Public Act 93-0026
SB969 Enrolled LRB093 02878 SJM 02894 b
AN ACT in relation to taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the Tax
Delinquency Amnesty Act.
Section 5. Definitions. As used in this Act:
"Department" means the Illinois Department of Revenue.
"Rules" means any rules adopted or forms prescribed by
the Department.
"Taxable period" means any period of time for which any
tax is imposed by and owed to the State of Illinois.
"Taxpayer" means any person, corporation, or other entity
subject to any tax, except for the motor fuel use tax,
imposed by any law of the State of Illinois and payable to
the State of Illinois.
Section 10. Amnesty program. The Department shall
establish an amnesty program for all taxpayers owing any tax
imposed by reason of or pursuant to authorization by any law
of the State of Illinois and collected by the Department.
The amnesty program shall be for a period from October 1,
2003 through November 15, 2003.
The amnesty program shall provide that, upon payment by a
taxpayer of all taxes due from that taxpayer to the State of
Illinois for any taxable period ending after June 30, 1983
and prior to July 1, 2002, the Department shall abate and not
seek to collect any interest or penalties that may be
applicable and the Department shall not seek civil or
criminal prosecution for any taxpayer for the period of time
for which amnesty has been granted to the taxpayer. Failure
to pay all taxes due to the State for a taxable period shall
invalidate any amnesty granted under this Act. Amnesty shall
be granted only if all amnesty conditions are satisfied by
the taxpayer.
Amnesty shall not be granted to taxpayers who are a party
to any criminal investigation or to any civil or criminal
litigation that is pending in any circuit court or appellate
court or the Supreme Court of this State for nonpayment,
delinquency, or fraud in relation to any State tax imposed by
any law of the State of Illinois.
Voluntary payments made under this Act shall be made by
cash, check, guaranteed remittance, or ACH debit.
The Department shall adopt rules as necessary to
implement the provisions of this Act.
Except as otherwise provided in this Section, all money
collected under this Act that would otherwise be deposited
into the General Revenue Fund shall be deposited as follows:
(i) one-half into the Common School Fund; (ii) one-half into
the General Revenue Fund. Two percent of all money collected
under this Act shall be deposited by the State Treasurer into
the Tax Compliance and Administration Fund and, subject to
appropriation, shall be used by the Department to cover costs
associated with the administration of this Act.
Section 905. The Uniform Penalty and Interest Act is
amended by changing Sections 3-2, 3-3, 3-4, 3-5, 3-6, and
3-7.5 as follows:
(35 ILCS 735/3-2) (from Ch. 120, par. 2603-2)
Sec. 3-2. Interest.
(a) Interest paid by the Department to taxpayers and
interest charged to taxpayers by the Department shall be paid
at the annual rate determined by the Department. That rate
shall be the underpayment rate established under Section 6621
of the Internal Revenue Code.
(b) The interest rate shall be adjusted on a semiannual
basis, on January 1 and July 1, based upon the underpayment
rate going into effect on that January 1 or July 1 under
Section 6621 of the Internal Revenue Code.
(c) This subsection (c) is applicable to returns due on
and before December 31, 2000. Interest shall be simple
interest calculated on a daily basis. Interest shall accrue
upon tax and penalty due. If notice and demand is made for
the payment of any amount of tax due and if the amount due is
paid within 30 days after the date of such notice and demand,
interest under this Section on the amount so paid shall not
be imposed for the period after the date of the notice and
demand.
(c-5) This subsection (c-5) is applicable to returns due
on and after January 1, 2001. Interest shall be simple
interest calculated on a daily basis. Interest shall accrue
upon tax due. If notice and demand is made for the payment
of any amount of tax due and if the amount due is paid within
30 days after the date of the notice and demand, interest
under this Section on the amount so paid shall not be imposed
for the period after the date of the notice and demand.
