State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Enrolled ][ Senate Amendment 001 ]


92_SB2210eng

 
SB2210 Engrossed                               LRB9212102SMdv

 1        AN ACT regarding taxes.

 2        Be it  enacted  by  the  People  of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Department of Revenue Law of the Civil
 5    Administrative  Code  of  Illinois  is  amended  by  changing
 6    Section 2505-275 as follows:

 7        (20 ILCS 2505/2505-275) (was 20 ILCS 2505/39e)
 8        Sec.  2505-275.  Tax  overpayments.  In   the   case   of
 9    overpayment   of  any  tax  liability  arising  from  an  Act
10    administered by the Department, the Department may credit the
11    amount of the overpayment and any  interest  thereon  against
12    any  final  tax liability arising under that or any other Act
13    administered by the Department. The Department may enter into
14    agreements with the Secretary of the Treasury of  the  United
15    States  (or  his or her delegate) to offset all or part of an
16    overpayment of such a tax  liability  against  any  liability
17    arising  from  a  tax  imposed  under  Title 26 of the United
18    States Code. The  Department  may  collect  a  fee  from  the
19    Secretary of the Treasury of the United States (or his or her
20    delegate)  to  cover  the  full cost of offsets taken, to the
21    extent allowed by federal law, or, if not allowed by  federal
22    law, from the taxpayer by offset of the overpayment.
23    (Source: P.A. 91-239, eff. 1-1-00; 92-492, eff. 1-1-02.)

24        Section  10.   The  Illinois Income Tax Act is amended by
25    changing Sections 601, 911.2, 1102, 1103,  and  1105  and  by
26    adding Section 911.3 as follows:

27        (35 ILCS 5/601) (from Ch. 120, par. 6-601)
28        Sec. 601. Payment on Due Date of Return.
29        (a)  In general. Every taxpayer required to file a return
 
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 1    under  this  Act shall, without assessment, notice or demand,
 2    pay any tax due thereon to the Department, at the place fixed
 3    for filing, on or before  the  date  fixed  for  filing  such
 4    return  (determined  without  regard to any extension of time
 5    for filing the return) pursuant to regulations prescribed  by
 6    the  Department.  If,  however, the due date for payment of a
 7    taxpayer's federal income tax liability for a  tax  year  (as
 8    provided   in  the  Internal  Revenue  Code  or  by  Treasury
 9    regulation, or as extended by the Internal  Revenue  Service)
10    is  later  than  the  date  fixed  for  filing the taxpayer's
11    Illinois income tax return for that tax year, the  Department
12    may,  by  rule,  prescribe a due date for payment that is not
13    later than the due date for payment of the taxpayer's federal
14    income  tax  liability.  For   purposes   of   the   Illinois
15    Administrative  Procedure  Act,  the  adoption  of  rules  to
16    prescribe  a  later  due  date for payment shall be deemed an
17    emergency and necessary for the public interest, safety,  and
18    welfare.
19        (b)  Amount  payable.  In  making  payment as provided in
20    this section there shall remain payable only the  balance  of
21    such tax remaining due after giving effect to the following:
22        (1)  Withheld   tax.   Any  amount  withheld  during  any
23    calendar year pursuant to Article 7 from compensation paid to
24    a taxpayer shall be deemed to have been paid  on  account  of
25    any  tax imposed by subsections 201(a) and (b) of this Act on
26    such taxpayer for his taxable year beginning in such calendar
27    year. If more than one taxable  year  begins  in  a  calendar
28    year,  such  amount  shall  be  deemed  to  have been paid on
29    account of such tax for the last taxable year so beginning.
30        (2)  Estimated and tentative tax payments. Any amount  of
31    estimated  tax paid by a taxpayer pursuant to Article 8 for a
32    taxable year shall be deemed to have been paid on account  of
33    the tax imposed by this Act for such taxable year.
34        (3)  Foreign  tax.  The  aggregate amount of tax which is
 
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 1    imposed upon or measured by income and which  is  paid  by  a
 2    resident  for  a  taxable  year to another state or states on
 3    income  which  is  also  subject  to  the  tax   imposed   by
 4    subsections  201(a)  and  (b)  of  this Act shall be credited
 5    against  the  tax  imposed  by  subsections  201(a)  and  (b)
 6    otherwise due under this  Act  for  such  taxable  year.  The
 7    aggregate  credit  provided  under  this  paragraph shall not
 8    exceed that amount which bears the  same  ratio  to  the  tax
 9    imposed  by  subsections  201(a)  and (b) otherwise due under
10    this Act as the amount of the taxpayer's base income  subject
11    to  tax  both by such other state or states and by this State
12    bears to his total base income subject to tax by  this  State
13    for  the  taxable  year.  For purposes of this subsection, no
14    compensation  received  by  a  resident  which  qualifies  as
15    compensation paid in this State as determined  under  Section
16    304(a)(2)(B)  shall  be  considered  income subject to tax by
17    another  state  or  states.   The  credit  provided  by  this
18    paragraph shall not be allowed  if  any  creditable  tax  was
19    deducted in determining base income for the taxable year. Any
20    person  claiming  such  credit  shall  attach  a statement in
21    support thereof and shall notify the Director of  any  refund
22    or  reductions  in  the  amount  of  tax  claimed as a credit
23    hereunder all  in  such  manner  and  at  such  time  as  the
24    Department shall by regulations prescribe.
25        (4)  Accumulation  and capital gain distributions. If the
26    net income of a taxpayer includes  amounts  included  in  his
27    base  income  by reason of Section 668 or 669 of the Internal
28    Revenue Code  (relating  to  accumulation  and  capital  gain
29    distributions  by  a trust, respectively), the tax imposed on
30    such taxpayer by this Act shall be credited with his pro rata
31    portion of the taxes imposed by this Act on  such  trust  for
32    preceding taxable years which would not have been payable for
33    such   preceding   years  if  the  trust  had  in  fact  made
34    distributions to its beneficiaries at the times  and  in  the
 
