AUTHORITY: Implementing and authorized by the Illinois Income Tax Act [35 ILCS 5] and Section 39c-1a of the Civil Administrative Code of Illinois [20 ILCS 2505/39c-1a].

SOURCE: Emergency rules adopted at 17 Ill. Reg. 445, effective January 1, 1993, for a maximum of 150 days; adopted at 17 Ill. Reg. 7031, effective May 3, 1993; amended at 17 Ill. Reg. 18118, effective October 4, 1993; emergency amendment at 19 Ill. Reg. 1139, effective January 18, 1995, for a maximum of 150 days; emergency expired June 16, 1995; amended at 21 Ill. Reg. 2362, effective February 3, 1997; amended at 24 Ill. Reg. 6582, effective April 10, 2000

SUBPART A: ELECTRONIC RETURNS

 

Section 105.100  Composition of an Electronic Return

 

a)         Except as provided in subsection (d), an electronic return consists of data transmitted to the Department electronically, and paper documents that contain information which cannot be electronically transmitted or are requested for verification; for example, taxpayer signatures and Forms W-2.  In total, electronic returns contain the same information as traditionally filed paper documents.

 

b)         The following forms and schedules can be transmitted electronically:

 

1)         IL-1040 Illinois Individual Income Tax Return,

 

2)         Schedule NR Nonresident and Part-Year Resident Computation of Illinois Tax (Individual),

 

3)         W-2 Wage and Tax Statement,

 

4)         W-2G Statement for Certain Gambling Winnings,

 

5)         1099-R Total Distributions from Profit-sharing, Retirement Plans, Individual Retirement Arrangements, Insurance Contracts, Etc.,

 

6)         US 1040 or 1040A U.S. Individual Income Tax Return, and

 

7)         US Schedule B or Schedule 1 Interest and Dividend Income.

 

c)         The non-electronic portion of the return consists of the following:

 

1)         Form IL-8453, Illinois Individual Income Tax Electronic Filing Declaration; required for all electronic returns (see Subpart E of this Part),

 

2)         Copy 2 of Forms W-2, W-2G or 1099-R that would normally be attached to the front of a paper return.  These must be attached to the front of Form IL-8453,

 

AGENCY NOTE:  Substitute wage and tax statement forms (U.S. 4852 or IL-4852) cannot be submitted in lieu of Forms W-2, W-2G, and 1099-R.

3)         Required support of IL-1040 line entries for other additions or military pay subtraction, and other information documents that are voluntarily being included with the return by the taxpayer as supporting material.  These documents must be attached to the back of Form IL-8453, and

 

4)         A copy of the paper tax return signed by the paid preparer when the electronic filer transmits a return that was prepared by another tax preparer. This must be attached to the back of the IL-8453.

 

d)         For purposes of IL-1040 electronic filing an on-line electronic return consists of data transmitted to the Department electronically as described in subsection (b).  In addition, an on-line electronic return must include the Illinois Personal Identification Number (IL-PIN) assigned to the taxpayer by the Department.  If married filing jointly, the return must also contain the IL-PIN assigned to the taxpayer's spouse.  The IL-PIN is used as the taxpayer signature in lieu of the signature on Form IL-8453.  No paper Form IL-8453 is required to be completed for an on-line return.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.110  Exclusions from Electronic Filing

 

The following types of returns are excluded from electronic filing:

 

a)         Returns from individuals or firms who have not been accepted as electronic return originators (EROs) or transmitters  (see Section 105.200);

 

b)         Returns requiring forms or schedules not listed in Section 105.100(b).  These exclusions can be identified by amounts on the following IL-1040 return lines:

 

1)         Other Subtractions

 

2)         Credit for Taxes Paid to Other States

 

3)         Tax Credits from Schedule 1299-C

 

4)         IL-2210 Penalty;

 

c)         Returns that include Internal Revenue Service (IRS) or Illinois forms  4852, or any other substitute wage and tax statement used to verify withholding;

 

d)         Returns that  require attachments  other than IRS Form 1040 or 1040A, Page 1, to verify IL-1040 subtractions for federally taxed retirement and Social Security;

 

e)         Returns that require attachments other than IRS Schedule B or Schedule 1, to verify IL-1040 subtractions for U.S. government obligations;

