CR 19-141 Rule Text

- Replace obsolete reference to the IRC and reflect the reference to the IRC is the one in effect for federal tax purposes.

- Replace "Delinquent Tax Collection System" with "Compliance Bureau."

- Reflect that no interest is paid on certain WEDC refunds as provided secs. 71.07, 71.28, and 71.47, Stats., as a result of Wis. Act 59.

- Update due date of installment payments for corporations and extensions of time to file corporation returns as provided in secs. 71.29 and 71.44, Stats., 2017 Wis. Act 2.

- Reflect obtaining Forms WT-4 and WT-4A online.

- Update years.

- Add limitation on credit as provided in sec. 71.07 (7), Stats., as a result of 2017 Wis. Act 59.

- Repeal s. Tax 2.98 (2) (b) (Note 1), (Note 2), and (Note 3) related to disasters occurring prior to 1987.

- Reference the definition of disqualified loss in s. 71.52(1e), Stats, as a result of 2017 Wis. Act 59.

- Repeal s. Tax 14.03 (4) (b) 23. This subdivision was renumbered to 14.03 (4) (c) in CR 00-16. The original subdivision was not deleted.

- Add disqualified losses as provided in sec. 71.52(1e), Stats., as a result of 2017 Wis. Act 59.

Summary of, and comparison with, existing or proposed federal regulation: There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.

Comparison with rules in adjacent states: The department is not aware of a similar rule in an adjacent state.

Summary of factual data and analytical methodologies: 2017 Wisconsin Act 2 and 59 have made changes to Wisconsin's income and franchise tax laws. The department has created this proposed rule order to reflect these statutory changes, as well as provide needed clarification and correction as described above. No other data was used in the preparation of this proposed rule order or this analysis.

Analysis and supporting documents used to determine effect on small business: This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.

Anticipated costs incurred by private sector: This proposed rule does not have a fiscal effect on the private sector.

Effect on small business: This proposed rule does not affect small business.

Agency contact person: Please contact Jen Chadwick at [phone] or [e-mail], if you have any questions regarding this proposed rule.

Place where comments are to be submitted and deadline for submission: Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule is conducted. Information as to the place, date, and time of the public hearing will be published in the Wisconsin Administrative Register.

Jen Chadwick

Department of Revenue

Mail Stop 6-40

2135 Rimrock Road

P.O. Box 8933

Madison, WI 53708-8933

[e-mail]

.

SECTION 1. Tax 1.12 (9) (a) 1. (Note) and 1.13 (1) (b) are amended to read:

  Note: Form EFT-102 should be e-mailed to [e-mail]@wisconsin.gov, faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

(b) The power of attorney requirement applies to income, franchise, alternative minimum, withholding, sales and use, county sales and use, estate, motor fuel, general aviation fuel, special fuel, fermented malt beverage, intoxicating liquor, cigarette and tobacco products tax matters of individuals, partnerships and corporations, including (S) corporations, and homestead and farmland preservation credit matters, and unclaimed property matters.

SECTION 2. Tax 1.13 (3) (a) and (b) are repealed.

SECTION 3. Tax 1.13 (4) (a) and (b) are amended to read:

(a) Form A-222. Wisconsin's Power power of attorney forms form, Form A-222, are is available from the Wisconsin department of revenue's web site or from any Wisconsin department of revenue office. The Wisconsin form, Form A-222, is similar to the federal power of attorney form, Form 2848.

(b) Alternate Form. Use of the Wisconsin power of attorney form is not mandatory. However, the department prefers that this form or another similar form be used. The Wisconsin power of attorney form or substitute form shall clearly express the scope of the authority granted the taxpayer's representative, the Wisconsin tax matters, e.g., income, sales, or franchise tax, covered and the tax year or period to which it relates. An alternative form may be used, but must include the following:

1. Name of representative

2. Clear description of the scope of authority granted to the representative

3. Notarized signature of the taxpayer, except federal Forms 2848 and 8655, SSTGB Form F0023, and other forms approved by the department do not require the signature to be notarized

SECTION 4. Tax 1.13 (4) (c) is created to read:

(c) The Wisconsin power of attorney form or substitute form shall clearly express the scope of the authority granted the taxpayer's representative and the Wisconsin matter covered (e.g., income, sales, or franchise tax or unclaimed property).

SECTION 5. Tax 1.17 is repealed.

SECTION 6. Tax 2.01 is amended to read:

Residence. Individuals claiming a change of residence, i.e., domicile, from Wisconsin to another state shall file form I-827, “Residence Questionnaire", or the “Residence Questionnaire" which is a part of the 1NPR income tax form, with the Wisconsin department of revenue by attaching it to their Wisconsin income tax return for the year they claim to have changed residence, and shall furnish other information the department may require.