(d) No interest shall be paid upon any overpayment of
tax if the overpayment is refunded or a credit approved
within 90 days after the last date prescribed for filing the
original return, or within 90 days of the receipt of the
processable return, or within 90 days after the date of
overpayment, whichever date is latest, as determined without
regard to processing time by the Comptroller or without
regard to the date on which the credit is applied to the
taxpayer's account. In order for an original return to be
processable for purposes of this Section, it must be in the
form prescribed or approved by the Department, signed by the
person authorized by law, and contain all information,
schedules, and support documents necessary to determine the
tax due and to make allocations of tax as prescribed by law.
For the purposes of computing interest, a return shall be
deemed to be processable unless the Department notifies the
taxpayer that the return is not processable within 90 days
after the receipt of the return; however, interest shall not
accumulate for the period following this date of notice.
Interest on amounts refunded or credited pursuant to the
filing of an amended return or claim for refund shall be
determined from the due date of the original return or the
date of overpayment, whichever is later, to the date of
payment by the Department without regard to processing time
by the Comptroller or the date of credit by the Department or
without regard to the date on which the credit is applied to
the taxpayer's account. If a claim for refund relates to an
overpayment attributable to a net loss carryback as provided
by Section 207 of the Illinois Income Tax Act, the date of
overpayment shall be the last day of the taxable year in
which the loss was incurred.
(e) Interest on erroneous refunds. Any portion of the
tax imposed by an Act to which this Act is applicable or any
interest or penalty which has been erroneously refunded and
which is recoverable by the Department shall bear interest
from the date of payment of the refund. However, no interest
will be charged if the erroneous refund is for an amount less
than $500 and is due to a mistake of the Department.
(f) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the interest
charged by the Department under this Section shall be imposed
at a rate that is 200% of the rate that would otherwise be
imposed under this Section.
(Source: P.A. 91-803, eff. 1-1-01.)
(35 ILCS 735/3-3) (from Ch. 120, par. 2603-3)
Sec. 3-3. Penalty for failure to file or pay.
(a) This subsection (a) is applicable before January 1,
1996. A penalty of 5% of the tax required to be shown due on
a return shall be imposed for failure to file the tax return
on or before the due date prescribed for filing determined
with regard for any extension of time for filing (penalty for
late filing or nonfiling). If any unprocessable return is
corrected and filed within 21 days after notice by the
Department, the late filing or nonfiling penalty shall not
apply. If a penalty for late filing or nonfiling is imposed
in addition to a penalty for late payment, the total penalty
due shall be the sum of the late filing penalty and the
applicable late payment penalty. Beginning on the effective
date of this amendatory Act of 1995, in the case of any type
of tax return required to be filed more frequently than
annually, when the failure to file the tax return on or
before the date prescribed for filing (including any
extensions) is shown to be nonfraudulent and has not occurred
in the 2 years immediately preceding the failure to file on
the prescribed due date, the penalty imposed by Section
3-3(a) shall be abated.
(a-5) This subsection (a-5) is applicable to returns due
on and after January 1, 1996 and on or before December 31,
2000. A penalty equal to 2% of the tax required to be shown
due on a return, up to a maximum amount of $250, determined
without regard to any part of the tax that is paid on time or
by any credit that was properly allowable on the date the
return was required to be filed, shall be imposed for failure
to file the tax return on or before the due date prescribed
for filing determined with regard for any extension of time
for filing. However, if any return is not filed within 30
days after notice of nonfiling mailed by the Department to
the last known address of the taxpayer contained in
Department records, an additional penalty amount shall be
imposed equal to the greater of $250 or 2% of the tax shown
on the return. However, the additional penalty amount may
not exceed $5,000 and is determined without regard to any
part of the tax that is paid on time or by any credit that
was properly allowable on the date the return was required to
be filed (penalty for late filing or nonfiling). If any
unprocessable return is corrected and filed within 30 days
after notice by the Department, the late filing or nonfiling
penalty shall not apply. If a penalty for late filing or
nonfiling is imposed in addition to a penalty for late
payment, the total penalty due shall be the sum of the late
filing penalty and the applicable late payment penalty. In
the case of any type of tax return required to be filed more
frequently than annually, when the failure to file the tax
return on or before the date prescribed for filing (including
any extensions) is shown to be nonfraudulent and has not
occurred in the 2 years immediately preceding the failure to
file on the prescribed due date, the penalty imposed by
Section 3-3(a-5) shall be abated.