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 1    amounts  specified  in  Sections  666 and 669 of the Internal
 2    Revenue Code. The credit provided by this paragraph shall not
 3    reduce the tax otherwise due from the taxpayer to  an  amount
 4    less  than that which would be due if the amounts included by
 5    reason of Sections 668 and 669 of the Internal  Revenue  Code
 6    were excluded from his base income.
 7        (c)  Cross  reference. For application against tax due of
 8    overpayments of tax for a prior year, see Section 909.
 9    (Source: P.A. 85-731.)

10        (35 ILCS 5/911.2)
11        Sec.  911.2.   Refunds  withheld;  tax  claims  of  other
12    states.
13        (a)  Definitions.  In this Section  the  following  terms
14    have the meanings indicated.
15        "Claimant  state"  means  any  state  or  the District of
16    Columbia that requests the withholding of a  refund  pursuant
17    to  this  Section  and  that  extends  a  like comity for the
18    collection of taxes owed to this State.
19        "Income tax" means any amount of income  tax  imposed  on
20    taxpayers  under  the  laws  of  the State of Illinois or the
21    claimant state, including additions to tax for penalties  and
22    interest.
23        "Refund"  means a refund of overpaid income taxes imposed
24    by the State of Illinois or the claimant state.
25        "Tax officer" means a unit or official  of  the  claimant
26    state, or the duly authorized agent of that unit or official,
27    charged  with  the  imposition,  assessment, or collection of
28    state income taxes.
29        "Taxpayer" means any individual person  identified  by  a
30    claimant  state  under  this  Section  as owing taxes to that
31    claimant state, and in the case of a refund arising from  the
32    filing of a joint return, the taxpayer's spouse.
33        (b)  In general.  Except as provided in subsection (c) of
 
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 1    this Section, a tax officer may:
 2             (1)  certify  to  the  Director  the  existence of a
 3        taxpayer's delinquent income tax liability; and
 4             (2)  request the Director to withhold any refund  to
 5        which the taxpayer is entitled.
 6        (c)  Comity.   A  tax  officer may not certify or request
 7    the Director to withhold a refund  unless  the  laws  of  the
 8    claimant state:
 9             (1)  allow  the  Director  to  certify an income tax
10        liability;
11             (2)  allow the Director to request the  tax  officer
12        to withhold the taxpayer's tax refund; and
13             (3)  provide  for  the  payment of the refund to the
14        State of Illinois.
15        (d)  Certification.  A certification by a tax officer  to
16    the Director shall include:
17             (1)  the  full  name and address of the taxpayer and
18        any other names known to be used by the taxpayer;
19             (2)  the  social  security  number  or  federal  tax
20        identification number of the taxpayer;
21             (3)  the amount of the income tax liability; and
22             (4)  a  statement  that   all   administrative   and
23        judicial remedies and appeals have been exhausted or have
24        lapsed  and  that  the  assessment  of tax, interest, and
25        penalty has become final.
26        (e)  Notification.  As to any taxpayer due a refund,  the
27    Director shall:
28             (1)  notify  the  taxpayer that a claimant state has
29        provided certification of the existence of an income  tax
30        liability;
31             (2)  inform   the  taxpayer  of  the  tax  liability
32        certified,  including  a  detailed  statement  for   each
33        taxable year showing tax, interest, and penalty;
34             (3)  inform  the  taxpayer  that  failure  to file a
 
