| Peoria & Pekin Union Railway Co. v. Department of Revenue, No. 4-97-0786 3rd Dist. 12-18-98 |
No. 4--97--0786
December 18, 1998
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 1998
__________________________________________________________________________ __
| PEORIA and PEKIN UNION RAILWAY COMPANY, Plaintiff-Appellee, v. THE DEPARTMENT OF REVENUE and KENNETH ZEHNDER, Director of the Department of Revenue, Defendants-Appellants. | Appeal from the Circuit Court of the 10th Judicial Circuit, Tazewell County, Illinois No. 96--MR--69 Honorable Donald C. Courson, Judge Presiding. |
JUSTICE BRESLIN delivered the opinion of the court:
On this appeal, the plaintiff, Peoria & Pekin Union Railway Company (railway), argues that the Illinois Department of Revenue (Department) unlawfully sought to recover taxes and penalties for a deficiency from 1988 by employing the federal change provisions of the Illinois Income Tax Act (Act) (35 ILCS 5/101 et seq. (West 1996)) after adjustments were made to its return by the Internal Revenue Service (IRS). We hold that because of the IRS's upward adjustment of the railway's 1988 taxable income, the Department could properly assess the railway for resulting deficiencies. We therefore reverse and reinstate the Department's decision.
I. BACKGROUND
The railway is a railroad operating in Illinois from its principal place of business in Creve Couer. In 1980 the railway entered into an agreement to borrow federal funds for improvements as permitted under the Railroad Revitalization and Regulatory Reform Act (45 U.S.C.