71.74(6)
(6) Consolidated statements. For the purpose of this chapter, whenever a corporation which is required to file an income or franchise tax return is affiliated with or related to any other corporation through stock ownership by the same interests or as parent or subsidiary corporations, or whose income is regulated through contract or other arrangement, the department may require such consolidated statements as in its opinion are necessary in order to determine the taxable income received by any one of the affiliated or related corporations or to determine whether the corporations are a unitary business.
71.74(7)
(7) Additional assessments against dissolved corporation. If all or substantially all of the business or property of a corporation is transferred to one or more persons and the corporation is liquidated, dissolved, merged, consolidated or otherwise terminated, any tax imposed by this chapter on such corporation may be assessed and collected as prescribed in this section against the transferee or transferees of such business or property. Notice shall be given to such transferee or transferees under
sub. (11) within the time specified in
s. 71.77 irrespective of any other limitations imposed by law. If such corporation has dissolved, such notice may be served on any one of the last officers or members of the board of directors of such corporation.
71.74(8)(a)(a) If an audit of a claim for a credit under
s. 71.07,
71.28 or
71.47 or
subch. VIII or
IX indicates that an incorrect claim was filed, the department shall make a determination of the correct amount and notify the claimant of the determination and the reasons therefor under
sub. (11) within 4 years of the last day prescribed by law for filing the claim. If the claim has been paid, or credited against income or franchise taxes otherwise payable, the credit shall be reduced or canceled, and the proper portion of any amount paid shall be similarly recovered by assessment as income or franchise taxes are assessed.
71.74(8)(b)
(b) If a claim for a credit under
s. 71.07,
71.28 or
71.47 or
subch. VIII or
IX is false or excessive and was filed with fraudulent intent, the claim shall be disallowed in full and, if the claim has been paid or a credit has been allowed against income or franchise taxes otherwise payable, the credit shall be canceled and the amount paid may be recovered by assessment as income or franchise taxes are assessed.
71.74(8)(c)
(c) If a claim for a credit under
s. 71.07,
71.28 or
71.47 or
subch. VIII or
IX is excessive and was negligently prepared, 10% of the corrected claim shall be disallowed and, if the claim has been paid or credited against income or franchise taxes otherwise payable, the credit shall be reduced or canceled and the proper portion of any amount paid shall be similarly recovered by assessment as income or franchise taxes are assessed.
71.74(8)(d)
(d) If a claim for a state historic rehabilitation credit under
s. 71.07 (9r) is false or excessive, the department shall disallow the claim in full. If a credit has been allowed against income taxes otherwise payable, the credit shall be canceled and the amount may be recovered by assessment as income taxes are assessed. Notwithstanding
par. (a) and
s. 71.77, the department shall notify the claimant of the determination and shall give reasons for the disallowance under
sub. (11) within 4 years after the date that the state historical society notifies the department that the preservation or rehabilitation is not in compliance with
s. 71.07 (9r) (b) 3. b. or
4., but that notification must be made within 6 years after the date that the physical work of construction, or destruction in preparation for construction, begins.
71.74(9)
(9) Liability may be assessed to more than one person. If the department determines that a liability exists under this chapter and that the liability may be owed by more than one person, the department may assess the entire amount to each person, specifying that it is assessing in the alternative.
71.74(10)
(10) Notice to taxpayer of adjustment. The department shall notify the taxpayer, as provided in
sub. (11), of any adjustment, correction and assessment made under
sub. (1).
71.74(11)
(11) Notice of additional assessment. The department shall notify the taxpayer in writing of any additional assessment by office audit or field investigation. That notice shall be served as are circuit court summonses, or by registered mail, or by regular mail if the person assessed admits receipt or there is satisfactory evidence of receipt. In the case of joint returns, notice of additional assessment may be a joint notice and service on one spouse is proper notice to both spouses. If the spouses have different addresses at the time the notice of additional assessment is served and if either spouse notifies the department of revenue in writing of those addresses, the department shall serve a duplicate of the original notice on the spouse who has the address other than the address to which the original notice was sent, if no request for a redetermination or a petition for review has been commenced or finalized. For the spouse who did not receive the original notice, redetermination and appeal rights begin upon the service of a duplicate notice. If the taxpayer is a corporation and the department is unable to serve that taxpayer personally or by mail, the department may serve the notice by publishing a class 3 notice, under
ch. 985, in the official state newspaper.