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 1        protest in accordance with subsection (f) of this Section
 2        shall constitute a waiver  of  any  demand  against  this
 3        State for the amount certified;
 4             (3.5)  inform  the taxpayer that the refund has been
 5        withheld and that the tax liability has been paid to  the
 6        claimant  state  as  provided  in  subsection (i) of this
 7        Section and will result in payment to the claimant  state
 8        as provided in subsection (i) of this Section;
 9             (4)  provide   the   taxpayer   with  notice  of  an
10        opportunity  to  request  a  hearing  to  challenge   the
11        certification; and
12             (5)  inform  the  taxpayer  that  the hearing may be
13        requested (i)  pursuant to Section 910 of  this  Act,  or
14        (ii) with the tax officer, in accordance with the laws of
15        the claimant state.
16        (f)  Protest  of withholding.  A taxpayer may protest the
17    withholding of a refund pursuant to Section 910 of  this  Act
18    (except  that the protest shall be filed within 30 days after
19    the date of the Director's notice of  certification  pursuant
20    to  subsection  (e)  of this Section).  If a taxpayer files a
21    timely protest, the Director shall:
22             (1)  suspend the proposed  withholding  and  impound
23        the claimed amount of the refund;
24             (2)  pay to the taxpayer the unclaimed amount of the
25        refund, if any;
26             (3)  send  a  copy  of  the  protest to the claimant
27        state for determination of the protest on its  merits  in
28        accordance with the laws of that state; and
29             (4)  pay  over  to the taxpayer the impounded amount
30        if the claimant state shall fail, within  45  days  after
31        the  date  of  the protest, to re-certify to the Director
32        (i) that the  claimant  state  has  reviewed  the  issues
33        raised  by  taxpayer,  (ii)  that  all administrative and
34        judicial remedies provided under the laws of  that  state
 
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 1        have  been  exhausted, and (iii) the amount of the income
 2        tax liability finally determined to be due.
 3        (g)  Certification  as  prima  facie  evidence.   If  the
 4    taxpayer requests a hearing pursuant to Section 910  of  this
 5    Act,  the  certification  of  the  tax officer shall be prima
 6    facie  evidence  of  the  correctness   of   the   taxpayer's
 7    delinquent income tax liability to the certifying state.
 8        (h)  Rights of spouses to refunds from joint returns.  If
 9    a  certification  is  based  upon  the  tax  debt of only one
10    taxpayer and if the refund is based  upon  a  joint  personal
11    income  tax return, the nondebtor spouse shall have the right
12    to:
13             (1)  notification, as provided in subsection (e)  of
14        this Section;
15             (2)  protest, as to the withholding of such spouse's
16        share  of  the  refund,  as provided in subsection (f) of
17        this Section; and
18             (3)  payment of his or  her  share  of  the  refund,
19        provided  the  amount  of the overpayment refunded to the
20        spouse  shall  not  exceed  the  amount  of   the   joint
21        overpayment.
22        (i)  Withholding  and  payment of refund.  Subject to the
23    taxpayer's rights of notice and protest, Upon  receipt  of  a
24    request  for withholding in accordance with subsection (b) of
25    this Section, the Director shall:
26             (1)  withhold any refund that is  certified  by  the
27        tax officer;
28             (2)  pay  to the claimant state the entire refund or
29        the amount certified, whichever is less;
30             (3)  pay  any  refund  in  excess  of   the   amount
31        certified to the taxpayer; and
32             (4)  if  a refund is less than the amount certified,
33        withhold  amounts  from  subsequent   refunds   due   the
34        taxpayer,  if the laws of the claimant state provide that
 
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 1        the claimant state shall withhold subsequent  refunds  of
 2        taxpayers certified to that state by the Director.
 3        (j)  Determination   that  withholding  cannot  be  made.
 4    After receiving a  certification  from  a  tax  officer,  the
 5    Director  shall  notify  the  claimant  state if the Director
 6    determines that a withholding cannot be made.
 7        (k)  Director's authority.  The Director shall  have  the
 8    authority  to  enter into agreements with the tax officers of
 9    claimant state relating to:
10             (1)  procedures and methods  to  be  employed  by  a
11        claimant  state  with  respect  to  the operation of this
12        Section;
13             (2)  safeguards   against    the    disclosure    or
14        inappropriate   use   of   any  information  obtained  or
15        maintained pursuant  to  this  Section  that  identifies,
16        directly or indirectly, a particular taxpayer;
17             (3)  a  minimum  tax  debt,  amounts below which, in
18        light of administrative expenses and  efficiency,  shall,
19        in  the  Director's  discretion,  not  be  subject to the
20        withholding procedures set forth in this Section.
21        (l)  Remedy not  exclusive.   The  collection  procedures
22    prescribed  by  this  Section  are in addition to, and not in
23    substitution for, any other remedy available by law.
24    (Source: P.A. 92-492, eff. 1-1-02.)

25        (35 ILCS 5/911.3 new)
26        Sec. 911.3. Refunds withheld; order of honoring requests.
27    The Department shall honor refund withholding requests in the
28    following order:
29             (1)  a refund  withholding  request  to  collect  an
30        unpaid State tax;
31             (2)  a   refund   withholding   request  to  collect
32        certified past due child support  amounts  under  Section
33        2505-650  of  the  Department of Revenue Law of the Civil
 
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 1        Administrative Code of Illinois;
 2             (3)  a refund withholding  request  to  collect  any
 3        debt owed to the State;
 4             (4)  a   refund  withholding  request  made  by  the
 5        Secretary of the Treasury of the United States, or his or
 6        her delegate, to collect any tax liability  arising  from
 7        Title 26 of the United States Code; and
 8             (5)  a   refund   withholding  request  pursuant  to
 9        Section 911.2 of this Act.

