Full Text of SB1641 103rd General Assembly
SB1641enr 103RD GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Uniform Penalty and Interest Act is amended | 5 | | by changing Section 3-3 as follows:
| 6 | | (35 ILCS 735/3-3) (from Ch. 120, par. 2603-3)
| 7 | | Sec. 3-3. Penalty for failure to file or pay.
| 8 | | (a) This subsection (a) is applicable before January 1, | 9 | | 1996. A penalty
of 5% of the tax required to be shown due on a | 10 | | return shall be
imposed for failure to file the tax return on | 11 | | or before the due date prescribed
for filing determined with | 12 | | regard for any extension of time for filing
(penalty
for late | 13 | | filing or nonfiling). If any unprocessable return is corrected | 14 | | and
filed within 21 days after notice by the Department, the | 15 | | late filing or
nonfiling penalty shall not apply. If a penalty | 16 | | for late filing or nonfiling
is imposed in addition to a | 17 | | penalty for late payment, the total penalty due
shall be the | 18 | | sum of the late filing penalty and the applicable late payment
| 19 | | penalty.
Beginning on the effective date of this amendatory | 20 | | Act of 1995, in the case
of any type of tax return required to | 21 | | be filed more frequently
than annually, when the failure to | 22 | | file the tax return on or before the
date prescribed for filing | 23 | | (including any extensions) is shown to be
nonfraudulent and |
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| 1 | | has not occurred in the 2 years immediately preceding the
| 2 | | failure to file on the prescribed due date, the penalty | 3 | | imposed by Section
3-3(a) shall be abated.
| 4 | | (a-5) This subsection (a-5) is applicable to returns due | 5 | | on and after
January 1, 1996 and on or before December 31, | 6 | | 2000.
A penalty equal to 2% of
the tax required to be shown due | 7 | | on a return, up to a maximum amount of $250,
determined without | 8 | | regard to any part of the tax that is paid on time or by any
| 9 | | credit that was properly allowable on the date the return was | 10 | | required to be
filed, shall be
imposed for failure to file the | 11 | | tax return on or before the due date prescribed
for filing | 12 | | determined with regard for any extension of time for filing.
| 13 | | However, if any return is not filed within 30 days after notice | 14 | | of nonfiling
mailed by the Department to the last known | 15 | | address of the taxpayer contained in
Department records, an | 16 | | additional penalty amount shall be imposed equal to the
| 17 | | greater of $250 or 2% of the tax shown on the return. However, | 18 | | the additional
penalty amount may not exceed $5,000 and is | 19 | | determined without regard to any
part of the tax that is paid | 20 | | on time or by any credit that was properly
allowable on the | 21 | | date the return was required to be filed (penalty
for late | 22 | | filing or nonfiling). If any unprocessable return is corrected | 23 | | and
filed within 30 days after notice by the Department, the | 24 | | late filing or
nonfiling penalty shall not apply. If a penalty | 25 | | for late filing or nonfiling
is imposed in addition to a | 26 | | penalty for late payment, the total penalty due
shall be the |
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| 1 | | sum of the late filing penalty and the applicable late payment
| 2 | | penalty.
In the case of any type of tax return required to be | 3 | | filed more frequently
than annually, when the failure to file | 4 | | the tax return on or before the
date prescribed for filing | 5 | | (including any extensions) is shown to be
nonfraudulent and | 6 | | has not occurred in the 2 years immediately preceding the
| 7 | | failure to file on the prescribed due date, the penalty | 8 | | imposed by Section
3-3(a-5) shall be abated.
| 9 | | (a-10) This subsection (a-10) is applicable to returns due | 10 | | on and after
January 1, 2001.