71.74(12)
(12) Taxes delinquent after due date. Additional income or franchise taxes assessed under
subs. (1) to
(5),
(7) and
(8) shall become delinquent if not paid on or before the due date stated in the notice to the taxpayer.
71.74(13)
(13) Collection of additional tax and issuance of refunds. 71.74(13)(a)(a) If the tax is increased the department shall proceed to collect the additional tax in the same manner as other income or franchise taxes are collected. If the income or franchise taxes are decreased upon direction of the department the secretary of administration shall refund to the taxpayer such part of the overpayment as was actually paid in cash, and the certification of the overpayment by the department shall be sufficient authorization to the secretary of administration for the refunding of the overpayment. No refund of income or franchise tax shall be made by the secretary of administration unless the refund is so certified. The part of the overpayment paid to the county and the local taxation district shall be deducted by the secretary of administration in the secretary's next settlement with the county and local treasurer.
71.74(13)(b)
(b) No action or proceeding whatsoever shall be brought against the state or the secretary of administration for the recovery, refund, or credit of any income or surtaxes; except in case the secretary of administration shall neglect or refuse for a period of 60 days to refund any overpayment of any income or surtaxes certified, the taxpayer may maintain an action to collect the overpayment against the secretary of administration so neglecting or refusing to refund such overpayment, without filing a claim for refund with the secretary of administration, provided that such action shall be commenced within one year after the certification of such overpayment.
71.74(14)
(14) Additional remedy to collect tax. The department may also proceed under
s. 71.91 (5) for the collection of any additional assessment of income or franchise taxes or surtaxes, after notice thereof has been given under
sub. (11) and before the same shall have become delinquent, when it has reasonable grounds to believe that the collection of such additional assessment will be jeopardized by delay. In such cases notice of the intention to so proceed shall be given by registered mail to the taxpayer, and the warrant of the department shall not issue if the taxpayer within 10 days after such notice furnishes a bond in such amount, not exceeding double the amount of the tax, and with such sureties as the department shall approve, conditioned upon the payment of so much of the additional taxes as shall finally be determined to be due, together with interest thereon as provided by
s. 71.82 (1) (a). Nothing in this subsection shall affect the review of additional assessments provided by
ss. 71.88 (1) (a) and
(2) (a),
71.89 (2),
73.01, and
73.015, and any amounts collected under this subsection shall be deposited with the department and disbursed after final determination of the taxes as are amounts deposited under
s. 71.90 (2).
71.74(15)
(15) Payments. All nondelinquent payments of additional amounts owed shall be applied in the following order: penalties, interest, tax principal.
71.74 Annotation
The investigative power of the department under s. 71.11 (20) (b) [now 71.74 (2)] is similar to the power of the IRS under 26 USC 7602. A taxpayer subpoenaed by the department has limited discovery rights under United States v. Genser,
595 F.2d 146 (1979). State v. Beno,
99 Wis. 2d 77,
298 N.W.2d 405 (Ct. App. 1980).
71.75
71.75
Claims for refund. 71.75(1)(1) Except as provided in
ss. 49.855,
71.77 (5) and
(7) (b) and
71.935, the provisions for refunds and credits provided in this section shall be the only method for the filing and review of claims for refund of income and surtaxes, and no person may bring any action or proceeding for the recovery of such taxes other than as provided in this section.
71.75(2)
(2) With respect to income taxes and franchise taxes, except as otherwise provided in
subs. (5) and
(9) and
ss. 71.30 (4) and
71.77 (5) and
(7) (b), refunds may be made if the claim therefor is filed within 4 years of the unextended date under this section on which the tax return was due.