10        (35 ILCS 5/1102) (from Ch. 120, par. 11-1102)
11        Sec. 1102. Jeopardy Assessments.
12        (a)  Jeopardy assessment and lien.
13             (1)  Assessment. If  the  Department  finds  that  a
14        taxpayer is about to depart from the State, or to conceal
15        himself  or  his property, or to do any other act tending
16        to prejudice or to render wholly  or  partly  ineffectual
17        proceedings  to  collect  any  amount of tax or penalties
18        imposed under  this  Act  unless  court  proceedings  are
19        brought  without  delay,  or if the Department finds that
20        the collection of such  amount  will  be  jeopardized  by
21        delay,  the  Department shall give the taxpayer notice of
22        such findings and shall make demand for immediate  return
23        and  payment  of such amount, whereupon such amount shall
24        be deemed assessed and shall become immediately  due  and
25        payable.
26             (2)  Filing  of lien. If the taxpayer, within 5 days
27        after such notice (or within such extension  of  time  as
28        the  Department  may  grant),  does  not comply with such
29        notice or show to the Department  that  the  findings  in
30        such  notice  are  erroneous,  the  Department may file a
31        notice of jeopardy assessment lien in the office  of  the
32        recorder  of  the  county  in  which  any property of the
33        taxpayer may be located and shall notify the taxpayer  of
 
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 1        such filing. Such jeopardy assessment lien shall have the
 2        same scope and effect as a statutory lien under this Act.
 3        The taxpayer is liable for the filing fee incurred by the
 4        Department  for  filing  the  lien  and  the  filing  fee
 5        incurred  by  the  Department to file the release of that
 6        lien. The filing fees shall be paid to the Department  in
 7        addition  to  payment  of  the tax, penalty, and interest
 8        included in the amount of the lien.
 9        (b)  Termination of taxable year. In the case  of  a  tax
10    for  a  current  taxable year, the Director shall declare the
11    taxable period of the taxpayer immediately terminated and his
12    notice and demand for a return and immediate payment  of  the
13    tax shall relate to the period declared terminated, including
14    therein income accrued and deductions incurred up to the date
15    of  termination  if  not  otherwise  properly  includible  or
16    deductible in respect of such taxable year.
17        (c)  Protest.  If  the taxpayer believes that he does not
18    owe some  or  all  of  the  amount  for  which  the  jeopardy
19    assessment  lien  against  him  has  been  filed,  or that no
20    jeopardy to the revenue in fact exists, he may protest within
21    20 days after being notified by the Department of the  filing
22    of  such  jeopardy  assessment  lien  and  request a hearing,
23    whereupon the Department shall hold a hearing  in  conformity
24    with  the  provisions  of  section 908 and, pursuant thereto,
25    shall notify the taxpayer of its decision as  to  whether  or
26    not such jeopardy assessment lien will be released.
27    (Source: P.A. 83-358.)

28        (35 ILCS 5/1103) (from Ch. 120, par. 11-1103)
29        Sec. 1103.  Filing and Priority of Liens. (a) Filing with
30    Recorder.  Nothing in this Article shall be construed to give
31    the Department a preference over the rights of any bona  fide
32    purchaser,  holder  of a security interest, mechanics lienor,
33    mortgagee, or judgment lien creditor  arising  prior  to  the
 
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 1    filing  of  a  regular notice of lien or a notice of jeopardy
 2    assessment lien in the office of the recorder in  the  county
 3    in  which  the  property  subject to the lien is located. For
 4    purposes of this section, the term  "bona  fide,"  shall  not
 5    include  any  mortgage  of  real  or personal property or any
 6    other credit transaction that results in the mortgagee or the
 7    holder of  the  security  acting  as  trustee  for  unsecured
 8    creditors of the taxpayer mentioned in the notice of lien who
 9    executed  such  chattel  or  real  property  mortgage  or the
10    document evidencing such credit transaction. Such lien  shall
11    be inferior to the lien of general taxes, special assessments
12    and  special  taxes  heretofore  or  hereafter  levied by any
13    political subdivision of this State.
14        (b)  Filing with Registrar. In case title to land  to  be
15    affected  by  the  notice  of  lien  or  notice  of  jeopardy
16    assessment lien is registered under the provisions of "An Act
17    concerning  land  titles,"  approved May 1, 1897, as amended,
18    such notice shall be filed in the office of the Registrar  of
19    Titles of the county within which the property subject to the
20    lien  is  situated  and shall be entered upon the register of
21    titles as a memorial  of  charge  upon  each  folium  of  the
22    register   of   titles  affected  by  such  notice,  and  the
23    Department shall not have a preference over the rights of any
24    bona fide purchaser, mortgagee, judgment  creditor  or  other
25    lien holder arising prior to the registration of such notice.
26        (c)  Index.  The  recorder of each county shall procure a
27    file labeled "State Tax  Lien  Notices"  and  an  index  book
28    labeled  "State  Tax  Lien Index." When notice of any lien or
29    jeopardy assessment lien is presented to him for  filing,  he
30    shall  file it in numerical order in the file and shall enter
31    it alphabetically in the index. The entry shall show the name
32    and last known address of the person named in the notice, the
33    serial number of the notice, the date  and  hour  of  filing,
34    whether  it  is a regular lien or a jeopardy assessment lien,
 
