99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2510

 

Introduced 2/9/2016, by Sen. Terry Link

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/503  from Ch. 120, par. 5-503

    Creates the State Tax Preparer Oversight Act. Provides that, for taxable years beginning on or after January 1, 2017, the Department of Revenue shall require any income tax return preparer to include his or her PTIN on any tax return prepared by the income tax return preparer and filed under the Illinois Income Tax Act or any claim for refund of tax imposed by the Illinois Income Tax Act. Provides that the Department shall develop a program using the PTIN as an oversight mechanism to assess returns, to identify high error rates, patterns of suspected fraud, and unsubstantiated basis for tax positions by income tax return preparers. Provides that the Department may bar or suspend a income tax return preparer for good cause. Contains provisions concerning penalties and enforcement. Amends the Illinois Income Tax Act to make conforming changes.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2510LRB099 16233 HLH 40563 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the State
5Tax Preparer Oversight Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Department" means the Department of Revenue.
8    "Income tax return preparer" has the meaning ascribed to
9that term in Section 1501 of the Illinois Income Tax Act.
10    "PTIN" means a Preparer Tax Identification Number, as
11defined in Internal Revenue Service Notice 2011-6.
 
12    Section 10. Powers and duties of the Department.
13    (a) For taxable years beginning on or after January 1,
142017, the Department shall, by rule, require any income tax
15return preparer, as defined in Section 1501 of the Illinois
16Income Tax Act, to include his or her PTIN on any tax return
17prepared by the income tax return preparer and filed under the
18Illinois Income Tax Act or any claim for refund of tax imposed
19by the Illinois Income Tax Act.
20    (b) The Department shall develop and by rule implement a
21program using the PTIN as an oversight mechanism to assess
22returns, to identify high error rates, patterns of suspected

 

 

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1fraud, and unsubstantiated basis for tax positions by income
2tax return preparers.
3    (c) The Department shall, by rule, establish formal and
4regular communication protocols with the Commissioner of the
5Internal Revenue Service to share and exchange PTIN information
6on income tax return preparers who are suspected of fraud,
7disciplined, or barred from filing tax returns with the
8Department or the Internal Revenue Service. The Department may,
9by rule, establish additional communication protocols with
10other states to exchange similar enforcement or discipline
11information.
 
12    Section 15. Enforcement.
13    (a) The Department may investigate the actions of any
14income tax return preparer doing business in the State and may
15bar or suspend an income tax return preparer from filing
16returns with the Department for good cause.
17    (b) In addition to any other penalty provided by law, any
18individual or person violating this Act shall pay a civil
19penalty to the Department in an amount not to exceed $25,000
20for each offense as determined by the Department.
21    (c) The Department shall, before taking any disciplinary
22action against an income tax return preparer under this
23Section, hold a hearing in accordance with this Act. The
24Department shall, at least 30 days before the date set for the
25hearing, (i) notify the accused in writing of the charges made

 

 

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1and the time and place for the hearing on the charges, (ii)
2direct him or her to file a written answer to the charges with
3the Department under oath within 20 days after the service on
4him or her of the notice, and (iii) inform the accused that, if
5he or she fails to answer, disciplinary action shall be taken
6against him or her, as the Department may consider proper.
7    (d) At the time and place fixed in the notice, the
8Department shall proceed to hear the charges and the parties or
9their counsel shall be accorded ample opportunity to present
10any pertinent statements, testimony, evidence, and arguments.
11The Department may continue the hearing from time to time.
12    (e) In case the person, after receiving the notice, fails
13to file an answer, he or she may be subject to the disciplinary
14action set forth in the notice. The written notice may be
15served by registered or certified mail to the person's address
16of record.
17    (f) All final administrative decisions of the Department
18under this Section shall be subject to judicial review pursuant
19to the provisions of the Administrative Review Law. The term
20"administrative decision" is defined as in Section 3-101 of the
21Code of Civil Procedure. Proceedings for judicial review shall
22be commenced in the Circuit Court of the county in which the
23party applying for review resides; provided, that if such party
24is not a resident of this State, the venue shall be in Sangamon
25or Cook County.
26    (g) The Department shall not be required to certify any

