IL-1065 Instructions

              IL-1065 Instructions (R-12/05) Page 1 of 8
Illinois Department of Revenue
IL-1065 Instructions 2005
What’s new for 2005?
• Effective for tax years ending on or after December 31, 2004,
any partnership that meets the requirements of “investment
partnership” as defined in the IITA, Section 1501(a)(11.5), shall
not be subject to replacement tax, and is not required to file
Form IL-1065. However, you may elect to file Form IL-1065
even if you are an investment partnership. See Specific
Instructions for Part III for more information.
• Effective immediately, “business income” is defined to mean
all income that may be apportioned without violating the
Constitution of the United States. This new definition overrules
recent court cases that had ruled that gain from disposition of
an entire business or from property that previously had been
used in a business is not business income. Also, if you re-ported
income from an asset or activity as business income in
a prior year, and report any income from that asset or activity
as nonbusiness income on this return, you must add back all
expenses deducted in connection with that income in this year
and in your two most recent tax years. See Specific Instructions
for Part I, Line 2d, and Part III, Lines 2a and 7.
• Effective for tax years ending on or after December 31, 2004,
you may not deduct some interest or “intangible expenses”
such as royalties and losses on sales of intangible assets from
transactions with a taxpayer who would be a member of your
unitary business group, but cannot be included because 80
percent or more of its business is conducted outside the United
States. Also, the 80/20 company that receives the amounts will
not be taxed on them. See Specific Instructions for Part I, Lines
2d and 5g and Schedule 80/20, Related-Party Expenses for
more information.
• The IL-477, Replacement Tax Investment Credit, scheduled to
expire on December 31, 2003, has been extended until
December 31, 2008. You may continue to claim a credit for
qualified property placed in service after December 31, 2003.
General Information
Who must file Form IL-1065?
You must file Form IL-1065 if you are a partnership, as defined in
“Definitions to help you complete your Form IL-1065,” and you
have base income or loss as defined under the Illinois Income Tax
Act (IITA).
If you are a partnership organized for the sole purpose of playing the
Illinois State Lottery, you are not required to file a Form IL-1065.
It is your duty as a taxpayer to obtain forms. Failure to obtain them is
not an excuse for failure to file returns as required by law.
How do I register my business?
If you are required to file Form IL-1065, you should register by
calling our Central Registration Division at 217 785-3707. You may
be able to register electronically. Visit our web site at
www.tax.illinois.gov for more information.
Registering with the Illinois Department of Revenue (IDOR), prior
to filing your return ensures that your tax returns are accurately
processed.
Your identification numbers as an Illinois business taxpayer are
your federal employer identification number (FEIN) and your
Illinois business tax (IBT) number.
When should I file?
Your Illinois filing period is the same as your federal filing period.
In general, Form IL-1065 is due on or before the 15th day of the
4th month following the close of the tax year.
Automatic six-month extension — We grant you an automatic
six-month extension of time to file your partnership tax return. You
are not required to file Form IL-505-B, Automatic Extension
Payment, in order to obtain this automatic extension. However, if
you expect tax to be due, you must use Form IL-505-B to pay any
tentative tax due in order to avoid interest and penalty on tax not
paid by the original due date of the return. An extension of time to
file your Form IL-1065 is not an extension of time for payment of
Illinois tax.
Additional extensions beyond the automatic extension
period — We will grant an extension of more than six months
only if an extension of more than six months is granted by the
Internal Revenue Service (IRS). You must attach a copy of the
approved federal extension to your Form IL-1065.
Where should I file?
Mail your Form IL-1065 to
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19031
SPRINGFIELD IL 62794-9031
When should I pay?
Payment of tax — You must pay your Illinois replacement tax in
full on or before the original due date of the return. This payment
date applies even though an automatic extension for filing your
return has been granted.
Estimated tax payments — Partnerships are not required to
make estimated tax payments.
Who should sign the return?
Your Form IL-1065 must be signed by a partner or any other officer
duly authorized to sign the return. In the case of a bankruptcy, a
receiver, trustee, or assignee must sign any return required to be
filed on behalf of a partnership. The signature verifies by written
declaration (and under penalties of perjury) that the signing
individual has personally examined the return and the return is
true, correct, and complete. The fact that an individual’s name is
signed to a return is prima facie evidence that the individual is
authorized to sign the return on behalf of the partnership.
Any person paid to prepare the return (other than a regular, full-time
employee of the taxpayer, such as a clerk, secretary, or bookkeeper)
must provide a handwritten signature, date the return, and write the
preparer’s taxpayer identification number. If the preparer is an
employee or partner of a firm or corporation, the preparer must also
provide the firm’s name, address, and instead of the preparer’s
taxpayer identification number, the preparer must provide the firm’s
FEIN. Self-employed preparers must check the “self-employed” box
and provide their own name, address, and taxpayer identification
number in the appropriate spaces.
If your return is not signed, any overpayment of tax is
considered forfeited if, after notice and demand for signature, you
fail to provide a signature within three years from the date your
return was filed.