 

f)         Decedent returns, including joint returns filed by surviving spouses;

 

g)         Fiscal year returns;

 

h)         Prior year returns;

 

i)          Amended or corrected returns;

 

j)          Returns with dollars and cents entries (only whole dollar amounts will be accepted);

 

k)         Returns containing more than:

 

1)         1 Schedule NR

 

2)         20 W-2s

 

3)         30 W-2Gs

 

4)         10 1099-Rs

 

5)         30 statements; and

 

l)          On-line returns of individual taxpayers that do not have a Department assigned IL-PIN.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.120  Where to Send Electronic Returns

 

a)         Electronic IL-1040 returns will be transmitted to the communications processor at the Illinois Department of Revenue in Springfield, Illinois.  The  telephone number will be provided to accepted transmitters  as the taxpayer signature in lieu of the signature on Form IL-8453.  No paper Form IL-8453 is required to be completed for an on-line return.

 

b)         When requested, Forms IL-8453 and attachments for accepted electronic IL-1040 returns must be mailed to:

 

Regular Mail	or	Overnight Mail
Illinois Dept. of Revenue		Illinois Dept. of Revenue
Exception Processing Division		Exceptions  Processing
P.O. Box 19479		Division Mail Code 2-221
Springfield IL 62794-9479		101 W. Jefferson St.
		Springfield IL 62702

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

SUBPART B: ELECTRONIC FILING PARTICIPANTS

 

Section 105.200  Categories of Electronic Filers

 

Participants in electronic filing are categorized as follows:

 

a)         Electronic Return Originator (ERO) – a firm, organization, or individual who deals directly with the taxpayer and who:

 

1)         Prepares a tax return or collects a prepared tax return for the purpose of having an electronic return produced; and

 

2)         Obtains the taxpayer's signature on Form IL-8453, Individual Income Tax Electronic Filing Declaration.

 

b)         Transmitter – a firm, organization, or individual who transmits electronic returns directly to the Department's communications processor.

 

c)         Software Developer – writes software for the purpose of:

 

1)         Formatting returns to conform with the Department's electronic return specifications; and/or

 

2)         Transmitting electronic returns directly to the Department's communications processor.

 

Section 105.210  Types of Electronic Filers

 

a)         An electronic filer is a collective term referencing all participants in the program.  An electronic filer can be included in one or more of the categories defined in Section 105.200. The categories are specific to the function(s) performed.

 

b)         An electronic filer can be one or more of the following business types:

 

1)         Preparer – prepares the return and computes the tax based on the information that the taxpayer provides;

 

2)         Software Firm – writes software that it uses or sells for the purpose of formatting electronic returns and/or transmitting them directly to the Department's communications processor;

 

3)         Service Bureau – takes tax returns from accepted electronic filers and formats electronic returns, but does not collect returns directly from taxpayers or transmit returns directly to the Department's communications processor;

 

4)         Transmitter – provides services for direct transmission to the Department's communications processor;

 

5)         Electronic Return Collector – takes prepared returns directly from taxpayers for the purpose of having electronic tax returns produced.  An electronic return collector may be a for-profit or a not-for-profit organization in the private or public sector that chooses to provide electronic filing services.  Examples include employers providing the service to their employees or a university providing electronic return collection services to the student body;

 

6)         On-line Software Developer – writes software that it provides to individual taxpayers through an internet site or a commercially purchased package, for the purpose of formatting on-line electronic returns and accepting those returns from taxpayers for transmission by an on-line transmitter; and

 

7)         On-line Transmitter-accepts returns, directly from individual taxpayers using software from an internet site or a commercially purchased package, for the purpose of having an electronic tax return produced and transmitted.  An on-line transmitter provides services for direct transmission to the Department's communications processor, or to the IRS for the Federal/State Electronic Filing.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.220  Ways to Participate in Electronic Filing

 

Electronic filers can choose to perform all the functions associated with electronic filing and be electronic return originators, transmitters, and software developers or they can choose to use the services of another accepted electronic filer (third party) to participate in the electronic filing program. For example:

 

a)         An electronic return originator can prepare the tax return (preparer), or take prepared tax returns for the purpose of having electronic returns produced (electronic return collector).