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 1    and the amount of tax and penalty due and  unpaid,  plus  the
 2    amount of interest due at the time when the notice of lien or
 3    jeopardy assessment is filed.
 4        (d)  No  recorder  or  registrar  of titles of any county
 5    shall require that the Department pay any costs  or  fees  in
 6    connection  with  recordation of any notice or other document
 7    filed by the Department under  this  Act  at  the  time  such
 8    notice  or  other  document is presented for recordation. The
 9    recorder or registrar of each county,  in  order  to  receive
10    payment  for  fees or costs incurred by the Department, shall
11    present the Department with monthly statements indicating the
12    amount of fees and costs incurred by the Department  and  for
13    which  no  payment  has been received. This amendatory Act of
14    1987 applies to all liens heretofore or hereafter filed.
15        (e)  The taxpayer is liable for the filing  fee  incurred
16    by  the  Department  for  filing  the lien and the filing fee
17    incurred by the Department to file the release of that  lien.
18    The  filing  fees shall be paid to the Department in addition
19    to payment of the tax, penalty, and interest included in  the
20    amount of the lien.
21    (Source: P.A. 86-905.)

22        (35 ILCS 5/1105) (from Ch. 120, par. 11-1105)
23        Sec. 1105. Release of Liens.
24        (a)  In  general.  Upon  payment  by  the taxpayer to the
25    Department in cash or by guaranteed remittance of  an  amount
26    representing the filing fees and charges for the lien and the
27    filing  fees  and  charges  for the release of that lien, the
28    Department shall release all or any portion of  the  property
29    subject  to  any  lien provided for in this Act and file that
30    complete or partial release of lien with the recorder of  the
31    county  where  that  lien was filed if it determines that the
32    release will not endanger or jeopardize the collection of the
33    amount secured thereby.
 
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 1        (b)  Judicial determination. If on  judicial  review  the
 2    final judgment of the court is that the taxpayer does not owe
 3    some or all of the amount secured by the lien against him, or
 4    that  no jeopardy to the revenue exists, the Department shall
 5    release  its  lien  to  the  extent  of   such   finding   of
 6    nonliability, or to the extent of such finding of no jeopardy
 7    to  the  revenue.  The taxpayer shall, however, be liable for
 8    the filing fee paid by the Department to file  the  lien  and
 9    the  filing  fee  required to file a release of the lien. The
10    filing fees shall be paid to the Department.
11        (c)  Payment.  The  Department  shall  also  release  its
12    jeopardy assessment lien against the  taxpayer  whenever  the
13    tax and penalty covered by such lien, plus any interest which
14    may  be due and an amount representing the filing fee to file
15    the lien and the filing fee required to  file  a  release  of
16    that lien, are paid by the taxpayer to the Department in cash
17    or by guaranteed remittance.
18        (d)  Certificate of release. The Department shall issue a
19    certificate  of  complete or partial release of the lien upon
20    payment by the taxpayer to  the  Department  in  cash  or  by
21    guaranteed  remittance  of  an amount representing the filing
22    fee paid by the Department to file the lien  and  the  filing
23    fee required to file the release of that lien:
24        (1)  To  the  extent  that  the  fair market value of any
25    property subject to the lien exceeds the amount of  the  lien
26    plus the amount of all prior liens upon such property;
27        (2)  To   the   extent   that   such  lien  shall  become
28    unenforceable;
29        (3)  To the extent that the amount of such lien  is  paid
30    by  the  person  whose  property  is  subject  to  such lien,
31    together with any interest and penalty which may  become  due
32    under  this  Act  between the date when the notice of lien is
33    filed and the date when the amount of such lien is paid;
34        (4)  To  the  extent  that  there  is  furnished  to  the
 
SB2210 Engrossed            -14-               LRB9212102SMdv
 1    Department on a form to be approved  and  with  a  surety  or
 2    sureties  satisfactory  to  the  Department  a  bond  that is
 3    conditioned upon the payment of  the  amount  of  such  lien,
 4    together  with  any  interest which may become due under this
 5    Act after the notice of lien is filed, but before the  amount
 6    thereof is fully paid;
 7        (5)  To  the extent and under the circumstances specified
 8    in this section. A certificate of complete or partial release
 9    of any lien shall be held conclusive that the lien  upon  the
10    property  covered  by  the certificate is extinguished to the
11    extent indicated by such certificate.
12        Such release of lien shall be issued to  the  person,  or
13    his  agent,  against  whom  the  lien  was obtained and shall
14    contain in legible letters a statement as follows:
15        FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
16        BE FILED WITH THE RECORDER OR THE REGISTRAR
17        OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
18        (e)  Filing. When a certificate of  complete  or  partial
19    release  of  lien  issued  by the Department is presented for
20    filing in the office of the recorder or Registrar  of  Titles
21    where  a notice of lien or notice of jeopardy assessment lien
22    was filed:
23        (1)  The recorder, in the case of nonregistered property,
24    shall permanently attach the certificate of  release  to  the
25    notice  of  lien  or  notice  of jeopardy assessment lien and
26    shall enter the certificate of release and the  date  in  the
27    "State  Tax  Lien Index" on the line where the notice of lien
28    or notice of jeopardy assessment lien is entered; and
29        (2)  In the case of registered property, the Registrar of
30    Titles shall file and enter upon each folium of the  register
31    of  titles  affected thereby a memorial of the certificate of
32    release which memorial when so entered shall act as a release
33    pro tanto of any memorial of such notice of lien or notice of
34    jeopardy assessment lien previously filed and registered.
 