71.75(3)
(3) No refund shall be made on the over-withholding or overpayment of estimated income taxes or franchise taxes with respect to any person for any taxable year in an amount less than $1.
71.75(4)
(4) Except as provided in
subs. (5) and
(5m), no refund shall be made and no credit shall be allowed for any year that has been the subject of a field audit if the audit resulted in a refund or no change to the tax owed or in an assessment that is final under
s. 71.88 (1) (a) or
(2) (a),
71.89 (2),
73.01 or
73.015 and if the department of revenue notifies the taxpayer that unless the taxpayer appeals the result of the field audit under
subch. XIV, the field audit is final. No refund shall be made and no credit shall be allowed on any item of income or deduction, assessed as a result of an office audit, the assessment of which is final under
s. 71.88 (1) (a) or
(2) (a),
71.89 (2),
73.01 or
73.015.
71.75(5)
(5) A claim for refund may be made within 4 years after the assessment of a tax or an assessment to recover all or part of any tax credit, including penalties and interest, under this chapter, assessed by office audit or field audit and paid if the assessment was not protested by the filing of a petition for redetermination. No claim may be allowed under this subsection for any tax, interest or penalty paid with respect to any item of income, credit or deduction self-assessed or determined by the taxpayer or assessed as the result of any assessment made by the department with respect to which all the conditions specified in this subsection are not met. If a claim is filed under this subsection, the department of revenue may make an additional assessment in respect to any item of income or deduction that was a subject of the prior assessment. No claim for refund may be made in respect to items that were not adjusted in the notice of assessment or of refund. A person whose returns for more than one year have been adjusted may make a claim under this subsection whether or not the net result of the adjustments for those years is an assessment. This subsection does not extend the time to file under
s. 71.53 (2) or
71.59 (2), and it does not extend the time period during which the department of revenue may assess, or the taxpayer may claim a refund, in respect to any item of income or deduction that was not a subject of the prior assessment.
71.75(5m)
(5m) In respect to overpayments attributable to a capital loss carry-back, a corporation may claim a refund within 4 years after the due date, including extensions, for filing the return for the taxable year of the capital loss that is carried back.
71.75(6)
(6) Every claim for refund or credit of income taxes, franchise taxes or surtaxes, if any, shall be filed with the department and signed by the person or, in the case of joint returns, by both persons who filed the return on which the claim is based and shall set forth specifically and explain in detail the reasons for and the basis of the claim. After the claim has been filed it shall be considered and acted upon in the same manner as are additional assessments made under
s. 71.74 (1) and
(2). No marital property agreement or unilateral statement under
ch. 766 affects claims for refund or credit under this section.
71.75(7)
(7) The department shall act on any claim for refund or credit within one year after receipt and failure to act shall have the effect of allowing the claim and the department shall certify the refund or credit unless the taxpayer has consented in writing to an extension of the one-year time period prior to its expiration.
71.75(8)
(8) A refund payable on the basis of a separate return shall be issued to the person who filed the return. A refund payable on the basis of a joint return shall be issued jointly to the persons who filed the return, except that, if a judgment of divorce under
ch. 767 apportions any refund that may be due the formerly married persons to one of the former spouses, or between the spouses, and if they include with their income tax return a copy of that portion of the judgment of divorce that relates to the apportionment of their tax refund, the department shall issue the refund to the person to whom the refund is awarded under the terms of the judgment of divorce or the department shall issue one check to each of the former spouses according to the apportionment terms of the judgment.
71.75(10)
(10) If an income tax refund or tax credit check is payable to a person who dies, the department shall pay the refund or credit check to the decedent's personal representative. If there is no personal representative, the department shall pay the refund or credit check either to a surviving relative, giving preference to relatives in the following order: surviving spouse, child, parent, brother or sister, or to a creditor of the decedent, as determined by the department.
71.75 Cross-reference
Cross-reference: See also s.
Tax 2.085, Wis. adm. code.
71.75 Cross-reference
Cross-reference: See also s.
Tax 2.12, Wis. adm. code.