 

b)         An electronic return originator can develop software to format return information to conform with the Department specifications (software developer), purchase a software product to perform this function, or use a service bureau to perform this function.

 

c)         An electronic return originator can write the software to transmit the formatted returns (software developer), purchase a software product to transmit (transmitter), or use a third-party transmission service that transmits.

 

            AGENCY NOTE:  An electronic return originator who transmits through a third party is not categorized as a transmitter.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.230  Responsibilities of Electronic Filers

 

a)         All electronic filers must comply with the requirements and specifications set forth in this Part and, if applicable, IL-1346 (see Section 105.400(c)(2)).

 

b)         Electronic filers can only accept returns for electronic filing directly from the taxpayer, or from other electronic filers who have been accepted into the Illinois electronic filing program.

 

c)         Electronic filers who collect prepared tax returns for electronic filing (electronic return collectors) must treat each such collection or drop-off point (physical location) for electronic returns as a separate entity that must submit an application and be accepted as an electronic filer.  Each entity will be treated as an electronic return originator and have the same responsibilities.

 

d)         Electronic filers who charge a fee for the electronic transmission of the return must not base the fee on a percentage of the refund amount.  Electronic filers must not charge a separate fee for direct deposit.

 

e)         Electronic filers must not stockpile returns for electronic transmission prior to receiving official acceptance into the program or at any time while participating in the program.

 

f)         Electronic filers must submit a revised application to the Department to update the information contained on their most current application (Form IL-8633) or information update form (EFS-15) when there are changes such as:

 

1)         the firm name or doing business as (DBA) name(s),

 

2)         any address, telephone or contact representative,

 

3)         the electronic filing functions performed, or

 

4)         the organization's ownership.

 

g)         Electronic filers must ensure electronic returns are filed in a timely manner.  The receipt date of the electronic transmission will constitute the receipt date of the return if it is acknowledged as accepted by the Department.  Any return acknowledged as rejected by the Department will be considered not filed.  In order to be timely filed, a return must be received by April 15.  Any late-filed electronic returns transmitted to the Department must be received prior to midnight on April 22.  The Department's communications processor will not accept return transmissions after that time.  However, the communications processor will be available for the transmitter to retrieve acknowledgement files through April 29.  Any return filed on April 22 and not acknowledged as accepted must be filed on paper.

 

h)         Electronic filers must immediately contact the Office of Electronic Filing if an acknowledgement has not been available after 36 hours from the transmission of the return.

 

i)          Electronic filers cannot recall or intercept electronically filed IL-1040 returns after the returns have been acknowledged as accepted.  If the electronic filer or the taxpayer wishes to change any entries after a return has been accepted, a paper amended return, Form IL-1040-X, must be filed with the Department.  (Also see 86 Ill. Adm. Code 100.9400(f)(3).)

 

j)          Electronic filers who function as electronic return originators as defined in Section 105.200(a) must:

 

1)         Comply with the procedures for securing Form IL-8453, Taxpayer Declaration, as outlined in Subpart E of this Part;

 

2)         Input and transmit the taxpayer's address from Forms W-2, W-2G, and 1099-R (or any other transmitted form) if the address is different than the taxpayer's address in the electronic portion of the IL-1040;

 

3)         Furnish copies of the signed Form IL-8453 and non-electronic portion of the electronic IL-1040 returns to the taxpayers and advise them of the information in Subpart G of this Part;

 

4)         Furnish every taxpayer that has a balance due return with Form IL-1040-V, IL-1040 Payment Voucher for Individual Income Tax;

 

5)         Inform every taxpayer that has a balance  due return that it is the responsibility of every taxpayer to make full and timely payment of any tax that is due.  Failure to make full payment of any tax that is due on or before April 15 will result in the imposition of interest and penalties;

 

6)         Retain the following material until December 31 of the filing year, unless otherwise notified by the Department:

 

A)        Copies of  all the material furnished to the taxpayers;

 

B)        A copy of any signed Form IL-8453 and Forms W-2, W-2G, and 1099-R mailed to the Department;

 

C)        Copies of the electronically transmitted material as defined in Section 105.100(b). These copies may be retained on magnetic media; and

 

D)        The acknowledgement files received from the Department or from third-party transmitters. These files may be retained on magnetic media;

            AGENCY NOTE:  Electronic return originators who are also paid preparers of the electronic tax return must retain materials as required by the Illinois Income Tax Act (IITA.)

