Caveney v. Bower

Plaintiffs, Jack and Margaret Caveney, are shareholders in Panduit Corporation. For the tax years ending December 31, 1993, 1994, and 1995, Panduit elected to be treated as a subchapter S corporation for federal and state tax purposes. During the tax years in question, plaintiffs claimed a credit against their Illinois income tax liability, pursuant to section 201(k) of the Illinois Income Tax Act (the Act) (35 ILCS 5/20l(k) (West 1996)), for research and development expenditures incurred by Panduit. The State disallowed the claims and calculated back taxes and interest in the amount of…