A penalty equal to 2% of
the tax | 11 | | required to be shown due on a return, up to a maximum amount of | 12 | | $250,
reduced by any tax that is
paid on time or by any
credit | 13 | | that was properly allowable on the date the return was | 14 | | required to be
filed, shall be
imposed for failure to file the | 15 | | tax return on or before the due date prescribed
for filing | 16 | | determined with regard for any extension of time for filing.
| 17 | | However, if any return is not filed within 30 days after notice | 18 | | of nonfiling
mailed by the Department to the last known | 19 | | address of the taxpayer contained in
Department records, an | 20 | | additional penalty amount shall be imposed equal to the
| 21 | | greater of $250 or 2% of the tax shown on the return. However, | 22 | | the additional
penalty amount may not exceed $5,000 and is | 23 | | determined without regard to any
part of the tax that is paid | 24 | | on time or by any credit that was properly
allowable on the | 25 | | date the return was required to be filed (penalty
for late | 26 | | filing or nonfiling). If any unprocessable return is corrected |
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| 1 | | and
filed within 30 days after notice by the Department, the | 2 | | late filing or
nonfiling penalty shall not apply. If a penalty | 3 | | for late filing or nonfiling
is imposed in addition to a | 4 | | penalty for late payment, the total penalty due
shall be the | 5 | | sum of the late filing penalty and the applicable late payment
| 6 | | penalty.
In the case of any type of tax return required to be | 7 | | filed more frequently
than annually, when the failure to file | 8 | | the tax return on or before the
date prescribed for filing | 9 | | (including any extensions) is shown to be
nonfraudulent and | 10 | | has not occurred in the 2 years immediately preceding the
| 11 | | failure to file on the prescribed due date, the penalty | 12 | | imposed by this subsection (a-10) shall be abated. This | 13 | | subsection (a-10) does not apply to transaction reporting | 14 | | returns required by Section 3 of the Retailers' Occupation Tax | 15 | | Act and Section 9 of the Use Tax Act that would not, when | 16 | | properly prepared and filed, result in the imposition of a | 17 | | tax; however, those returns are subject to the penalty set | 18 | | forth in subsection (a-15).
| 19 | | (a-15) A penalty of $100 shall be imposed for failure to | 20 | | file a transaction reporting return required by Section 3 of | 21 | | the Retailers' Occupation Tax Act and Section 9 of the Use Tax | 22 | | Act on or before the date a return is required to be filed; | 23 | | provided, however, that this penalty shall be imposed only if | 24 | | the return when properly prepared and filed would not result | 25 | | in the imposition of a tax. If such a transaction reporting | 26 | | return would result in the imposition of a tax when properly |
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| 1 | | prepared and filed, then that return is subject to the | 2 | | provisions of subsection (a-10). | 3 | | (b) This subsection is applicable before January 1, 1998.
| 4 | | A penalty of 15% of the tax shown on the return or the tax | 5 | | required to
be shown due on the return shall be imposed for | 6 | | failure to pay:
| 7 | | (1) the tax shown due on the return on or before the | 8 | | due date prescribed
for payment of that tax, an amount of | 9 | | underpayment of estimated tax, or an
amount that is | 10 | | reported in an amended return other than an amended return
| 11 | | timely filed as required by subsection (b) of Section 506 | 12 | | of the Illinois
Income Tax Act (penalty for late payment | 13 | | or nonpayment of admitted liability);
or
| 14 | | (2) the full amount of any tax required to be shown due | 15 | | on a
return and which is not shown (penalty for late | 16 | | payment or nonpayment of
additional liability), within 30 | 17 | | days after a notice of arithmetic error,
notice and | 18 | | demand, or a final assessment is issued by the Department.
| 19 | | In the case of a final assessment arising following a | 20 | | protest and hearing,
the 30-day period shall not begin | 21 | | until all proceedings in court for review of
the final | 22 | | assessment have terminated or the period for obtaining a | 23 | | review has
expired without proceedings for a review having | 24 | | been instituted. In the case
of a notice of tax liability | 25 | | that becomes a final assessment without a protest
and | 26 | | hearing, the penalty provided in this paragraph (2) shall |
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| 1 | | be imposed at the
expiration of the period provided for | 2 | | the filing of a protest.
| 3 | | (b-5) This subsection is applicable to returns due on and | 4 | | after January
1, 1998 and on or before December 31, 2000.