SECTION 7. Tax 2.03 (3) (b) 2. a. (Note), 2.04 (2) (d) (Note) and (dm) 1. (Note), (3), (4) (c) and (e), (5), (6) (a), (b), and (c) 1. (Note), (7), and (8) (b) 1. (Note) and (c) 2. (Note) are amended to read:

2.03 (3) (b) 2. a. Note: Form EFT-102 should be e-mailed to [e-mail]@wisconsin.gov, faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

2.04 (2) (d) Note: Forms W-2, 1099-R, 9b, and 1099 that are not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to the department. Forms 9b or substitute forms filed on paper may be mailed to Wisconsin Department of Revenue, PO Box 89328920, Madison, WI 53708-893253708-8920. Other forms may be mailed to Wisconsin Department of Revenue, PO Box 8920, Madison, WI 53708-8920.

(dm) 1. Note: Form EFT-102 should be e-mailed to [e-mail]@wisconsin.gov, faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

(3) Rents and royalties. Under ss. 71.70 and 71.80 (20), Stats., except as provided in par. (d), all persons making payments of rents and royalties of $600 or more to individuals who are residents of Wisconsin, regardless of where the property is located, and to nonresident individuals if the property is located in Wisconsin, shall file with the department, on form Form 9b or an approved substitute form, a statement of payments made in the preceding calendar year. As provided in sub. (6), the department may require such statement be filed electronically. The following shall also apply with respect to rents and royalties:

(a) A copy of federal form Form 1099-MISC may be filed in lieu of Wisconsin form Form 9b.

(b) Corporations shall file the statement with the department by March 15January 31 and payers other than corporations shall file by April 15January 31.

Note: Forms not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to Wisconsin Department of Revenue, PO Box 89328920, Madison, WI 53708-893253708-8920.

(c) No A 30 day extension of time for filing forms Forms 9b or substitute forms to report payments of rents or royalties may be allowed.

(d) The requirement to file form Form 9b or a substitute form does not apply to persons other than corporations who do not deduct the payments in determining Wisconsin taxable income.

(4) (c) The winnings required to be reported in pars. (a) and (b) shall be reported on federal form Form W-2G or on an approved substitute form. As provided in sub. (6), the department may require such form be filed electronically.

(e) No extension of time for filing formsForms W-2G or substitute forms to report payments of lottery prize winnings or pari-mutuel wager winnings may be allowed.

(5) Disallowance of deductions. Items to be reported on formsForms W-2, 1099-R, 9b or substitute forms may be disallowed as deductions from gross income if not properly reported.

(6) Electronic filing requirement.

(a) Under s. 71.80 (20), Stats., if a person is required to file 5010 or more wage statements or 5010 or more of any one type of information return with the department, the person shall file the statements or the returns electronically, by means prescribed by the department.

(b) If a payer participates in the combined federal/state filing program for formsForms 1099, the department shall waive the requirement to file those formsForms 1099 or comparable information returns electronically, unless the form reports Wisconsin withholding.

(c) 1. Note: Form EFT-102 should be e-mailed to [e-mail]@wisconsin.gov, faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

(7) Combined filing program. Payers who participate in the combined federal/state filing program with the internal revenue service and report to the internal revenue service items which are required to be filed on Wisconsin form Form 9b or a substitute form, are not required to file separate information returns for those items with the department of revenue, unless the form reports Wisconsin withholding.

(8) (b) 1. Note: Form EFT-102 should be e-mailed to [e-mail]@wisconsin.gov, faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison, WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

(c) 2. Note: The requirement to file Wisconsin wage statements or information returns electronically for persons required to file 5010 or more wage statements or 5010 or more of any one type of information return with the department is effective January 1, 20102018, as a result of the repeal and recreation amendment of s. 71.80 (20), Stats., by 20092017 Wis. Act 2859.

SECTION 8. Tax 2.07 (2) (g) (Note) and 2.08 (3) (b) are amended to read:

2.07 (2) (g) Note: The federal earned income tax credit, provided under section 32 of the Internal Revenue Code, is available to eligible individuals and married couples filing a joint income tax return, who have at least one qualifying child living with them. The federal credit consists of three parts, as follows: is

A basic credit, computed based on the amount of adjusted gross income or earned income, and whether the individual or couple had no qualifying child, one qualifying child, or two or more qualifying children.

A health insurance credit, computed based on the amount of adjusted gross income or earned income, and the amount paid for health insurance that covered at least one qualifying child.

An extra credit for a child born during the taxable year, computed based on adjusted gross income or earned income.

