HB2518 EnrolledLRB098 10601 HLH 40864 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 5. The Department of Revenue Law of the Civil
5Administrative Code of Illinois is amended by changing Section
62505-310 and by adding Section 2505-255 as follows:
 
7    (20 ILCS 2505/2505-255 new)
8    Sec. 2505-255. Payment by credit card. The Department may
9adopt rules and regulations for payment by credit card of any
10amount due under any Act administered by the Department only
11when the Department is not required to pay a discount fee
12charged by the credit card issuer.
 
13    (20 ILCS 2505/2505-310)  (was 20 ILCS 2505/39b15.2)
14    Sec. 2505-310. Obtaining evidence. The Department has the
15power to expend sums that the Director deems necessary from
16contractual services appropriations for the purchase of
17evidence and for the employment of persons to obtain evidence.
18The sums shall be advanced to investigators authorized by the
19Director to expend funds, on vouchers signed by the Director.
20    In addition, the Director is authorized to maintain one or
21more commercial checking accounts with any State banking
22corporation or corporations organized under or subject to the

 

 

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1Illinois Banking Act for the deposit and withdrawal of moneys
2to be used solely for the purchase of evidence and for the
3employment of persons to obtain evidence. No check may be
4written on nor any withdrawal made from such an account except
5on the written signature of 2 persons designated by the
6Director to write those checks and make those withdrawals. The
7balance of moneys on deposit in any such account shall not
8exceed $25,000 $5,000 at any time, nor shall any one check
9written on or single withdrawal made from any such account
10exceed $25,000 $5,000.
11(Source: P.A. 91-239, eff. 1-1-00.)
 
12    Section 15. The Uniform Penalty and Interest Act is amended
13by changing Sections 3-2 and 3-3 as follows:
 
14    (35 ILCS 735/3-2)  (from Ch. 120, par. 2603-2)
15    Sec. 3-2. Interest.
16    (a) Interest paid by the Department to taxpayers and
17interest charged to taxpayers by the Department shall be paid
18at the annual rate determined by the Department. For periods
19prior to January 1, 2004, and after December 31, 2013, that
20rate shall be the underpayment rate established under Section
216621 of the Internal Revenue Code. For periods after December
2231, 2003, and prior to January 1, 2014, that rate shall be:
23        (1) for the one-year period beginning with the date of
24    underpayment or overpayment, the short-term federal rate

 

 

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1    established under Section 6621 of the Internal Revenue
2    Code.
3        (2) for any period beginning the day after the one-year
4    period described in paragraph (1) of this subsection (a),
5    the underpayment rate established under Section 6621 of the
6    Internal Revenue Code.
7    (b) The interest rate shall be adjusted on a semiannual
8basis, on January 1 and July 1, based upon the underpayment
9rate or short-term federal rate going into effect on that
10January 1 or July 1 under Section 6621 of the Internal Revenue
11Code.
12    (c) This subsection (c) is applicable to returns due on and
13before December 31, 2000. Interest shall be simple interest
14calculated on a daily basis. Interest shall accrue upon tax and
15penalty due. If notice and demand is made for the payment of
16any amount of tax due and if the amount due is paid within 30
17days after the date of such notice and demand, interest under
18this Section on the amount so paid shall not be imposed for the
19period after the date of the notice and demand.
20    (c-5) This subsection (c-5) is applicable to returns due on
21and after January 1, 2001. Interest shall be simple interest
22calculated on a daily basis. Interest shall accrue upon tax
23due. If notice and demand is made for the payment of any amount
24of tax due and if the amount due is paid within 30 days after
25the date of the notice and demand, interest under this Section
26on the amount so paid shall not be imposed for the period after

 

 

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1the date of the notice and demand.
2    (d) No interest shall be paid upon any overpayment of tax
3if the overpayment is refunded or a credit approved within 90
4days after the last date prescribed for filing the original
5return, or within 90 days of the receipt of the processable
6return, or within 90 days after the date of overpayment,
7whichever date is latest, as determined without regard to
8processing time by the Comptroller or without regard to the
9date on which the credit is applied to the taxpayer's account.
10In order for an original return to be processable for purposes
11of this Section, it must be in the form prescribed or approved
12by the Department, signed by the person authorized by law, and
13contain all information, schedules, and support documents
14necessary to determine the tax due and to make allocations of
15tax as prescribed by law. For the purposes of computing
16interest, a return shall be deemed to be processable unless the
17Department notifies the taxpayer that the return is not
18processable within 90 days after the receipt of the return;
19however, interest shall not accumulate for the period following
20this date of notice. Interest on amounts refunded or credited
21pursuant to the filing of an amended return or claim for refund
22shall be determined from the due date of the original return or
23the date of overpayment, whichever is later, to the date of
24payment by the Department without regard to processing time by
25the Comptroller or the date of credit by the Department or
26without regard to the date on which the credit is applied to