A | 5 | | penalty of 20% of the tax shown on the return or the tax | 6 | | required to be
shown due on the return shall be imposed for | 7 | | failure to
pay:
| 8 | | (1) the tax shown due on the return on or before the | 9 | | due date prescribed
for payment of that tax, an amount of | 10 | | underpayment of estimated tax, or an
amount that is | 11 | | reported in an amended return other than an amended return
| 12 | | timely filed as required by subsection (b) of Section 506 | 13 | | of the Illinois
Income Tax Act (penalty for late payment | 14 | | or nonpayment of admitted liability);
or
| 15 | | (2) the full amount of any tax required to be shown due | 16 | | on a
return and which is not shown (penalty for late | 17 | | payment or nonpayment of
additional liability), within 30 | 18 | | days after a notice of arithmetic error,
notice and | 19 | | demand, or a final assessment is issued by the Department.
| 20 | | In the case of a final assessment arising following a | 21 | | protest and hearing,
the 30-day period shall not begin | 22 | | until all proceedings in court for review of
the final | 23 | | assessment have terminated or the period for obtaining a | 24 | | review has
expired without proceedings for a review having | 25 | | been instituted. In the case
of a notice of tax liability | 26 | | that becomes a final assessment without a protest
and |
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| 1 | | hearing, the penalty provided in this paragraph (2) shall | 2 | | be imposed at the
expiration of the period provided for | 3 | | the filing of a protest.
| 4 | | (b-10) This subsection (b-10) is applicable to returns due | 5 | | on and after
January 1, 2001 and on or before December 31, | 6 | | 2003. A penalty shall be
imposed for failure to pay:
| 7 | | (1) the tax shown due on a return on or before the due | 8 | | date prescribed for
payment of that tax, an amount of | 9 | | underpayment of estimated tax, or an amount
that is | 10 | | reported in an amended return other than an amended return | 11 | | timely filed
as required by subsection (b) of Section 506 | 12 | | of the Illinois Income Tax Act
(penalty for late payment | 13 | | or nonpayment of admitted liability). The amount of
| 14 | | penalty imposed under this subsection (b-10)(1) shall be | 15 | | 2% of any amount that
is paid no later than 30 days after | 16 | | the due date, 5% of any amount that is
paid later than 30 | 17 | | days after the due date and not later than 90 days after
| 18 | | the due date, 10% of any amount that is paid later than 90 | 19 | | days after the due
date and not later than 180 days after | 20 | | the due date, and 15% of any amount that
is paid later than | 21 | | 180 days after the
due date.
If notice and demand is made | 22 | | for the payment of any amount of tax due and if
the amount | 23 | | due is paid within 30 days after the date of the notice and | 24 | | demand,
then the penalty for late payment or nonpayment of | 25 | | admitted liability under
this subsection (b-10)(1) on the | 26 | | amount so paid shall not accrue for the period
after the |
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| 1 | | date of the notice and demand.
| 2 | | (2) the full amount of any tax required to be shown due | 3 | | on a return and
that is not shown (penalty for late payment | 4 | | or nonpayment of additional
liability), within 30 days | 5 | | after a notice of arithmetic error, notice and
demand, or | 6 | | a final assessment is issued by the Department. In the | 7 | | case of a
final assessment arising following a protest and | 8 | | hearing, the 30-day period
shall not begin until all | 9 | | proceedings in court for review of the final
assessment | 10 | | have terminated or the period for obtaining a review has | 11 | | expired
without proceedings for a review having been | 12 | | instituted. The amount of penalty
imposed under this | 13 | | subsection (b-10)(2) shall be 20% of any amount that is | 14 | | not
paid within the 30-day period. In the case of a notice | 15 | | of tax liability that
becomes a final assessment without a | 16 | | protest and hearing, the penalty provided
in this | 17 | | subsection (b-10)(2) shall be imposed at the expiration of | 18 | | the period
provided for the filing of a protest.
