employed by a British consulate exempted from state income taxation under the 1951 Consular Officers Convention between the United States and Great Britain is not subject to Illinois Income tax.
IT 05-0007-PLR	10/17/2005	Alternative Apportionment	Private Letter Ruling: Petition to use alternative apportionment is granted.
IT 05-0006-PLR	11/08/2005	Credits – Other Rulings	Private Letter Ruling: A partner is entitled to the portion of the film production services credit shown on the final certificate issued by DCEO that is allocated to it by the partnership agreement.
IT 05-0005-PLR	07/01/2005	Credits – Other Rulings	Private Letter Ruling. A partner is entitled to the portion of the film production services credit shown on the final certificate issued by DCEO that is allocated to it by the partnership agreement.
IT 05-0004-PLR	06/13/2005	Subtraction Modifications – Other Rulings	Private Letter Ruling: Partnership may subtract the portion of its income distributable to a charitable remainder unitrust.
IT 05-0003-PLR	06/13/2005	Subtraction Modifications – Other Rulings	Private Letter Ruling: Partnership may subtract the portion of its income distributable to a charitable remainder unitrust.
IT 05-0002-PLR	03/29/2005	Alternative Apportionment	Private Letter Ruling: Petition for to use alternative apportionment formula granted to taxpayer whose business activity in Illinois would not be fairly reflected in the sales factor.
IT 05-0001-PLR	01/26/2005	Alternative Apportionment	Private Letter Ruling: Petition to apply 86 Ill. Admin. Code Section 100.3380(d) to taxable years beginning prior to its effective date is granted.