 

 

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1the taxpayer's account. If a claim for refund relates to an
2overpayment attributable to a net loss carryback as provided by
3Section 207 of the Illinois Income Tax Act, the date of
4overpayment shall be the last day of the taxable year in which
5the loss was incurred.
6    (e) Interest on erroneous refunds. Any portion of the tax
7imposed by an Act to which this Act is applicable or any
8interest or penalty which has been erroneously refunded and
9which is recoverable by the Department shall bear interest from
10the date of payment of the refund. However, no interest will be
11charged if the erroneous refund is for an amount less than $500
12and is due to a mistake of the Department.
13    (f) If a taxpayer has a tax liability for the taxable
14period ending after June 30, 1983 and prior to July 1, 2002
15that is eligible for amnesty under the Tax Delinquency Amnesty
16Act and the taxpayer fails to satisfy the tax liability during
17the amnesty period provided for in that Act for that taxable
18period, then the interest charged by the Department under this
19Section shall be imposed at a rate that is 200% of the rate
20that would otherwise be imposed under this Section.
21    (g) If a taxpayer has a tax liability for the taxable
22period ending after June 30, 2002 and prior to July 1, 2009
23that is eligible for amnesty under the Tax Delinquency Amnesty
24Act, except for any tax liability reported pursuant to Section
25506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
26is not final, and the taxpayer fails to satisfy the tax

 

 

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1liability during the amnesty period provided for in that Act
2for that taxable period, then the interest charged by the
3Department under this Section shall be imposed in an amount
4that is 200% of the amount that would otherwise be imposed
5under this Section.
6    (h) No interest shall be paid to a taxpayer on any refund
7allowed under the Tax Delinquency Amnesty Act.
8(Source: P.A. 95-331, eff. 8-21-07; 96-1435, eff. 8-16-10.)
 
9    (35 ILCS 735/3-3)  (from Ch. 120, par. 2603-3)
10    Sec. 3-3. Penalty for failure to file or pay.
11    (a) This subsection (a) is applicable before January 1,
121996. A penalty of 5% of the tax required to be shown due on a
13return shall be imposed for failure to file the tax return on
14or before the due date prescribed for filing determined with
15regard for any extension of time for filing (penalty for late
16filing or nonfiling). If any unprocessable return is corrected
17and filed within 21 days after notice by the Department, the
18late filing or nonfiling penalty shall not apply. If a penalty
19for late filing or nonfiling is imposed in addition to a
20penalty for late payment, the total penalty due shall be the
21sum of the late filing penalty and the applicable late payment
22penalty. Beginning on the effective date of this amendatory Act
23of 1995, in the case of any type of tax return required to be
24filed more frequently than annually, when the failure to file
25the tax return on or before the date prescribed for filing

 

 

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1(including any extensions) is shown to be nonfraudulent and has
2not occurred in the 2 years immediately preceding the failure
3to file on the prescribed due date, the penalty imposed by
4Section 3-3(a) shall be abated.
5    (a-5) This subsection (a-5) is applicable to returns due on
6and after January 1, 1996 and on or before December 31, 2000. A
7penalty equal to 2% of the tax required to be shown due on a
8return, up to a maximum amount of $250, determined without
9regard to any part of the tax that is paid on time or by any
10credit that was properly allowable on the date the return was
11required to be filed, shall be imposed for failure to file the
12tax return on or before the due date prescribed for filing
13determined with regard for any extension of time for filing.
14However, if any return is not filed within 30 days after notice
15of nonfiling mailed by the Department to the last known address
16of the taxpayer contained in Department records, an additional
17penalty amount shall be imposed equal to the greater of $250 or
182% of the tax shown on the return. However, the additional
19penalty amount may not exceed $5,000 and is determined without
20regard to any part of the tax that is paid on time or by any
21credit that was properly allowable on the date the return was
22required to be filed (penalty for late filing or nonfiling). If
23any unprocessable return is corrected and filed within 30 days
24after notice by the Department, the late filing or nonfiling
25penalty shall not apply. If a penalty for late filing or
26nonfiling is imposed in addition to a penalty for late payment,

 

 