71.75 Annotation
A party challenging the administration of taxing statutes must exhaust state administrative remedies before commencing an action in state courts under 42 USC 1983. Hogan v. Musolf,
163 Wis. 2d 1,
471 N.W.2d 216 (1991).
71.76
71.76
Internal revenue service and other state adjustments. If for any year the amount of federal net income tax payable, of a credit claimed or carried forward, of a net operating loss carried forward or of a capital loss carried forward of any taxpayer as reported to the internal revenue service is changed or corrected by the internal revenue service or other officer of the United States, such taxpayer shall report such changes or corrections to the department within 90 days after its final determination and shall concede the accuracy of such determination or state how the determination is erroneous. Such changes or corrections need not be reported unless they affect the amount of net tax payable under this chapter, of a credit calculated under this chapter, of a Wisconsin net operating loss carried forward, of a Wisconsin net business loss carried forward or of a capital loss carried forward under this chapter. Any taxpayer submitting an amended return to the internal revenue service, or to another state if there has been allowed a credit against Wisconsin taxes for taxes paid to that state, shall also file, within 90 days of such filing date, an amended return if any information contained on the amended return affects the amount of net tax payable under this chapter of a credit calculated under this chapter, of a Wisconsin net operating loss carried forward, of a Wisconsin net business loss carried forward or of a capital loss carried forward under this chapter.
71.76 Cross-reference
Cross-reference: See also s.
Tax 2.105, Wis. adm. code.
71.77
71.77
Statutes of limitations, assessments and refunds; when permitted. 71.77(1)
(1) Additional assessments and corrections of assessments by office audit or field investigation may be made of income of any taxpayer if notice under
s. 71.74 (11) is given within the time specified in this section.
71.77(2)
(2) With respect to assessments of a tax or an assessment to recover all or part of any tax credit under this chapter in any calendar year or corresponding fiscal year, notice shall be given within 4 years of the date the income tax or franchise tax return was filed.
71.77(2m)
(2m) Notwithstanding
sub. (2), the department of revenue may assess a deficiency related to a contribution to the capital of the taxpayer, as defined in section
118 (c) of the Internal Revenue Code, within 4 years after the department receives notice by the taxpayer, in the manner that the department prescribes, of any of the following:
71.77(2m)(a)
(a) The amount of the expenditure under section
118 (c) (2) (A) of the Internal Revenue Code.
71.77(2m)(b)
(b) The intent of the person against whom the deficiency is to be assessed not to make the expenditure under section
118 (c) (2) (A) of the Internal Revenue Code.
71.77(2m)(c)
(c) Expiration of the time period under section
118 (c) (2) (B) of the Internal Revenue Code and failure of the person against whom the deficiency is to be assessed to make the expenditure under section
118 (c) (2) (B) of the Internal Revenue Code.
71.77(3)
(3) Irrespective of
sub. (2), if any person has filed an incorrect income tax or franchise tax return for any year with intent to defeat or evade the income tax or franchise tax assessment provided by law, or has failed to file any income tax or franchise tax return for any of such years, income of any such year may be assessed when discovered. The department of revenue shall assess the taxes owed for taxable years beginning before January 1, 1990, by using the definition of "Internal Revenue Code" that applied to the year for which the assessment was made, as modified by
P.L. 104-188 and
P.L. 105-34 if
P.L. 104-188 or
P.L. 105-34 applied for federal purposes for that year.
71.77(4)
(4) Irrespective of
sub. (3), if additional assessments are made for any period more than 6 years before the year in which the assessment is made, the burden of proof shall rest with the state to prove its case by a preponderance of the evidence.
71.77(5)
(5) The limitation periods provided in this section may be extended by written agreement between the taxpayer and the department prior to the expiration of such limitation periods or any extension of such limitation periods. During any such extension period, the department may issue an assessment or a refund, and the taxpayer may file a claim for a refund, relating to the year which the extension covers.