(a-10) This subsection (a-10) is applicable to returns
due on and after January 1, 2001. A penalty equal to 2% of
the tax required to be shown due on a return, up to a maximum
amount of $250, reduced by any tax that is paid on time or by
any credit that was properly allowable on the date the return
was required to be filed, shall be imposed for failure to
file the tax return on or before the due date prescribed for
filing determined with regard for any extension of time for
filing. However, if any return is not filed within 30 days
after notice of nonfiling mailed by the Department to the
last known address of the taxpayer contained in Department
records, an additional penalty amount shall be imposed equal
to the greater of $250 or 2% of the tax shown on the return.
However, the additional penalty amount may not exceed $5,000
and is determined without regard to any part of the tax that
is paid on time or by any credit that was properly allowable
on the date the return was required to be filed (penalty for
late filing or nonfiling). If any unprocessable return is
corrected and filed within 30 days after notice by the
Department, the late filing or nonfiling penalty shall not
apply. If a penalty for late filing or nonfiling is imposed
in addition to a penalty for late payment, the total penalty
due shall be the sum of the late filing penalty and the
applicable late payment penalty. In the case of any type of
tax return required to be filed more frequently than
annually, when the failure to file the tax return on or
before the date prescribed for filing (including any
extensions) is shown to be nonfraudulent and has not occurred
in the 2 years immediately preceding the failure to file on
the prescribed due date, the penalty imposed by Section
3-3(a-10) shall be abated.
(b) This subsection is applicable before January 1,
1998. A penalty of 15% of the tax shown on the return or the
tax required to be shown due on the return shall be imposed
for failure to pay:
(1) the tax shown due on the return on or before
the due date prescribed for payment of that tax, an
amount of underpayment of estimated tax, or an amount
that is reported in an amended return other than an
amended return timely filed as required by subsection (b)
of Section 506 of the Illinois Income Tax Act (penalty
for late payment or nonpayment of admitted liability); or
(2) the full amount of any tax required to be shown
due on a return and which is not shown (penalty for late
payment or nonpayment of additional liability), within 30
days after a notice of arithmetic error, notice and
demand, or a final assessment is issued by the
Department. In the case of a final assessment arising
following a protest and hearing, the 30-day period shall
not begin until all proceedings in court for review of
the final assessment have terminated or the period for
obtaining a review has expired without proceedings for a
review having been instituted. In the case of a notice
of tax liability that becomes a final assessment without
a protest and hearing, the penalty provided in this
paragraph (2) shall be imposed at the expiration of the
period provided for the filing of a protest.
(b-5) This subsection is applicable to returns due on
and after January 1, 1998 and on or before December 31, 2000.
A penalty of 20% of the tax shown on the return or the tax
required to be shown due on the return shall be imposed for
failure to pay:
(1) the tax shown due on the return on or before
the due date prescribed for payment of that tax, an
amount of underpayment of estimated tax, or an amount
that is reported in an amended return other than an
amended return timely filed as required by subsection (b)
of Section 506 of the Illinois Income Tax Act (penalty
for late payment or nonpayment of admitted liability); or
(2) the full amount of any tax required to be shown
due on a return and which is not shown (penalty for late
payment or nonpayment of additional liability), within 30
days after a notice of arithmetic error, notice and
demand, or a final assessment is issued by the
Department. In the case of a final assessment arising
following a protest and hearing, the 30-day period shall
not begin until all proceedings in court for review of
the final assessment have terminated or the period for
obtaining a review has expired without proceedings for a
review having been instituted. In the case of a notice
of tax liability that becomes a final assessment without
a protest and hearing, the penalty provided in this
paragraph (2) shall be imposed at the expiration of the
period provided for the filing of a protest.