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1the total penalty due shall be the sum of the late filing
2penalty and the applicable late payment penalty. In the case of
3any type of tax return required to be filed more frequently
4than annually, when the failure to file the tax return on or
5before the date prescribed for filing (including any
6extensions) is shown to be nonfraudulent and has not occurred
7in the 2 years immediately preceding the failure to file on the
8prescribed due date, the penalty imposed by Section 3-3(a-5)
9shall be abated.
10    (a-10) This subsection (a-10) is applicable to returns due
11on and after January 1, 2001. A penalty equal to 2% of the tax
12required to be shown due on a return, up to a maximum amount of
13$250, reduced by any tax that is paid on time or by any credit
14that was properly allowable on the date the return was required
15to be filed, shall be imposed for failure to file the tax
16return on or before the due date prescribed for filing
17determined with regard for any extension of time for filing.
18However, if any return is not filed within 30 days after notice
19of nonfiling mailed by the Department to the last known address
20of the taxpayer contained in Department records, an additional
21penalty amount shall be imposed equal to the greater of $250 or
222% of the tax shown on the return. However, the additional
23penalty amount may not exceed $5,000 and is determined without
24regard to any part of the tax that is paid on time or by any
25credit that was properly allowable on the date the return was
26required to be filed (penalty for late filing or nonfiling). If

 

 

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1any unprocessable return is corrected and filed within 30 days
2after notice by the Department, the late filing or nonfiling
3penalty shall not apply. If a penalty for late filing or
4nonfiling is imposed in addition to a penalty for late payment,
5the total penalty due shall be the sum of the late filing
6penalty and the applicable late payment penalty. In the case of
7any type of tax return required to be filed more frequently
8than annually, when the failure to file the tax return on or
9before the date prescribed for filing (including any
10extensions) is shown to be nonfraudulent and has not occurred
11in the 2 years immediately preceding the failure to file on the
12prescribed due date, the penalty imposed by Section 3-3(a-10)
13shall be abated.
14    (a-15) In addition to any other penalties imposed by law
15for the failure to file a return, a penalty of $100 shall be
16imposed for failure to file a transaction reporting return
17required by Section 3 of the Retailers' Occupation Tax Act and
18Section 9 of the Use Tax Act on or before the date a return is
19required to be filed. This penalty shall be imposed regardless
20of whether the return when properly prepared and filed would
21result in the imposition of a tax.
22    (b) This subsection is applicable before January 1, 1998. A
23penalty of 15% of the tax shown on the return or the tax
24required to be shown due on the return shall be imposed for
25failure to pay:
26        (1) the tax shown due on the return on or before the

 

 

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1    due date prescribed for payment of that tax, an amount of
2    underpayment of estimated tax, or an amount that is
3    reported in an amended return other than an amended return
4    timely filed as required by subsection (b) of Section 506
5    of the Illinois Income Tax Act (penalty for late payment or
6    nonpayment of admitted liability); or
7        (2) the full amount of any tax required to be shown due
8    on a return and which is not shown (penalty for late
9    payment or nonpayment of additional liability), within 30
10    days after a notice of arithmetic error, notice and demand,
11    or a final assessment is issued by the Department. In the
12    case of a final assessment arising following a protest and
13    hearing, the 30-day period shall not begin until all
14    proceedings in court for review of the final assessment
15    have terminated or the period for obtaining a review has
16    expired without proceedings for a review having been
17    instituted. In the case of a notice of tax liability that
18    becomes a final assessment without a protest and hearing,
19    the penalty provided in this paragraph (2) shall be imposed
20    at the expiration of the period provided for the filing of
21    a protest.
22    (b-5) This subsection is applicable to returns due on and
23after January 1, 1998 and on or before December 31, 2000. A
24penalty of 20% of the tax shown on the return or the tax
25required to be shown due on the return shall be imposed for
26failure to pay:

 

 

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1        (1) the tax shown due on the return on or before the
2    due date prescribed for payment of that tax, an amount of
3    underpayment of estimated tax, or an amount that is
4    reported in an amended return other than an amended return
5    timely filed as required by subsection (b) of Section 506
6    of the Illinois Income Tax Act (penalty for late payment or
7    nonpayment of admitted liability); or
8        (2) the full amount of any tax required to be shown due
9    on a return and which is not shown (penalty for late
10    payment or nonpayment of additional liability), within 30
11    days after a notice of arithmetic error, notice and demand,
12    or a final assessment is issued by the Department. In the
13    case of a final assessment arising following a protest and
14    hearing, the 30-day period shall not begin until all
15    proceedings in court for review of the final assessment
16    have terminated or the period for obtaining a review has
17    expired without proceedings for a review having been
18    instituted. In the case of a notice of tax liability that
19    becomes a final assessment without a protest and hearing,
20    the penalty provided in this paragraph (2) shall be imposed
21    at the expiration of the period provided for the filing of
22    a protest.
23    (b-10) This subsection (b-10) is applicable to returns due
24on and after January 1, 2001 and on or before December 31,
252003. A penalty shall be imposed for failure to pay:
26        (1) the tax shown due on a return on or before the due