2.08 (3) (b) Except as provided in pars. (c) and (d), the department may require a tax return preparer or tax preparation firm that prepared the threshold number, as described in subds. 1. to 3., of 50 or more Wisconsin individual income tax returns for the prior taxable year, to file individual income tax returns prepared by that tax return preparer or tax preparation firm electronically. The department shall notify tax return preparers and tax preparation firms by October 1 of any year of the requirement to file electronically. The requirement to file returns electronically shall be effective beginning January 1 of the year following notification. The threshold number of returns prepared in the prior taxable year is as follows:

1. For taxable year 2002, 200 or more returns.

2. For taxable years 2003 through 2009, 100 or more returns.

3. For taxable year 2010 and thereafter, 50 or more returns.

SECTION 9. Tax 2.08 (3) (ci) is created to read:

(ci) Except as provided in par. (d), the department may require the nonresident income or franchise tax withholding return filed by a pass-through entity be filed electronically. The department shall provide notification at least 90 days prior to the due date of the first income or franchise tax withholding return required to be filed electronically of the requirement to file electronically.

SECTION 10. Tax 2.08 (3) (d) 1. (Note) and (e) 2. (Note) are amended to read:

Note: Form EFT-102 should be e-mailed to [e-mail] [e-mail], faxed to [phone], or addressed to Mandate Waiver Request, Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8949, Madison WI 53708-8949. Form EFT-102 may be obtained at http://www.revenue.wi.gov/html/formpub.htmlhttps://www.revenue.wi.gov/Pages/html/formpub.aspx, under either “Tax Return Information" or “Tax Return Guidelines."Tax Return Information."

Note: Section Tax 2.08 interprets ss. 71.01 (5g), 71.03 (2), 71.20 (1), 71.55 (3), 71.738 (2m), and 71.80 (18), Stats.

SECTION 11. Tax 2.105 (4) (b) is amended to read:

(b) Amended returns. If a taxpayer files an amended federal tax return and the changes on the amended federal tax return affect the amount of Wisconsin net franchise or income tax or economic development surcharge payable, the amount of a Wisconsin credit or a Wisconsin net operating loss, net business loss or capital loss carried forward, the taxpayer shall file with the department an amended Wisconsin return reflecting the same changes. A taxpayer filing an amended return with another state shall file an amended Wisconsin return if a credit has been allowed against Wisconsin taxes for taxes paid to that state and if the changes affect the amount of Wisconsin net franchise or income tax or economic development surcharge payable, the amount of a Wisconsin credit or a Wisconsin net operating loss, net business loss or capital loss carried forward. If the changes described in this paragraph relate to income, credits claimed or carried forward, net business losses or net business losses carried forward, capital losses or capital losses carried forward, or any other item that is required to be included in a combined report under s. 71.255 (1) (b), Stats., the designated agent of the combined group shall file an amended combined return. Changes to a net operating or business loss carryforward may not be made unless the change to the incurred loss was computed on a return that was filed within 4 years of the unextended due date for filing the original return for the taxable year in which the loss was incurred. Changes to a net operating or business loss carry-back may not be made unless the change to the loss is claimed within 4 years of the unextended due date for filing the original return for the taxable year to which the loss is carried back. The amended Wisconsin return shall be filed within 90 days after the date the amended return is filed with the internal revenue service or other state.

SECTION 12. Tax 2.12 (3) (c) is amended to read:

(c) An amended Wisconsin return shall be filed with the department if either an amended federal return is filed or an amended return is filed with another state for which a credit for taxes has been allowed against Wisconsin taxes, and the changes to the amended federal or other state return affect the amount of Wisconsin net franchise or income tax or economic development surcharge payable, a Wisconsin credit or a Wisconsin net operating loss, net business loss or capital loss carried forward. Changes to a net operating or business loss carryforward may not be made unless the change to the incurred loss was computed on a return that was filed within 4 years of the unextended due date for filing the original return for the taxable year in which the loss was incurred. Changes to a net operating or business loss carry-back may not be made unless the change to the loss is claimed within 4 years of the unextended due date for filing the original return for the taxable year to which the loss is carried back.

SECTION 13. Tax 2.30 (2) (Example) is amended to read:

Example: For taxable year 19882017, “Internal Revenue Code" means the Internal Revenue Code in effect on December 31, 19872016.

SECTION 14. Tax 2.32 (2) (a) 1., 2., 3., 4., 5. and 6. are amended to read:

(a) 1. Gross receipts or sales reportable on line 1c of federal form Form 1120, U. S. corporation income tax return.

2. Gross dividends reportable on line 4 of federal form Form 1120.

3. Gross interest income reportable on line 5 of federal form Form 1120.