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Section 5747.10 | Amended returns.

Ohio Revised Code
/
Title 57 Taxation
/
Chapter 5747 Income Tax
 
Effective:
April 3, 2023
Latest Legislation:
House Bill 110, Senate Bill 33 - 134th General Assembly
PDF:
Download Authenticated PDF
 

(A) As used in this section:

(1) "Audited partnership" means a partnership subject to an examination by the internal revenue service pursuant to subchapter C, chapter 63, subtitle F of the Internal Revenue Code resulting in a federal adjustment.

(2)(a) "Direct investor" means a partner or other investor that holds a direct interest in a pass-through entity.

(b) "Indirect investor" means a partner or other investor that holds an interest in a pass-through entity that itself holds an interest, directly or through another indirect partner or other investor, in a pass-through entity.

(3) "Exempt partner" means a partner that is neither a pass-through entity nor a person subject to the tax imposed by section 5747.02 of the Revised Code.

(4) "Federal adjustment" means a change to an item or amount required to be determined under the Internal Revenue Code that directly or indirectly affects a taxpayer's aggregate tax liability under section 5747.02 or Chapter 5748. of the Revised Code and that results from an action or examination by the internal revenue service, or from the filing of an amended federal tax return, a claim for a federal tax refund, or an administrative adjustment request filed by a partnership under section 6227 of the Internal Revenue Code.

(5) "Federal adjustments return" means the form or other document prescribed by the tax commissioner for use by a taxpayer in reporting final federal adjustments.

(6) "State partnership representative" means either of the following:

(a) The person who served as the partnership's representative for federal income tax purposes, pursuant to section 6223(a) of the Internal Revenue Code, during the corresponding federal partnership audit;

(b) The person designated, on a form prescribed by the tax commissioner, to serve as the partnership's representative during the state partnership audit. The commissioner may establish reasonable qualifications and procedures for a person to be designated as a state partnership representative under this division.

(7) A federal adjustment is "final" or "agreed to or finally determined for federal income tax purposes" on any of the following:

(a) The day after which the period for appeal of a federal assessment has expired;

(b) The date on a refund check issued by the internal revenue service; or

(c) For agreements required to be signed by the internal revenue service and the taxpayer or audited partnership, the date on which the last party signed the agreement.

(B)(1) If any of the facts, figures, computations, or attachments required in a taxpayer's annual return to determine the tax charged by this chapter or Chapter 5748. of the Revised Code must be altered as the result of a final federal adjustment, and the federal adjustment is not required to be reported under division (C) of this section, the taxpayer shall file an amended return with the tax commissioner in such form as the commissioner requires. The amended return shall be filed not later than ninety days after the federal adjustment has been agreed to or finally determined for federal income tax purposes.

(2) "One hundred eighty" shall be substituted for "ninety" in divisions (B)(1) and (E)(1) of this section if, for any taxable year, the final federal adjustment results from taxes paid by the taxpayer on an amount described in division (A)(32) of section 5747.01 of the Revised Code.

(C) Except for adjustments required to be reported for federal purposes pursuant to section 6225(a)(2) of the Internal Revenue Code and adjustments that are taken into account on a federal amended return or similar report filed pursuant to section 6225(c)(2) of the Internal Revenue Code, partnerships and partners shall report final federal adjustments and make payments as required under division (C) of this section.

(1) With respect to an action required or permitted to be taken by a partnership under this section, and any petition for reassessment or appeal to the board of tax appeals or any court with respect to such an action, the state partnership representative shall have the sole authority to act on behalf of the audited partnership, and the partnership's direct and indirect investors shall be bound by those actions.

(2) Unless an audited partnership makes the election under division (C)(3) of this section:

(a) The audited partnership, through its state partnership representative, shall do all of the following within ninety days after the federal adjustment is final:

(i) File a federal adjustments return with the tax commissioner, including a copy of the notifications provided under division (C)(2)(a)(ii) of this section;

(ii) Notify each of its direct investors, on a form prescribed by the commissioner, of the investor's distributive share of the final federal adjustments;

(iii) File an amended tax return on behalf of its nonresident direct investors and pay any additional tax that would have been due under sections 5733.41 and 5747.41, or division (D) of section 5747.08, of the Revised Code with respect to those direct investors had the final federal adjustments been reported properly on the original filing.

(b) Each direct investor that is subject to the tax imposed by section 5747.02 of the Revised Code shall file an original or amended tax return to include the investor's distributive share of the adjustments reported to the direct investor under division (C)(2)(a) of this section, and pay any additional tax due, within ninety days after the audited partnership files its federal adjustments return with the commissioner.

(c)(i) Each direct and indirect investor of an audited partnership that is a pass-through entity and all investors in such a pass-through entity that are subject to the filing and payment requirements of Chapters 5733. and 5747. of the Revised Code are subject to the reporting and payment requirements of division (C)(2) or, upon a timely election, division (C)(3) of this section.

(ii) Such direct and indirect investors shall make the required returns and payments within ninety days after the deadline for filing and furnishing statements under section 6226(b)(4) of the Internal Revenue Code and applicable treasury regulations.

(3) If an audited partnership makes the election under this division, the audited partnership, through its state partnership representative, shall do all of the following within ninety days after all federal adjustments are final:

(a) File a federal adjustments return with the tax commissioner indicating the partnership has made the election under division (C)(3) of this section;

(b) Pay the amount of combined additional tax due under division (D)(2) of this section, calculated by multiplying the highest rate of tax set forth in section 5747.02 of the Revised Code by the sum of the following:

(i) The distributive shares of the final federal adjustments that are allocable or apportionable to this state of each investor who is a nonresident taxpayer or pass-through entity;

(ii) The distributive share of the final federal adjustments for each investor who is a resident taxpayer.