 

 

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1    date prescribed for payment of that tax, an amount of
2    underpayment of estimated tax, or an amount that is
3    reported in an amended return other than an amended return
4    timely filed as required by subsection (b) of Section 506
5    of the Illinois Income Tax Act (penalty for late payment or
6    nonpayment of admitted liability). The amount of penalty
7    imposed under this subsection (b-10)(1) shall be 2% of any
8    amount that is paid no later than 30 days after the due
9    date, 5% of any amount that is paid later than 30 days
10    after the due date and not later than 90 days after the due
11    date, 10% of any amount that is paid later than 90 days
12    after the due date and not later than 180 days after the
13    due date, and 15% of any amount that is paid later than 180
14    days after the due date. If notice and demand is made for
15    the payment of any amount of tax due and if the amount due
16    is paid within 30 days after the date of the notice and
17    demand, then the penalty for late payment or nonpayment of
18    admitted liability under this subsection (b-10)(1) on the
19    amount so paid shall not accrue for the period after the
20    date of the notice and demand.
21        (2) the full amount of any tax required to be shown due
22    on a return and that is not shown (penalty for late payment
23    or nonpayment of additional liability), within 30 days
24    after a notice of arithmetic error, notice and demand, or a
25    final assessment is issued by the Department. In the case
26    of a final assessment arising following a protest and

 

 

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1    hearing, the 30-day period shall not begin until all
2    proceedings in court for review of the final assessment
3    have terminated or the period for obtaining a review has
4    expired without proceedings for a review having been
5    instituted. The amount of penalty imposed under this
6    subsection (b-10)(2) shall be 20% of any amount that is not
7    paid within the 30-day period. In the case of a notice of
8    tax liability that becomes a final assessment without a
9    protest and hearing, the penalty provided in this
10    subsection (b-10)(2) shall be imposed at the expiration of
11    the period provided for the filing of a protest.
12    (b-15) This subsection (b-15) is applicable to returns due
13on and after January 1, 2004 and on or before December 31,
142004. A penalty shall be imposed for failure to pay the tax
15shown due or required to be shown due on a return on or before
16the due date prescribed for payment of that tax, an amount of
17underpayment of estimated tax, or an amount that is reported in
18an amended return other than an amended return timely filed as
19required by subsection (b) of Section 506 of the Illinois
20Income Tax Act (penalty for late payment or nonpayment of
21admitted liability). The amount of penalty imposed under this
22subsection (b-15)(1) shall be 2% of any amount that is paid no
23later than 30 days after the due date, 10% of any amount that
24is paid later than 30 days after the due date and not later
25than 90 days after the due date, 15% of any amount that is paid
26later than 90 days after the due date and not later than 180

 

 

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1days after the due date, and 20% of any amount that is paid
2later than 180 days after the due date. If notice and demand is
3made for the payment of any amount of tax due and if the amount
4due is paid within 30 days after the date of this notice and
5demand, then the penalty for late payment or nonpayment of
6admitted liability under this subsection (b-15)(1) on the
7amount so paid shall not accrue for the period after the date
8of the notice and demand.
9    (b-20) This subsection (b-20) is applicable to returns due
10on and after January 1, 2005.
11        (1) A penalty shall be imposed for failure to pay,
12    prior to the due date for payment, any amount of tax the
13    payment of which is required to be made prior to the filing
14    of a return or without a return (penalty for late payment
15    or nonpayment of estimated or accelerated tax). The amount
16    of penalty imposed under this paragraph (1) shall be 2% of
17    any amount that is paid no later than 30 days after the due
18    date and 10% of any amount that is paid later than 30 days
19    after the due date.
20        (2) A penalty shall be imposed for failure to pay the
21    tax shown due or required to be shown due on a return on or
22    before the due date prescribed for payment of that tax or
23    an amount that is reported in an amended return other than
24    an amended return timely filed as required by subsection
25    (b) of Section 506 of the Illinois Income Tax Act (penalty
26    for late payment or nonpayment of tax). The amount of

 

 