(b-10) This subsection (b-10) is applicable to returns
due on and after January 1, 2001. A penalty shall be imposed
for failure to pay:
(1) the tax shown due on a return on or before the
due date prescribed for payment of that tax, an amount of
underpayment of estimated tax, or an amount that is
reported in an amended return other than an amended
return timely filed as required by subsection (b) of
Section 506 of the Illinois Income Tax Act (penalty for
late payment or nonpayment of admitted liability). The
amount of penalty imposed under this subsection (b-10)(1)
shall be 2% of any amount that is paid no later than 30
days after the due date, 5% of any amount that is paid
later than 30 days after the due date and not later than
90 days after the due date, 10% of any amount that is
paid later than 90 days after the due date and not later
than 180 days after the due date, and 15% of any amount
that is paid later than 180 days after the due date. If
notice and demand is made for the payment of any amount
of tax due and if the amount due is paid within 30 days
after the date of the notice and demand, then the penalty
for late payment or nonpayment of admitted liability
under this subsection (b-10)(1) on the amount so paid
shall not accrue for the period after the date of the
notice and demand.
(2) the full amount of any tax required to be shown
due on a return and that is not shown (penalty for late
payment or nonpayment of additional liability), within 30
days after a notice of arithmetic error, notice and
demand, or a final assessment is issued by the
Department. In the case of a final assessment arising
following a protest and hearing, the 30-day period shall
not begin until all proceedings in court for review of
the final assessment have terminated or the period for
obtaining a review has expired without proceedings for a
review having been instituted. The amount of penalty
imposed under this subsection (b-10)(2) shall be 20% of
any amount that is not paid within the 30-day period. In
the case of a notice of tax liability that becomes a
final assessment without a protest and hearing, the
penalty provided in this subsection (b-10)(2) shall be
imposed at the expiration of the period provided for the
filing of a protest.
(c) For purposes of the late payment penalties, the
basis of the penalty shall be the tax shown or required to be
shown on a return, whichever is applicable, reduced by any
part of the tax which is paid on time and by any credit which
was properly allowable on the date the return was required to
be filed.
(d) A penalty shall be applied to the tax required to be
shown even if that amount is less than the tax shown on the
return.
(e) This subsection (e) is applicable to returns due
before January 1, 2001. If both a subsection (b)(1) or
(b-5)(1) penalty and a subsection (b)(2) or (b-5)(2) penalty
are assessed against the same return, the subsection (b)(2)
or (b-5)(2) penalty shall be assessed against only the
additional tax found to be due.
(e-5) This subsection (e-5) is applicable to returns due
on and after January 1, 2001. If both a subsection (b-10)(1)
penalty and a subsection (b-10)(2) penalty are assessed
against the same return, the subsection (b-10)(2) penalty
shall be assessed against only the additional tax found to be
due.
(f) If the taxpayer has failed to file the return, the
Department shall determine the correct tax according to its
best judgment and information, which amount shall be prima
facie evidence of the correctness of the tax due.
(g) The time within which to file a return or pay an
amount of tax due without imposition of a penalty does not
extend the time within which to file a protest to a notice of
tax liability or a notice of deficiency.
(h) No return shall be determined to be unprocessable
because of the omission of any information requested on the
return pursuant to Section 2505-575 of the Department of
Revenue Law (20 ILCS 2505/2505-575).
(i) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the penalty
imposed by the Department under this Section shall be imposed
in an amount that is 200% of the amount that would otherwise
be imposed under this Section.
(Source: P.A. 91-239, eff. 1-1-00; 91-803, eff. 1-1-01;
92-742, eff. 7-25-02.)
(35 ILCS 735/3-4) (from Ch. 120, par. 2603-4)
Sec. 3-4. Penalty for failure to file correct
information returns.