(c) Notify each of its direct investors, on a form prescribed by the commissioner, of the investor's distributive share of the final federal adjustments and the amount paid on their behalf pursuant to division (C)(3)(b) of this section.

(4)(a) A direct investor of an audited partnership is not required to file an amended return or pay tax otherwise due under section 5747.02 of the Revised Code if the audited partnership properly reports and pays the tax under division (C)(3) of this section.

(b)(i) Nothing in division (C) of this section precludes a direct or indirect investor in the audited partnership from filing a return to report the investor's share of the final federal adjustments. Such an investor who files a return and reports the income related to the final federal adjustments is entitled to a refundable credit for taxes paid by the audited partnership under division (C)(3)(b) of this section. The credit shall be computed and claimed in the same manner as the credit allowed under division (I) of section 5747.08 of the Revised Code.

(ii) Notwithstanding division (C)(4)(b)(i) of this section, an exempt partner, whether a direct or indirect investor, may file an application for refund of its proportionate share of the amounts erroneously paid by the audited partnership pursuant to division (C)(3)(b) of this section on the exempt partner's behalf.

(5) Upon request by an audited partnership, the tax commissioner may agree, in writing, to allow an alternative method of reporting and payment than required by division (C)(2) or (3) of this section. The request must be submitted to the commissioner in writing before the applicable deadline for filing a return under division (C)(2)(a) or (3) of this section. The commissioner's decision on whether to enter into an agreement under this division is not subject to further administrative review or appeal.

(6) Nothing in division (C) of this section precludes either of the following:

(a) A resident taxpayer from filing a return to claim the credit under division (B) of section 5747.05 or division (D)(2) of section 5747.02 of the Revised Code based upon any amounts paid by the audited partnership on such investor's behalf to another state.

(b) The tax commissioner from issuing an assessment under this chapter against any direct or indirect investor for taxes due from the investor if an audited partnership, or direct and indirect investor of an audited partnership that is a pass-through entity, fails to timely file any return or remit any payment required by this section or underreports income or underpays tax on behalf of an indirect investor who is a resident taxpayer.

(D) In the case of an underpayment, and unless otherwise agreed to in writing by the tax commissioner:

(1) The taxpayer's amended return shall be accompanied by payment of any combined additional tax due together with interest thereon. An amended return required by this section is a return subject to assessment under section 5747.13 of the Revised Code for the purpose of assessing any additional tax due under this section, together with any applicable penalty and interest. It shall not reopen those facts, figures, computations, or attachments from a previously filed return no longer subject to assessment that are not affected, either directly or indirectly, by the final federal adjustment to the taxpayer's federal income tax return.

(2) The audited partnership's federal adjustments return shall be accompanied by payment of any combined additional tax due together with interest thereon. The federal adjustments return required by this section is a return subject to assessment under section 5747.13 of the Revised Code for the purpose of assessing any additional tax due under this section, together with any applicable penalty and interest. It shall not reopen those facts, figures, computations, or attachments from a previously filed return no longer subject to assessment that are not affected, either directly or indirectly, by the final federal adjustment.

(3) The tax commissioner may accept estimated payments of the tax arising from pending federal adjustments before the date for filing a federal adjustments return. The commissioner may adopt rules for the payment of such estimated taxes.

(E) In the case of an overpayment, and unless otherwise agreed to in writing by the tax commissioner:

(1) A taxpayer may file an application for refund under this division within the ninety-day period prescribed for filing the amended return even if it is filed beyond the period prescribed in section 5747.11 of the Revised Code if it otherwise conforms to the requirements of such section. An application filed under this division shall claim refund of overpayments resulting from alterations to only those facts, figures, computations, or attachments required in the taxpayer's annual return that are affected, either directly or indirectly, by the final federal adjustment to the taxpayer's federal income tax return unless it is also filed within the time prescribed in section 5747.11 of the Revised Code. It shall not reopen those facts, figures, computations, or attachments that are not affected, either directly or indirectly, by the adjustment to the taxpayer's federal income tax return.

(2)(a) Except as otherwise provided in division (E)(2)(b) of this section, an audited partnership may file an application for a refund under this division within the ninety-day period prescribed for filing the federal adjustments return, even if it is filed beyond the period prescribed by section 5747.11 of the Revised Code, if it otherwise conforms to the requirements of that section. An application filed under this division may claim a refund of overpayments resulting only from final federal adjustments unless it is also filed within the time prescribed by section 5747.11 of the Revised Code. It shall not reopen those facts, figures, computations, or attachments that are not affected, either directly or indirectly, by the federal adjustment.

(b) An audited partnership may not file an application for refund under division (E) of this section based on final federal adjustments described in section 6225(a)(2) of the Internal Revenue Code.

(3) Any refund granted to a pass-through entity filing an application for refund under division (E) of this section shall be reduced by amounts previously claimed as a credit under section 5747.059 or division (I) of section 5747.08 of the Revised Code by the pass-through entity's direct or indirect investors.

(F) Excluding the deadline in division (C)(2)(c)(ii) of this section, an audited partnership, or a direct or indirect investor of an audited partnership that is a pass-through entity, may automatically extend the deadline for reporting, payments, and refunds under this section by sixty days if the entity has ten thousand or more direct investors and notifies the commissioner of such extension, in writing, before the unextended deadline.

Last updated February 7, 2023 at 11:43 AM

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