Subsection (4) shall not apply to any assessment made in any such extended period. The department of revenue shall assess the taxes owed or compute the refund due for taxable years beginning before January 1, 1990, by using the definition of "Internal Revenue Code" that applied to the year for which the assessment was made, as modified by
P.L. 104-188 and
P.L. 105-34 if
P.L. 104-188 or
P.L. 105-34 applied for federal purposes for that year.
71.77(6)
(6) Section 990.06 shall have no application to the provisions of this section.
71.77(7)
(7) Notwithstanding any other limitations expressed in this chapter, an assessment or refund may be made:
71.77(7)(a)
(a) If notice of assessment is given within 6 years after a return was filed and if on that return the taxpayer reported for taxation, or the taxpayers jointly reported for taxation, less than 75% of the net income properly assessable, except that no assessment of additional income may be made under this subsection for any year beyond the period specified in
sub. (2) unless the aggregate of the taxes on the additional income of such year is in excess of $100 in the case of a return other than a joint return or $200 in the case of a joint return.
71.77(7)(b)
(b) If notice of assessment or refund is given to the taxpayer within 90 days of the date on which the department receives a report from the taxpayer under
s. 71.76 or within such other period specified in a written agreement entered into prior to the expiration of such 90 days by the taxpayer and the department. If the taxpayer does not report to the department as required under
s. 71.76, the department may make an assessment against the taxpayer or refund to the taxpayer within 4 years after discovery by the department.
71.77(8)
(8) For purposes of this section, a return filed on or before the last day prescribed by law for the filing of the return shall be considered as filed on such last day, and a return filed after the last day prescribed by law shall be considered as filed on the date that the return is received by the department of revenue.
71.77 Cross-reference
Cross-reference: See also s.
Tax 2.12, Wis. adm. code.
71.775
71.775
Withholding from nonresident members of pass-through entities. 71.775(1)(a)
(a) "Nonresident" includes an individual who is not domiciled in this state; a partnership, limited liability company, or corporation whose commercial domicile is outside the state; and an estate or a trust that is a nonresident under
s. 71.14 (1) to
(3m).
71.775(1)(b)
(b) "Pass-through entity" means a partnership, a limited liability company, a tax-option corporation, an estate, or a trust that is treated as a pass-through entity for federal income tax purposes.
71.775(2)(a)(a) For the privilege of doing business in this state or deriving income from property located in this state, a pass-through entity that has Wisconsin income for the taxable year that is allocable to a nonresident partner, member, shareholder, or beneficiary shall pay a withholding tax. The amount of the tax imposed under this subsection to be withheld from the income distributable to each nonresident partner, member, shareholder, or beneficiary is equal to the nonresident partner's, member's, shareholder's, or beneficiary's share of income attributable to this state, multiplied by the following:
71.775(2)(a)1.
1. For an individual, an estate, or a trust, the highest tax rate for a single individual for the taxable year under
s. 71.06.
71.775(2)(a)2.
2. For a partnership, a limited liability company, or a corporation, the highest tax rate for the taxable year under
s. 71.27.
71.775(2)(b)
(b) A pass-through entity that is also a member of another pass-through entity is subject to withholding under this subsection and shall pay the tax based on the share of income that is distributable to each of the entity's nonresident partners, members, shareholders, or beneficiaries.
71.775(3)(a)(a) A nonresident partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state shall not be included in determining the withholding under
sub. (2) if any of the following applies:
71.775(3)(a)1.
1. The partner, member, shareholder, or beneficiary is exempt from taxation under this chapter. For purposes of this subdivision, the pass-through entity may rely on a written statement from the partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter, if the pass-through entity attaches a copy of the statement to its return for the taxable year and if the statement specifies the name, address, federal employer identification number, and reason for claiming an exemption for each partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter.
71.775(3)(a)2.
2. The partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state is less than $1,000.
71.775(3)(a)3.
3. The nonresident partner, member, shareholder, or beneficiary files an affidavit with the department, in the form and manner prescribed by the department, whereby the nonresident partner, member, shareholder, or beneficiary agrees to file a Wisconsin income or franchise tax return and be subject to the personal jurisdiction of the department, the tax appeals commission, and the courts of this state for the purpose of determining and collecting Wisconsin income and franchise taxes, including estimated tax payments, together with any related interest and penalties.