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1    penalty imposed under this paragraph (2) shall be 2% of any
2    amount that is paid no later than 30 days after the due
3    date, 10% of any amount that is paid later than 30 days
4    after the due date and prior to the date the Department has
5    initiated an audit or investigation of the taxpayer, and
6    20% of any amount that is paid after the date the
7    Department has initiated an audit or investigation of the
8    taxpayer; provided that the penalty shall be reduced to 15%
9    if the entire amount due is paid not later than 30 days
10    after the Department has provided the taxpayer with an
11    amended return (following completion of an occupation,
12    use, or excise tax audit) or a form for waiver of
13    restrictions on assessment (following completion of an
14    income tax audit); provided further that the reduction to
15    15% shall be rescinded if the taxpayer makes any claim for
16    refund or credit of the tax, penalties, or interest
17    determined to be due upon audit, except in the case of a
18    claim filed pursuant to subsection (b) of Section 506 of
19    the Illinois Income Tax Act or to claim a carryover of a
20    loss or credit, the availability of which was not
21    determined in the audit. For purposes of this paragraph
22    (2), any overpayment reported on an original return that
23    has been allowed as a refund or credit to the taxpayer
24    shall be deemed to have not been paid on or before the due
25    date for payment and any amount paid under protest pursuant
26    to the provisions of the State Officers and Employees Money

 

 

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1    Disposition Act shall be deemed to have been paid after the
2    Department has initiated an audit and more than 30 days
3    after the Department has provided the taxpayer with an
4    amended return (following completion of an occupation,
5    use, or excise tax audit) or a form for waiver of
6    restrictions on assessment (following completion of an
7    income tax audit).
8        (3) The penalty imposed under this subsection (b-20)
9    shall be deemed assessed at the time the tax upon which the
10    penalty is computed is assessed, except that, if the
11    reduction of the penalty imposed under paragraph (2) of
12    this subsection (b-20) to 15% is rescinded because a claim
13    for refund or credit has been filed, the increase in
14    penalty shall be deemed assessed at the time the claim for
15    refund or credit is filed.
16    (c) For purposes of the late payment penalties, the basis
17of the penalty shall be the tax shown or required to be shown
18on a return, whichever is applicable, reduced by any part of
19the tax which is paid on time and by any credit which was
20properly allowable on the date the return was required to be
21filed.
22    (d) A penalty shall be applied to the tax required to be
23shown even if that amount is less than the tax shown on the
24return.
25    (e) This subsection (e) is applicable to returns due before
26January 1, 2001. If both a subsection (b)(1) or (b-5)(1)

 

 

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1penalty and a subsection (b)(2) or (b-5)(2) penalty are
2assessed against the same return, the subsection (b)(2) or
3(b-5)(2) penalty shall be assessed against only the additional
4tax found to be due.
5    (e-5) This subsection (e-5) is applicable to returns due on
6and after January 1, 2001. If both a subsection (b-10)(1)
7penalty and a subsection (b-10)(2) penalty are assessed against
8the same return, the subsection (b-10)(2) penalty shall be
9assessed against only the additional tax found to be due.
10    (f) If the taxpayer has failed to file the return, the
11Department shall determine the correct tax according to its
12best judgment and information, which amount shall be prima
13facie evidence of the correctness of the tax due.
14    (g) The time within which to file a return or pay an amount
15of tax due without imposition of a penalty does not extend the
16time within which to file a protest to a notice of tax
17liability or a notice of deficiency.
18    (h) No return shall be determined to be unprocessable
19because of the omission of any information requested on the
20return pursuant to Section 2505-575 of the Department of
21Revenue Law (20 ILCS 2505/2505-575).
22    (i) If a taxpayer has a tax liability for the taxable
23period ending after June 30, 1983 and prior to July 1, 2002
24that is eligible for amnesty under the Tax Delinquency Amnesty
25Act and the taxpayer fails to satisfy the tax liability during
26the amnesty period provided for in that Act for that taxable

 

 

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1period, then the penalty imposed by the Department under this
2Section shall be imposed in an amount that is 200% of the
3amount that would otherwise be imposed under this Section.
4    (j) If a taxpayer has a tax liability for the taxable
5period ending after June 30, 2002 and prior to July 1, 2009
6that is eligible for amnesty under the Tax Delinquency Amnesty
7Act, except for any tax liability reported pursuant to Section
8506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
9is not final, and the taxpayer fails to satisfy the tax
10liability during the amnesty period provided for in that Act
11for that taxable period, then the penalty imposed by the
12Department under this Section shall be imposed in an amount
13that is 200% of the amount that would otherwise be imposed
14under this Section.
15(Source: P.A. 96-1435, eff. 8-16-10.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.