 

7)         Identify the paid preparer in the appropriate fields of the electronic IL-1040 return, and ensure the paid preparer's signature is included on (or with) the Form IL-8453.

 

k)         Electronic filers who function as transmitters as defined in Section 105.200(b) must:

 

1)         Transmit electronic IL-1040 returns and retrieve acknowledgement files in a timely manner. Acknowledgement files will normally be available within 24 hours after transmission.  If the acknowledgement files are not retrieved within five days, the Department will contact the transmitter;

 

2)         Match the acknowledgement files to the original transmission files.  Returns acknowledged as accepted will be considered filed returns. Returns acknowledged as rejected must be corrected and re-transmitted, if possible. Returns that cannot be re-transmitted must be filed on paper form IL-1040;

 

3)         Contact the Office of Electronic Filing for assistance if returns have been rejected after three attempts, or if acknowledgments are received for returns that were not in the original transmissions;

 

4)         Ensure the security and confidentiality of all transmitted data;

 

5)         Not use software that has a Department assigned production password built into the software;

 

6)         Follow the instructions provided in Subpart H of this Part, Transmission Procedures; and

 

7)         Retain copies of all the acknowledgement files received from the Department.  These may be retained on magnetic media.  This material should be retained until December 31 of the filing year unless notified otherwise by the Department.

 

l)          In addition to the provisions of subsection (k), transmitters who are transmitting on-line electronic returns must:

 

1)         Ensure that they do not transmit, or accept for transmission, more than five on-line returns originating from one software package or from one e-mail address;

 

2)         Ensure that they use only an IRS assigned Electronic Filing Identification Number (EFIN) or an IRS assigned Electronic Transmitter Identification Number (ETIN) assigned for use in on-line filing when transmitting on-line returns, and that each on-line return contains an on-line EFIN;

 

3)         Ensure that they do not combine, within the same transmission file to the Department, on-line electronic returns with traditional electronic returns;

 

4)         Enter the letter "O" in the Trans Record "A" as the "Transmission Type Code" when transmitting on-line returns directly to the Department, or enter the letter "O" in Field Number "049" of the "Indicators Section" in the "Generic Record" when transmitting on-line returns to the IRS for Federal/State Electronic Filing;

 

5)         Include the taxpayer IL-PIN in the on-line electronic return.  Married persons filing joint returns must include both the primary and spouse IL-PIN.  Returns received without the IL-PIN(s) will be rejected;

 

6)         Match acknowledgments to original returns transmitted, and notify the taxpayer of the status of the on-line return.  This must be done either through electronic means within two work days after acknowledgment retrieval, or by mailing written notification within one work day after acknowledgment retrieval;

 

7)         Notify the taxpayer of acceptance or rejection by the Department of an on-line electronic return.  If accepted, the transmitter must provide the taxpayer the date of acceptance and the Declaration Control Number (DCN) of the return.  The DCN is a 14 position serial number assigned to each electronic return.  If rejected, the transmitter must provide the taxpayer the date of rejection, what the reject code(s) mean, and how the taxpayer can correct the error(s).  In addition, the taxpayer must be instructed to file a paper return if he/she chooses not to correct the return and retransmit, or if the return is excluded from electronic filing; and

 

8)         Retain copies of the electronically transmitted material as defined in Section 105.100(b) until December 31 of the filing year.  These copies may be retained on magnetic media.

 

m)        Transmitters who provide transmission services to other electronic filers must also:

 

1)         Accept electronic IL-1040 returns for transmission to the Department's communications processor only from electronic filers accepted in the Illinois program; and

 

2)         Provide each of their clients with the acknowledgement files for their transmitted returns within 24 hours after receipt of the acknowledgments from the Department.  Failure to comply could lead to suspension from the program (see Section 105.1010).

 

n)         Electronic filers who function as software developers as defined in Section 105.200(c) must:

 

1)         Correct software errors that cause electronic returns to be rejected.  Correct these errors quickly to ensure the timely transmission of electronic returns;

 

2)         Expeditiously distribute corrections to all electronic filers utilizing these products;

 

3)         Ensure that if their software products will be used for transmitting by multiple electronic filers at the same time, their software has the capability of combining returns from these electronic filers into one Department transmission file, taking into account the Declaration Control Number assignments and requirements specified in Section 105.510; and

 

4)         Not incorporate into its software a Department assigned production password.