| 19 | | (b-15) This subsection (b-15) is applicable to returns due | 20 | | on and after
January 1, 2004 and on or before December 31, | 21 | | 2004. A penalty shall be imposed for failure to pay the tax | 22 | | shown due or
required to be shown due on a return on or before | 23 | | the due date prescribed for
payment of that tax, an amount of | 24 | | underpayment of estimated tax, or an amount
that is reported | 25 | | in an amended return other than an amended return timely filed
| 26 | | as required by subsection (b) of Section 506 of the Illinois |
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| 1 | | Income Tax Act
(penalty for late payment or nonpayment of | 2 | | admitted liability). The amount of
penalty imposed under this | 3 | | subsection (b-15)(1) shall be 2% of any amount that
is paid no | 4 | | later than 30 days after the due date, 10% of any amount that | 5 | | is
paid later than 30 days after the due date and not later | 6 | | than 90 days after the
due date, 15% of any amount that is paid | 7 | | later than 90 days after the due date
and not later than 180 | 8 | | days after the due date, and 20% of any amount that is
paid | 9 | | later than 180 days after the due date. If notice and demand is | 10 | | made for
the payment of any amount of tax due and if the amount | 11 | | due is paid within 30
days after the date of this notice and | 12 | | demand, then the penalty for late
payment or nonpayment of | 13 | | admitted liability under this subsection (b-15)(1) on
the | 14 | | amount so paid shall not accrue for the period after the date | 15 | | of the notice
and demand.
| 16 | | (b-20) This subsection (b-20) is applicable to returns due | 17 | | on and after January 1, 2005 and before January 1, 2024 . | 18 | | (1) A penalty shall be imposed for failure to pay, | 19 | | prior to the due date for payment, any amount of tax the | 20 | | payment of which is required to be made prior to the filing | 21 | | of a return or without a return (penalty for late payment | 22 | | or nonpayment of estimated or accelerated tax). The amount | 23 | | of penalty imposed under this paragraph (1) shall be 2% of | 24 | | any amount that is paid no later than 30 days after the due | 25 | | date and 10% of any amount that is paid later than 30 days | 26 | | after the due date. |
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| 1 | | (2) A penalty shall be imposed for failure to pay the | 2 | | tax shown due or required to be shown due on a return on or | 3 | | before the due date prescribed for payment of that tax or | 4 | | an amount that is reported in an amended return other than | 5 | | an amended return timely filed as required by subsection | 6 | | (b) of Section 506 of the Illinois Income Tax Act (penalty | 7 | | for late payment or nonpayment of tax). The amount of | 8 | | penalty imposed under this paragraph (2) shall be 2% of | 9 | | any amount that is paid no later than 30 days after the due | 10 | | date, 10% of any amount that is paid later than 30 days | 11 | | after the due date and prior to the date the Department has | 12 | | initiated an audit or investigation of the taxpayer, and | 13 | | 20% of any amount that is paid after the date the | 14 | | Department has initiated an audit or investigation of the | 15 | | taxpayer; provided that the penalty shall be reduced to | 16 | | 15% if the entire amount due is paid not later than 30 days | 17 | | after the Department has provided the taxpayer with an | 18 | | amended return (following completion of an occupation, | 19 | | use, or excise tax audit) or a form for waiver of | 20 | | restrictions on assessment (following completion of an | 21 | | income tax audit); provided further that the reduction to | 22 | | 15% shall be rescinded if the taxpayer makes any claim for | 23 | | refund or credit of the tax, penalties, or interest | 24 | | determined to be due upon audit, except in the case of a | 25 | | claim filed pursuant to subsection (b) of Section 506 of | 26 | | the Illinois Income Tax Act or to claim a carryover of a |
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| 1 | | loss or credit, the availability of which was not | 2 | | determined in the audit. For purposes of this paragraph | 3 | | (2), any overpayment reported on an original return that | 4 | | has been allowed as a refund or credit to the taxpayer | 5 | | shall be deemed to have not been paid on or before the due | 6 | | date for payment and any amount paid under protest | 7 | | pursuant to the provisions of the State Officers and | 8 | | Employees Money Disposition Act shall be deemed to have | 9 | | been paid after the Department has initiated an audit and | 10 | | more than 30 days after the Department has provided the | 11 | | taxpayer with an amended return (following completion of | 12 | | an occupation, use, or excise tax audit) or a form for | 13 | | waiver of restrictions on assessment (following completion | 14 | | of an income tax audit). | 15 | | (3) The penalty imposed under this subsection (b-20) | 16 | | shall be deemed assessed at the time the tax upon which the | 17 | | penalty is computed is assessed, except that, if the | 18 | | reduction of the penalty imposed under paragraph (2) of | 19 | | this subsection (b-20) to 15% is rescinded because a claim | 20 | | for refund or credit has been filed, the increase in | 21 | | penalty shall be deemed assessed at the time the claim for | 22 | | refund or credit is filed.