71.775(3)(b)
(b) A pass-through entity that is a joint venture is not subject to the withholding under
sub. (2), if the pass-through entity has elected not to be treated as a partnership under section
761 of the Internal Revenue Code.
71.775(3)(cm)
(cm) A pass-through entity that is a publicly traded partnership, as defined under section
7704 (b) of the Internal Revenue Code, that is treated as a partnership under the Internal Revenue Code is not subject to the withholding under
sub. (2), if the entity files with the department an information return that reports the name, address, taxpayer identification number, and any other information requested by the department for each unit holder with an income in this state from the entity in excess of $500.
71.775(4)(a)(a) Each pass-through entity that is subject to the withholding under
sub. (2) shall file an annual return that indicates the withholding amount paid to the state during the pass-through entity's taxable year. The entity shall file the return with the department no later than:
71.775(4)(a)1.
1. For tax-option corporations, the 15th day of the 3rd month following the close of the taxable year.
71.775(4)(a)2.
2. For partnerships, limited liability companies, estates, and trusts, the 15th day of the 4th month following the close of the taxable year.
71.775(4)(bm)1.1. For the return under
par. (a), the department shall allow an automatic extension of 7 months or until the corresponding due date of the pass-through entity's federal income tax return or return of partnership income, whichever is later. Except for payments of estimated taxes, and except as provided in
subd. 2., withholding taxes payable upon filing the return are not delinquent during the extension period but shall be subject to interest at the rate of 12 percent per year during that period.
71.775(4)(bm)2.
2. For taxable years beginning after December 31, 2008, for persons who qualify for a federal extension of time to file under
26 USC 7508A due to a presidentially declared disaster or terroristic or military action, withholding taxes that are otherwise due from a pass-through entity under
sub. (2) are not subject to 12 percent interest as otherwise provided under
subd. 1. during the extension period and for 30 days after the end of the federal extension period.
71.775(4)(bn)
(bn) If a pass-through entity subject to withholding tax under
sub. (2) does not file the return under
par. (a) on or before the extension date provided in
par. (bm), the pass-through entity is liable for the penalty provided in
s. 71.83 (1), in addition to any unpaid tax, interest, and penalty otherwise assessable to a nonresident partner, member, shareholder, or beneficiary on income from the pass-through entity.
71.775(4)(cm)
(cm) Except as provided in
par. (L), pass-through entities shall make estimated payments of the withholding tax under
sub. (2) in 4 installments, on or before the 15th day of each of the following months:
71.775(4)(dm)
(dm) Section 71.29 (3),
(3m),
(4),
(5),
(6), and
(11), as it applies to estimated payments of income and franchise taxes for corporations, also applies to estimated payments of the withholding tax imposed under
sub. (2) for pass-through entities.
71.775(4)(em)
(em) Except as provided in
par. (fm), in the case of any underpayment of estimated withholding taxes under
par. (cm), interest shall be added to the aggregate withholding tax for the taxable year at the rate of 12 percent per year on the amount of the underpayment for the period of the underpayment. In this paragraph, "period of the underpayment" means the time period beginning with the due date of the installment and ending on either the unextended due date of the return under
par. (a) or the date of payment, whichever is earlier. If 90 percent of the tax due under
sub. (2) for the taxable year is not paid by the unextended due date of the return under
par. (a), the difference between that amount and the estimated taxes paid, along with any interest due, shall accrue delinquent interest in the same manner as income and franchise taxes under
s. 71.82 (2) (a).
71.775(4)(fm)
(fm) No interest is required under
par. (em) for a pass-through entity if any of the following conditions apply:
71.775(4)(fm)2.
2. The amount of withholding tax due under
sub. (2) is less than $5,000, the pass-through entity had no withholding tax liability under
sub. (2) for the preceding taxable year, and the preceding taxable year was 12 months.