 

o)         In addition to the provisions of subsection (n), software developers who write software for on-line electronic filing must:

 

1)         Provide assistance as needed to taxpayers using their software;

 

2)         Ensure that the software package cannot be used to transmit more than five on-line electronic returns;

 

3)         Ensure that the software, if available through an internet site, cannot be used to file more than five on-line electronic returns from one e-mail address;

 

4)         Ensure that the software informs taxpayers that an IL-PIN must have been received by the taxpayer from the Department, and provided in the return by the taxpayer, in order to file an Illinois on-line electronic return.  If an on-line return is received without the IL-PIN(s), it will be rejected by the Department;

 

5)         Ensure that the software contains Form IL-1040-V, IL-1040 Payment Voucher for Individual Income Tax, that can be printed and used by the taxpayer to make payment to the Department.  In addition, the software must inform the taxpayer that it is the responsibility of every taxpayer to make full and timely payment of any tax that is due.  Failure to make full payment of any tax that is due on or before April 15 will result in the imposition of interest and penalties;

 

6)         Ensure that the software informs taxpayers that direct deposit is available for Illinois refunds from electronic returns, and that direct deposit information transmitted cannot be rescinded or changed after the on-line return is accepted by the Department;

 

7)         Ensure that, if the taxpayer selects direct deposit, the routing transit number (RTN) of the financial institution designed by the taxpayer meets specific criteria.  The RTN must contain nine digits, and the first two digits must fall within the valid ranges of 01 through 12 or 21 through 32; and

 

8)         Ensure that the software contains an on-line consent to disclosure statement equivalent in content to the taxpayer declaration from Form IL-8453. The statement must include direct deposit authorization, as applicable.  The software must prompt the taxpayer to provide his/her IL-PIN as signature to the statement.  The taxpayer IL-PIN is used in lieu of the written taxpayer signature on Form IL-8453, which is not required for an on-line electronic return.  The IL-PIN must be included within the on-line electronic return.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

SUBPART C: APPLICATIONS

 

Section 105.300  General Information

 

a)         Generally, previous applicants will be issued a Department information update form (EFS-15).  Follow instructions included with the form and respond only when changes are necessary.

 

b)         New applicants must submit application Form IL-8633.

 

c)         Use only the official Form IL-8633 or a substitute form that duplicates the application in format, language, content, color and size.

 

(Source:  Amended at 17 Ill. Reg. 18118, effective October 4, 1993)

 

Section 105.310  Where to Apply

 

Applications and update forms should be sent to:

 

Illinois Dept. of Revenue

Central Registration Division

P.O. Box 19030

Springfield IL  62794- 9030

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.320  Who Must Apply

 

a)         All organizations or individuals must submit an application to participate in the program.  Applications that are incomplete or improperly signed will be returned to the applicants.  The Department reserves the right to limit electronic filing applicants.

 

b)         All applications and update forms must be signed by a firm official or person authorized to act for the firm in legal and/or tax matters.  The name, title and social security number of this person must appear on the application.

 

c)         Applications and update forms should be submitted as early as possible to allow the Department time to process the applications prior to the beginning of the electronic filing period.

 

(Source:  Amended at 17 Ill. Reg. 18118, effective October 4, 1993)

 

Section 105.330  Who Does Not Need to Apply

 

a)         Equipment manufacturers or software firms that provide products that are not used exclusively for electronic filing (e.g., someone who provides a 3780 protocol converter, a modem manufacturer, a PC manufacturer, etc.) do not need to apply.

 

b)         Telecommunication networks that do not provide a product exclusively used for electronic filing do not need to apply.

 

Section 105.340  EFIN and ETIN Assignments

 

a)         The Department will require the participants in this electronic filing program to be participants in good standing in the IRS program.

 

1)         The EFIN will be used in the Illinois program and must be included on the application.  An Illinois EFIN will be assigned upon special request.

 

2)         The IRS assigns a password to each software developer and transmitter.  The ETIN will be used in the Illinois program and must be included on the application.  However, a separate password will be issued by Illinois.