| 23 | | (b-25) This subsection (b-25) is applicable to returns due | 24 | | on or after January 1, 2024. | 25 | | (1) A penalty shall be imposed for failure to pay, | 26 | | prior to the due date for payment, any amount of tax the |
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| 1 | | payment of which is required to be made prior to the filing | 2 | | of a return or without a return (penalty for late payment | 3 | | or nonpayment of estimated or accelerated tax). The amount | 4 | | of penalty imposed under this paragraph (1) shall be 2% of | 5 | | any amount that is paid no later than 30 days after the due | 6 | | date and 10% of any amount that is paid later than 30 days | 7 | | after the due date. | 8 | | (2) A penalty shall be imposed for failure to pay the | 9 | | tax shown due or required to be shown due on a return on or | 10 | | before the due date prescribed for payment of that tax | 11 | | (penalty for late payment or nonpayment of tax). The | 12 | | amount of penalty imposed under this paragraph (2) shall | 13 | | be 2% of any amount that is paid no later than 30 days | 14 | | after the due date, 10% of any amount that is paid later | 15 | | than 30 days after the due date and prior to the date the | 16 | | Department initiates an audit or investigation of the | 17 | | taxpayer, and 20% of any amount that is paid after the date | 18 | | the Department initiates an audit or investigation of the | 19 | | taxpayer; provided that the penalty shall be reduced to | 20 | | 15% if the entire amount due is paid not later than 30 days | 21 | | after the Department provides the taxpayer with an amended | 22 | | return (following completion of an occupation, use, or | 23 | | excise tax audit) or a form for waiver of restrictions on | 24 | | assessment (following completion of an income tax audit); | 25 | | provided further that the reduction to 15% shall be | 26 | | rescinded if the taxpayer makes any claim for refund or |
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| 1 | | credit of the tax, penalties, or interest determined to be | 2 | | due upon audit, except in the case of a claim filed | 3 | | pursuant to subsection (b) of Section 506 of the Illinois | 4 | | Income Tax Act or to claim a carryover of a loss or credit, | 5 | | the availability of which was not determined in the audit. | 6 | | For purposes of this paragraph (2): | 7 | | (A) any overpayment reported on an original return | 8 | | that has been allowed as a refund or credit to the | 9 | | taxpayer shall be deemed to have not been paid on or | 10 | | before the due date for payment; | 11 | | (B) any amount paid under protest pursuant to the | 12 | | provisions of the State Officers and Employees Money | 13 | | Disposition Act shall be deemed to have been paid | 14 | | after the Department has initiated an audit and more | 15 | | than 30 days after the Department has provided the | 16 | | taxpayer with an amended return (following completion | 17 | | of an occupation, use, or excise tax audit) or a form | 18 | | for waiver of restrictions on assessment (following | 19 | | completion of an income tax audit); and | 20 | | (C) any liability resulting from a federal change | 21 | | required to be reported under subsection (b) of | 22 | | Section 506 of the Illinois Income Tax Act that is | 23 | | reported and paid no later than the due date for filing | 24 | | the federal change amended return shall be deemed to | 25 | | have been paid on or before the due date prescribed for | 26 | | payment. |
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| 1 | | (3) The penalty imposed under this subsection (b-25) shall | 2 | | be deemed assessed at the time the tax upon which the penalty | 3 | | is computed is assessed, except that, if the reduction of the | 4 | | penalty imposed under paragraph (2) of this subsection (b-25) | 5 | | to 15% is rescinded because a claim for refund or credit has | 6 | | been filed, the increase in penalty shall be deemed assessed | 7 | | at the time the claim for refund or credit is filed. | 8 | | (c) For purposes of the late payment penalties, the basis | 9 | | of the penalty
shall be the tax shown or required to be shown | 10 | | on a return, whichever is
applicable, reduced by any part of | 11 | | the tax which is paid on time and by any
credit which was | 12 | | properly allowable on the date the return was required to
be | 13 | | filed.