SB2210 Engrossed            -15-               LRB9212102SMdv
 1    (Source: P.A. 85-731.)

 2        Section 15.  The Retailers' Occupation Tax Act is amended
 3    by changing Sections 5a, 5b, and 5c as follows:

 4        (35 ILCS 120/5a) (from Ch. 120, par. 444a)
 5        Sec. 5a.  The Department shall have a lien  for  the  tax
 6    herein  imposed  or  any  portion thereof, or for any penalty
 7    provided for in this Act, or for any amount of interest which
 8    may be due as provided for in Section 5 of this Act, upon all
 9    the real and personal property of any person to whom a  final
10    assessment  or  revised  final  assessment has been issued as
11    provided in this Act, or whenever a return is  filed  without
12    payment  of  the  tax  or  penalty  shown  therein to be due,
13    including all such property of such  persons  acquired  after
14    receipt  of  such  assessment  or  filing of such return. The
15    taxpayer is  liable  for  the  filing  fee  incurred  by  the
16    Department for filing the lien and the filing fee incurred by
17    the  Department  to file the release of that lien. The filing
18    fees shall be paid to the Department in addition  to  payment
19    of  the  tax, penalty, and interest included in the amount of
20    the lien.
21        However, where the lien arises because of the issuance of
22    a  final  assessment  or  revised  final  assessment  by  the
23    Department,  such  lien  shall  not  attach  and  the  notice
24    hereinafter referred to in this Section shall  not  be  filed
25    until  all  proceedings  in  court  for  review of such final
26    assessment or revised final assessment have terminated or the
27    time  for  the  taking  thereof  has  expired  without   such
28    proceedings being instituted.
29        Upon  the  granting of a rehearing or departmental review
30    pursuant to Section 4 or Section 5 of this Act after  a  lien
31    has  attached, such lien shall remain in full force except to
32    the extent to which the final assessment may be reduced by  a
 
SB2210 Engrossed            -16-               LRB9212102SMdv
 1    revised final assessment following such rehearing or review.
 2        The  lien  created  by the issuance of a final assessment
 3    shall terminate unless a notice of lien is filed, as provided
 4    in Section 5b hereof,  within  3  years  from  the  date  all
 5    proceedings  in court for the review of such final assessment
 6    have terminated or  the  time  for  the  taking  thereof  has
 7    expired without such proceedings being instituted, or (in the
 8    case  of  a  revised  final  assessment  issued pursuant to a
 9    rehearing or departmental review) within  3  years  from  the
10    date  all proceedings in court for the review of such revised
11    final assessment have terminated or the time for  the  taking
12    thereof   has   expired   without   such   proceedings  being
13    instituted; and where the lien results from the filing  of  a
14    return without payment of the tax or penalty shown therein to
15    be  due,  the lien shall terminate unless a notice of lien is
16    filed, as provided in Section 5b hereof, within 3 years  from
17    the  date  when  such  return  is  filed with the Department:
18    Provided that the time limitation period on the  Department's
19    right  to  file  a  notice  of  lien shall not run during any
20    period of time in which the order of any court has the effect
21    of enjoining or restraining the Department from  filing  such
22    notice of lien.
23        If  the  Department  finds  that  a  taxpayer is about to
24    depart from the State, or to conceal himself or his property,
25    or to do any other act tending  to  prejudice  or  to  render
26    wholly  or partly ineffectual proceedings to collect such tax
27    unless such proceedings are brought without delay, or if  the
28    Department  finds  that the collection of the amount due from
29    any taxpayer will be jeopardized  by  delay,  the  Department
30    shall  give  the  taxpayer  notice of such findings and shall
31    make demand for immediate return and  payment  of  such  tax,
32    whereupon  such tax shall become immediately due and payable.
33    If the taxpayer, within 5 days after such notice  (or  within
34    such extension of time as the Department may grant), does not
 
