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Illinois Tax Amnesty

On Monday, August 16, Governor Pat Quinn signed SB 377 and established Illinois tax amnesty. The bill establishes a tax amnesty program that runs from October 1, 2010 to November 8, 2010.

What liabilities are eligible for amnesty? The bill certainly covers the liability for unfiled returns, but it includes many more assessments. Outstanding notice? Yes, if properly paid, any penalties and interest on the notice may be abated. How does amnesty apply if you are currently undergoing a federal audit? An Illinois audit? Penalty and interest abatement is definitely possible, but there are many moving parts to be considered, including whether or not Illinois will pay you a cash refund if you overestimate the Illinois liability.

Some major terms of the program:

• If all tax is paid during the amnesty period, all penalties and interest are abated.
• Amnesty covers all taxes administered by the Illinois Department of Revenue other than motor fuel use tax.
• Periods covered begin July 1, 2002, and end June 30, 2009.
• Taxes not satisfied during the amnesty period may be subject to 200% penalties and interest.
• Taxpayer cannot be party to any criminal investigation or any civil or criminal litigation pending in court for any Illinois tax nonpayment, delinquency, or fraud.
• Unlike the previous amnesty, refund claims for unrelated issues are not precluded. [ok?]
• Unlike the previous amnesty, if a federal audit has not been completed, the doubling of penalties and interest will not occur.

While seemingly a simple process, the rules become considerably more complex, when multiple periods or tax types are involved, especially if an audit is occurring. Taxpayers with outstanding balances with the Illinois Department of Revenue should consult with Deb Rood at drood@BlackmanKallick.com or 312-980-2995 to maximize the benefits of amnesty.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.