| 14 | | (d) A penalty shall be applied to the tax required to be | 15 | | shown even if
that amount is less than the tax shown on the | 16 | | return.
| 17 | | (e) This subsection (e) is applicable to returns due | 18 | | before January 1,
2001.
If both a subsection (b)(1) or | 19 | | (b-5)(1) penalty and a subsection (b)(2)
or (b-5)(2) penalty | 20 | | are assessed against the same return, the subsection
(b)(2) or | 21 | | (b-5)(2) penalty shall
be assessed against only the additional | 22 | | tax found to be due.
| 23 | | (e-5) This subsection (e-5) is applicable to returns due | 24 | | on and after
January 1, 2001.
If both a subsection (b-10)(1) | 25 | | penalty and a subsection
(b-10)(2) penalty are assessed | 26 | | against the same return,
the subsection (b-10)(2) penalty |
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| 1 | | shall be assessed against
only the additional tax found to be | 2 | | due.
| 3 | | (f) If the taxpayer has failed to file the return, the | 4 | | Department shall
determine the correct tax according to its | 5 | | best judgment and information,
which amount shall be prima | 6 | | facie evidence of the correctness of the tax due.
| 7 | | (g) The time within which to file a return or pay an amount | 8 | | of tax due
without imposition of a penalty does not extend the | 9 | | time within which to
file a protest to a notice of tax | 10 | | liability or a notice of deficiency.
| 11 | | (h) No return shall be determined to be unprocessable | 12 | | because of the
omission of any information requested on the | 13 | | return pursuant to Section
2505-575
of the Department of | 14 | | Revenue Law (20 ILCS 2505/2505-575).
| 15 | | (i) If a taxpayer has a tax liability for the taxable | 16 | | period ending after June 30,
1983 and prior to July 1, 2002 | 17 | | that is eligible for amnesty under the
Tax Delinquency Amnesty | 18 | | Act and the taxpayer fails to satisfy the tax liability
during | 19 | | the amnesty period provided for in that Act for that taxable | 20 | | period, then the penalty imposed by
the Department under this | 21 | | Section shall be imposed in an amount that is 200% of
the | 22 | | amount that would otherwise be imposed under this Section.
| 23 | | (j) If a taxpayer has a tax liability for the taxable | 24 | | period ending after June 30, 2002 and prior to July 1, 2009 | 25 | | that is eligible for amnesty under the
Tax Delinquency Amnesty | 26 | | Act, except for any tax liability reported pursuant to Section |
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| 1 | | 506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that | 2 | | is not final, and the taxpayer fails to satisfy the tax | 3 | | liability
during the amnesty period provided for in that Act | 4 | | for that taxable period, then the penalty imposed by
the | 5 | | Department under this Section shall be imposed in an amount | 6 | | that is 200% of
the amount that would otherwise be imposed | 7 | | under this Section. | 8 | | (Source: P.A. 98-425, eff. 8-16-13; 99-335, eff. 8-10-15.)
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