SB2210 Engrossed            -17-               LRB9212102SMdv
 1    comply  with  such  notice or show to the Department that the
 2    findings in such notice are  erroneous,  the  Department  may
 3    file  a  notice  of jeopardy assessment lien in the office of
 4    the recorder of the county  in  which  any  property  of  the
 5    taxpayer may be located and shall notify the taxpayer of such
 6    filing.  Such  jeopardy  assessment  lien shall have the same
 7    scope and effect as the statutory lien hereinbefore  provided
 8    for in this Section.
 9        If the taxpayer believes that he does not owe some or all
10    of the tax for which the jeopardy assessment lien against him
11    has  been  filed,  or that no jeopardy to the revenue in fact
12    exists, he may protest within 20 days after being notified by
13    the Department of the filing of such jeopardy assessment lien
14    and request a hearing, whereupon the Department shall hold  a
15    hearing  in  conformity  with the provisions of this Act and,
16    pursuant thereto, shall notify the taxpayer of  its  findings
17    as  to  whether  or not such jeopardy assessment lien will be
18    released. If not, and if the taxpayer is  aggrieved  by  this
19    decision,  he  may file an action for judicial review of such
20    final determination of  the  Department  in  accordance  with
21    Section 12 of this Act and the Administrative Review Law.
22        If,  pursuant  to  such  hearing (or after an independent
23    determination of  the  facts  by  the  Department  without  a
24    hearing),  the  Department determines that some or all of the
25    tax covered by the jeopardy assessment lien is  not  owed  by
26    the  taxpayer,  or that no jeopardy to the revenue exists, or
27    if on judicial review the final judgment of the court is that
28    the taxpayer does not owe some or all of the tax  covered  by
29    the jeopardy assessment lien against him, or that no jeopardy
30    to  the  revenue  exists,  the  Department  shall release its
31    jeopardy assessment lien to the extent  of  such  finding  of
32    nonliability for the tax, or to the extent of such finding of
33    no jeopardy to the revenue.
34        The Department shall also release its jeopardy assessment
 
SB2210 Engrossed            -18-               LRB9212102SMdv
 1    lien  against  the  taxpayer  whenever  the  tax  and penalty
 2    covered by such lien, plus any interest which may be due, are
 3    paid and the taxpayer has paid the Department in cash  or  by
 4    guaranteed  remittance  an amount representing the filing fee
 5    for the lien and the filing fee for the release of that lien.
 6    The Department shall file  that  release  of  lien  with  the
 7    recorder of the county where that lien was filed.
 8        Nothing  in  this  Section shall be construed to give the
 9    Department a preference over the  rights  of  any  bona  fide
10    purchaser,   holder   of   a   security  interest,  mechanics
11    lienholder, mortgagee,  or  judgment  lien  creditor  arising
12    prior  to  the filing of a regular notice of lien or a notice
13    of jeopardy assessment lien in the office of the recorder  in
14    the  county  in  which  the  property  subject to the lien is
15    located: Provided, however, that the  word  "bona  fide",  as
16    used  in  this Section shall not include any mortgage of real
17    or personal property or any  other  credit  transaction  that
18    results in the mortgagee or the holder of the security acting
19    as  trustee for unsecured creditors of the taxpayer mentioned
20    in the notice of lien  who  executed  such  chattel  or  real
21    property  mortgage  or  the  document  evidencing such credit
22    transaction. Such lien shall  be  inferior  to  the  lien  of
23    general   taxes,   special   assessments  and  special  taxes
24    heretofore or hereafter levied by any  political  subdivision
25    of this State.
26        In  case  title  to  land to be affected by the notice of
27    lien or notice of  jeopardy  assessment  lien  is  registered
28    under  the  provisions  of  "An  Act concerning land titles",
29    approved May 1, 1897, as amended, such notice shall be  filed
30    in the office of the Registrar of Titles of the county within
31    which  the property subject to the lien is situated and shall
32    be entered upon the register  of  titles  as  a  memorial  or
33    charge upon each folium of the register of titles affected by
34    such  notice,  and the Department shall not have a preference
 
SB2210 Engrossed            -19-               LRB9212102SMdv
 1    over the  rights  of  any  bona  fide  purchaser,  mortgagee,
 2    judgment  creditor  or other lien holder arising prior to the
 3    registration of such notice: Provided, however, that the word
 4    "bona fide"  shall  not  include  any  mortgage  of  real  or
 5    personal  property  or  any  other  credit  transaction  that
 6    results in the mortgagee or the holder of the security acting
 7    as  trustee for unsecured creditors of the taxpayer mentioned
 8    in the notice of lien  who  executed  such  chattel  or  real
 9    property  mortgage  or  the  document  evidencing such credit
10    transaction.
11        Such regular lien or jeopardy assessment lien  shall  not
12    be  effective  against any purchaser with respect to any item
13    in a retailer's stock in trade purchased from the retailer in
14    the usual course of such retailer's business.
15    (Source: P.A. 86-905.)

