Illinois General Assembly - Illinois Compiled Statutes

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625 ILCS 5/2-124

(625 ILCS 5/2-124) (from Ch. 95 1/2, par. 2-124)

Sec. 2-124.

Audits, interest and penalties.

(a) Audits. The Secretary of State or employees and agents
designated by him, may audit the books, records, tax returns, reports,
and any and all other pertinent records or documents of any person
licensed or registered, or required to be licensed or registered, under
any provisions of this Act, for the purpose of determining whether such
person has not paid any fees or taxes required to be paid to the
Secretary of State and due to the State of Illinois.
For purposes of this Section, "person" means an individual, corporation,
or partnership, or an officer or an employee of any corporation, including
a dissolved corporation, or a member or an employee of any partnership, who
as an officer, employee, or member under a duty to perform the act in
respect to which the violation occurs.

(b) Joint Audits. The Secretary of State may enter into reciprocal
audit agreements with officers, agents or agencies of another State or
States, for joint audits of any person subject to audit under this Act.

(c) Special Audits. If the Secretary of State is not satisfied with
the books, records and documents made available for an audit, or if the
Secretary of State is unable to determine therefrom whether any fees or
taxes are due to the State of Illinois, or if there is cause to believe
that the person audited has declined or refused to supply the books,
records and documents necessary to determine whether a deficiency
exists, the Secretary of State may either seek a court order for
production of any and all books, records and documents he deems relevant
and material, or, in his discretion, the Secretary of State may instead
give written notice to such person requiring him to produce any and all
books, records and documents necessary to properly audit and determine
whether any fees or taxes are due to the State of Illinois. If such
person fails, refuses or declines to comply with either the court order
or written notice within the time specified, the Secretary of State
shall then order a special audit at the expense of the person affected.
Upon completion of the special audit, the Secretary of State shall
determine if any fees or taxes required to be paid under this Act have
not been paid, and make an assessment of any deficiency based upon the
books, records and documents available to him, and in an assessment, he
may rely upon records of other persons having an operation similar to
that of the person audited specially. A person audited specially and
subject to a court order and in default thereof, shall in addition, be
subject to any penalty or punishment imposed by the court entering the
order.

(d) Deficiency; Audit Costs. When a deficiency is found and any fees
or taxes required to be paid under this Act have not been paid to the
State of Illinois, the Secretary of State may impose an audit fee
of $100
per day, or $50 per half-day, per auditor, plus in the case of
out-of-state travel, transportation expenses incurred by the auditor or
auditors. Where more than one person is audited on the same out-of-state
trip, the additional transportation expenses may be apportioned. The
actual costs of a special audit shall be imposed upon the person
audited.

(e) Interest. When a deficiency is found and any fees or taxes
required to be paid under this Act have not been paid to the State of
Illinois, the amount of the deficiency, if greater than $100 for all
registration years examined, shall also bear interest at the
rate of 1/2 of 1% per month or fraction thereof, from the date when the
fee or tax due should have been paid under the provisions of this Act,
subject to a maximum of 6% per annum.

(f) Willful Negligence. When a deficiency is determined by the
Secretary to be caused by the willful neglect or negligence of the
person audited, an additional 10% penalty, that is 10% of the amount of
the deficiency or assessment, shall be imposed, and the 10% penalty
shall bear interest at the rate of 1/2 of 1% on and after the 30th day
after the penalty is imposed until paid in full.

(g) Fraud or Evasion. When a deficiency is determined by the
Secretary to be caused by fraud or willful evasion of the provisions of
this Act, an additional penalty, that is 20% of the amount of the
deficiency or assessment, shall be imposed, and the 20% penalty shall
bear interest at the rate of 1/2 of 1% on and after the 30th day after
the penalty is imposed until paid in full.

(h) Notice. The Secretary of State shall give written notice to any
person audited, of the amount of any deficiency found or assessment
made, of the costs of an audit or special audit, and of the penalty
imposed, and payment shall be made within 30 days of the date of the
notice unless such person petitions for a hearing.

However, except in the case of fraud or willful evasion, or the
inaccessibility of books and records for audit or with the express
consent of the person audited, no notice of a deficiency or assessment
shall be issued by the Secretary for more than 3 registration years.
This limitation shall commence on any January 1 as to calendar year
registrations and on any July 1 as to fiscal year registrations. This
limitation shall not apply for any period during which the person
affected has declined or refuses to make his books and records available
for audit, nor during any period of time in which an Order of any Court
has the effect of enjoining or restraining the Secretary from making an
audit or issuing a notice.
Notwithstanding, each person licensed under the International Registration
Plan and audited by this State or any member jurisdiction shall follow the
assessment and refund procedures as adopted and amended by the International
Registration Plan members.  The Secretary of State shall have the final
decision as to which registrants may be subject to the netting of audit fees as
outlined in the International Registration Plan.  Persons audited may be
subject to a review process to determine the final outcome of the audit
finding.  This process shall follow the adopted procedure as outlined in the
International Registration Plan.  All decisions by the IRP designated tribunal
shall be binding.

(i) Every person subject to licensing or registration and audit
under the provisions of this Chapter shall retain all pertinent
licensing and registration documents, books, records, tax returns,
reports and all supporting records and documents for a period of 4
years.

(j) Hearings. Any person receiving written notice of a deficiency or
assessment may, within 30 days after the date of the notice, petition
for a hearing before the Secretary of State or his duly appointed
hearing officer to contest the audit in whole or in part, and the
petitioner shall simultaneously file a certified check or money order,
or certificate of deposit, or a surety bond approved by the Secretary in
the amount of the deficiency or assessment. Hearings shall be held
pursuant to the provisions of Section 2-118 of this Act.

(k) Judgments. The Secretary of State may enforce any notice of
deficiency or assessment pursuant to the provisions of Section 3-831 of
this Act.

(Source: P.A. 92-69, eff. 7-12-01; 93-32, eff. 7-1-03.)