(a) Failure to file correct information returns -
imposition of penalty.
(1) In general. Unless otherwise provided in a tax
Act, in the case of a failure described in paragraph (2)
of this subsection (a) by any person with respect to an
information return, that person shall pay a penalty of $5
for each return or statement with respect to which the
failure occurs, but the total amount imposed on that
person for all such failures during any calendar year
shall not exceed $25,000.
(2) Failures subject to penalty. The following
failures are subject to the penalty imposed in paragraph
(1) of this subsection (a):
(A) any failure to file an information return
with the Department on or before the required filing
date, or
(B) any failure to include all of the
information required to be shown on the return or
the inclusion of incorrect information.
(b) Reduction where correction in specified period.
(1) Correction within 60 days. If any failure
described in subsection (a) (2) is corrected within 60
days after the required filing date:
(A) the penalty imposed by subsection (a)
shall be reduced by 50%; and
(B) the total amount imposed on the person for
all such failures during any calendar year which are
so corrected shall not exceed 50% of the maximum
prescribed in subsection (a) (1).
(c) Information return defined. An information return is
any tax return required by a tax Act to be filed with the
Department that does not, by law, require the payment of a
tax liability.
(d) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the penalty
imposed by the Department under this Section shall be imposed
in an amount that is 200% of the amount that would otherwise
be imposed under this Section.
(Source: P.A. 87-205.)
(35 ILCS 735/3-5) (from Ch. 120, par. 2603-5)
Sec. 3-5. Penalty for negligence.
(a) If any return or amended return is prepared
negligently, but without intent to defraud, and filed, in
addition to any penalty imposed under Section 3-3 of this
Act, a penalty shall be imposed in an amount equal to 20% of
any resulting deficiency.
(b) Negligence includes any failure to make a reasonable
attempt to comply with the provisions of any tax Act and
includes careless, reckless, or intentional disregard of the
law or regulations.
(c) No penalty shall be imposed under this Section if it
is shown that failure to comply with the tax Act is due to
reasonable cause. A taxpayer is not negligent if the
taxpayer shows substantial authority to support the return as
filed.
(d) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the penalty
imposed by the Department shall be imposed in an amount that
is 200% of the amount that would otherwise be imposed in
accordance with this Section.
(Source: P.A. 87-205; 87-1189.)
(35 ILCS 735/3-6) (from Ch. 120, par. 2603-6)
Sec. 3-6. Penalty for fraud.
(a) If any return or amended return is filed with intent
to defraud, in addition to any penalty imposed under Section
3-3 of this Act, a penalty shall be imposed in an amount
equal to 50% of any resulting deficiency.
(b) If any claim is filed with intent to defraud, a
penalty shall be imposed in an amount equal to 50% of the
amount fraudulently claimed for credit or refund.
(c) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the penalty
imposed by the Department under this Section shall be imposed
in an amount that is 200% of the amount that would otherwise
be imposed under this Section.
(Source: P.A. 87-205.)
(35 ILCS 735/3-7.5)
Sec. 3-7.5. Bad check penalty.
(a) In addition to any other penalty provided in this
Act, a penalty of $25 shall be imposed on any person who
issues a check or other draft to the Department that is not
honored upon presentment. The penalty imposed under this
Section shall be deemed assessed at the time of presentment
of the check or other draft and shall be treated for all
purposes, including collection and allocation, as part of the
tax or other liability for which the check or other draft
represented payment.
(b) If a taxpayer has a tax liability that is eligible
for amnesty under the Tax Delinquency Amnesty Act and the
taxpayer fails to satisfy the tax liability during the
amnesty period provided for in that Act, then the penalty
imposed by the Department under this Section shall be imposed
in an amount that is 200% of the amount that would otherwise
be imposed under this Section.
(Source: P.A. 91-803, eff. 1-1-01.)
Section 999. Effective date. This Act takes effect upon
becoming law.