 

 

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1record to the court or file any answer in court or otherwise
2appear in any court in a judicial review proceeding, unless and
3until the Department has received from the plaintiff payment of
4the costs of furnishing and certifying the record, which costs
5shall be established by the Department. Exhibits shall be
6certified without cost. Failure on the part of the plaintiff to
7file such receipt in court shall be grounds for dismissal of
8the action.
 
9    Section 20. Rules. The Department shall adopt rules
10consistent with the provisions of this Act for the
11administration and enforcement of this Act.
 
12    Section 85. The Illinois Income Tax Act is amended by
13changing Section 503 as follows:
 
14    (35 ILCS 5/503)  (from Ch. 120, par. 5-503)
15    Sec. 503. Signing of Returns and Notices.
16    (a) Signature presumed authentic. The fact that an
17individual's name is signed to a return or notice shall be
18prima facie evidence for all purposes that such document was
19actually signed by such individual. If a return is prepared by
20an income tax return preparer for a taxpayer, that preparer
21shall sign the return as the preparer of that return and
22include his or her PTIN, as defined in the State Tax Preparer
23Oversight Act, on the return. If a return is transmitted to the

 

 

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1Department electronically, the Department may presume that the
2electronic return originator has obtained and is transmitting a
3valid signature document pursuant to the rules promulgated by
4the Department for the electronic filing of tax returns, or the
5Department may authorize electronic return originators to
6maintain the signature documents and associated documentation,
7subject to the Department's right of inspection at any time
8without notice, rather than transmitting those documents to the
9Department, and the Department may process the return.
10    (b) Corporations. A return or notice required of a
11corporation shall be signed by the president, vice-president,
12treasurer or any other officer duly authorized so to act or, in
13the case of a limited liability company, by a manager or
14member. In the case of a return or notice made for a
15corporation by a fiduciary pursuant to the provisions of
16section 502(b) (4), such fiduciary shall sign such document.
17The fact that an individual's name is signed to a return or
18notice shall be prima facie evidence that such individual is
19authorized to sign such document on behalf of the corporation.
20    (c) Partnerships. A return or notice of a partnership shall
21be signed by any one of the partners or, in the case of a
22limited liability company, by a manager or member. The fact
23that a partner's name is signed to a return or notice shall be
24prima facie evidence that such individual is authorized to sign
25such document on behalf of the partnership or limited liability
26company.

 

 

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1    (d) Joint fiduciaries. A return or notice signed by one of
2two or more joint fiduciaries will comply with the requirements
3of this Act. The fact that a fiduciary's name is signed to such
4document shall be prima facie evidence that such fiduciary is
5authorized to sign such document on behalf of the person from
6whom it is required.
7    (e) Failure to sign a return. If a taxpayer fails to sign a
8return within 30 days after proper notice and demand for
9signature by the Department, the return shall be considered
10valid and any amount shown to be due on the return shall be
11deemed assessed. Any overpayment of tax shown on the face of an
12unsigned return shall be considered forfeited if after notice
13and demand for signature by the Department the taxpayer fails
14to provide a signature and 3 years have passed from the date
15the return was filed. An overpayment of tax refunded to a
16taxpayer whose return was filed electronically shall be
17considered an erroneous refund under Section 912 of this Act
18if, after proper notice and demand by the Department, the
19taxpayer fails to provide a required signature document. A
20notice and demand for signature in the case of a return
21reflecting an overpayment may be made by first class mail. This
22subsection (e) shall apply to all returns filed pursuant to the
23Illinois Income Tax Act since 1969.
24(Source: P.A. 88-480; 88-672, eff. 12-14-94; 89-379, eff.
251-1-96; 89-399, eff. 8-20-95; 89-626, eff. 8-9-96.)