16        (35 ILCS 120/5b) (from Ch. 120, par. 444b)
17        Sec. 5b.  The recorder of each  county  shall  procure  a
18    file  labeled  "State  Tax  Lien  Notices"  and an index book
19    labeled "State Tax Lien Index". When notice of  any  lien  or
20    jeopardy  assessment  lien is presented to him for filing, he
21    shall file it in numerical order in the file and shall  enter
22    it alphabetically in the index. The entry shall show the name
23    and  last  known  business address of the person named in the
24    notice, the serial number of the notice, the date and hour of
25    filing, whether it is a regular lien or a jeopardy assessment
26    lien, and the amount of tax and penalty due and unpaid,  plus
27    the amount of interest due under Section 5 of this Act at the
28    time  when  the notice of lien or jeopardy assessment lien is
29    filed.
30        No recorder or registrar of titles of  any  county  shall
31    require  that  the  Department  pay  any  costs  or  fees  in
32    connection  with  recordation of any notice or other document
33    filed by the Department under  this  Act  at  the  time  such
 
SB2210 Engrossed            -20-               LRB9212102SMdv
 1    notice  or  other  document is presented for recordation. The
 2    recorder or registrar of each county,  in  order  to  receive
 3    payment  for  fees or costs incurred by the Department, shall
 4    present the Department with monthly statements indicating the
 5    amount of fees and costs incurred by the Department  and  for
 6    which no payment has been received.
 7        A  notice  of  lien  may be filed after the issuance of a
 8    revised  final  assessment  pursuant  to   a   rehearing   or
 9    departmental review under Section 4 or Section 5 of this Act.
10        When  the  lien  obtained  pursuant  to this Act has been
11    satisfied and the taxpayer has paid the Department in cash or
12    by guaranteed remittance an amount  representing  the  filing
13    fee  for  the lien and the filing fee for the release of that
14    lien, the Department shall issue a release of lien  and  file
15    that  release  of  lien with the recorder of the county where
16    that lien was filed. The to the person, or his agent, against
17    whom the lien was obtained and such  release  of  lien  shall
18    contain in legible letters a statement as follows:
19        FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
20        BE FILED WITH THE RECORDER OR THE REGISTRAR
21        OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED.
22        When a certificate of complete or partial release of lien
23    issued  by  the  Department  is  presented  for filing in the
24    office of the recorder or Registrar of Titles where a  notice
25    of  lien or notice of jeopardy assessment lien was filed, the
26    recorder,  in  the  case  of  nonregistered  property,  shall
27    permanently attach the certificate of release to  the  notice
28    of lien or notice of jeopardy assessment lien and shall enter
29    the  certificate  of  release  and the date in the "State Tax
30    Lien Index" on the line where the notice of lien or notice of
31    jeopardy assessment lien is entered.
32        In the case of  registered  property,  the  Registrar  of
33    Titles  shall file and enter upon each folium of the register
34    of titles affected thereby a memorial of the  certificate  of
 
SB2210 Engrossed            -21-               LRB9212102SMdv
 1    release which memorial when so entered shall act as a release
 2    pro tanto of any memorial of such notice of lien or notice of
 3    jeopardy assessment lien previously filed and registered.
 4    (Source: P.A. 84-221.)

 5        (35 ILCS 120/5c) (from Ch. 120, par. 444c)
 6        Sec.  5c.  Upon payment by the taxpayer to the Department
 7    in cash or by guaranteed remittance of an amount representing
 8    the filing fee for the  lien  and  the  filing  fee  for  the
 9    release   of   that   lien,  the  Department  shall  issue  a
10    certificate of complete or partial release of  the  lien  and
11    file  that  complete  or  partial  release  of  lien with the
12    recorder of the county where the lien was filed:
13        (a)  To the extent that the  fair  market  value  of  any
14    property  subject  to the lien exceeds the amount of the lien
15    plus the amount of all prior liens upon such property;
16        (b)  To  the  extent  that   such   lien   shall   become
17    unenforceable;
18        (c)  To  the  extent that the amount of such lien is paid
19    by the retailer whose  property  is  subject  to  such  lien,
20    together with any interest which may become due under Section
21    5  of  this  Act  between the date when the notice of lien is
22    filed and the date when the amount of such lien is paid;
23        (d)  To  the  extent  that  there  is  furnished  to  the
24    Department on a form to be approved  and  with  a  surety  or
25    sureties  satisfactory  to  the  Department  a  bond  that is
26    conditioned upon the payment of  the  amount  of  such  lien,
27    together with any interest which may become due under Section
28    5  of  this Act after the notice of lien is filed, but before
29    the amount thereof is fully paid;
30        (e)  To the extent and under the circumstances  specified
31    in  Section 5a of this Act in the case of jeopardy assessment
32    liens;
33        (f)  To the extent to  which  an  assessment  is  reduced
 
SB2210 Engrossed            -22-               LRB9212102SMdv
 1    pursuant  to a rehearing or departmental review under Section
 2    4 or Section 5 of this Act.
 3        A certificate of complete or partial release of any  lien
 4    shall  be  held  conclusive  that  the lien upon the property
 5    covered by the certificate  is  extinguished  to  the  extent
 6    indicated by such certificate.
 7    (Source: Laws 1965, p. 531.)

 8        Section  99.  Effective  date. This Act takes effect upon
 9    becoming law, except that the changes to Sections 1102, 1103,
10    and 1105 of the Illinois Income Tax Act and Sections 5a,  5b,
11    and  5c  of  the Retailer's Occupation Tax Act take effect on
12    January 1, 2003.

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