 

3)         The EFINs, ETINs and Illinois passwords cannot be transferred and must be kept secure.

 

b)         EFINs are assigned based on the IRS district office that serves the area where the applicant is located. The EFIN is used in the construction of the Declaration Control Number (DCN) and indicates the identity of the electronic return originator.

 

c)         ETINs are assigned based on the IRS service center where the federal transmissions will be sent.  The ETIN and Illinois password allow access to the Department's communications processor and identify the transmitter.  During the testing phase, a test password will be assigned that allows access only to the test environment.  A different password will be assigned for production transmission.

 

d)         Participants functioning solely as software developers will only be allowed to use their ETIN in the test environment. They will only be assigned a test password. This ETIN and password will not be accepted in the production environment.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

SUBPART D: ACCEPTANCE PROCESS

 

Section 105.400  General Information

 

a)         Acceptance to participate in the program will be granted to qualifying applicants by the Department. Applicants will be notified of acceptance or denial after processing of the application or update form is completed (see Section 105.410).

 

b)         Acceptance of a software firm or transmitter also requires passing the Illinois Participant Acceptance Testing System (IPATS) (see Section 105.450).

 

c)         Software developers and transmitters will be mailed the following booklets:

 

1)         Booklet IL-1345, Illinois Department of Revenue Procedure for Electronic Filing of Individual Income Tax Returns;

 

2)         Booklet IL-1346, Illinois Department of Revenue Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns; and

 

3)         Booklet IL-1347, Illinois Department of Revenue Electronic Filing Test Package.

 

d)         Applicants who function solely as electronic return originators will receive Booklet IL-1345.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.410  Suitability Checks

 

a)         Suitability checks will be performed on all applicants.

 

b)         The Department will complete the suitability check as soon as possible.  Until an applicant passes suitability, returns cannot be transmitted.

 

c)         If an applicant is denied, the Department will send a letter explaining the reasons for denial.  If an applicant who was denied attempts to transmit returns, all returns will be rejected.

 

d)         Listed below are some reasons that an applicant may be denied acceptance into the program:

 

1)         Failure to pass the IRS suitability checks;

 

2)         Failure to  file accurate and timely tax returns, both business and personal;

 

3)         Failure to pay any State of Illinois personal or business tax liability, penalty, or interest; and

 

4)         Material misrepresentation on any application.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.420  Who Must Test

 

a)         All software developers whose software formats tax returns, or transmits return information directly to the Department's communications processor, must pass the IPATS test. (See Section 105.450.)

 

b)         All electronic filers who transmit directly to the Department must successfully complete the IPATS test. Hardware and software differences may exist in their systems that could cause transmission problems.  This also ensures that electronic filers purchasing accepted software are able to use it to transmit test returns prior to transmitting production returns.

 

c)         Applicants who function solely as electronic return originators and will not transmit directly to the Department do not need to test.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.430  What Must Be Tested

 

a)         The Department will provide the Booklet IL-1347, Illinois Department of Revenue Electronic Filing Test Package, to all applicants who are required to test. The test package contains income tax situations which provide Illinois schedules, forms and IL-1040 information.  All calculations and forms must be completed, formatted, and transmitted to the Department.

 

b)         Applicants must use this test package and must be tested on all forms and schedules.  They must successfully complete two separate test transmissions of these forms before they are accepted into the program.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.440  Where to Test

 

a)         Software developers and transmitters must test with the Department's Springfield office.

 

b)         Applicants should contact the Office of Electronic Filing when they are ready to test.

            NOTE:  To avoid any delay in testing, contact the Office of Electronic Filing at least 24 hours before the initial test transmission is planned.

 

Section 105.450  How to Test

 

IPATS is a five-step process for software developers and transmitters:

 

a)         Step 1:  Filers must contact the Office of Electronic Filing.

 

b)         Step 2:  Filers must transmit the test returns from the IL-1347 test package using their electronic filing software.

 

c)         Step 3:  When the transmitter has received acknowledgement files containing no rejected returns, contact the Office of Electronic Filing.

 

d)         Step 4:  The Department will review these successful test transmissions and provide feedback to the contact person.

 

1)         The Department will notify transmitters if any additional errors are encountered.

 

2)         The transmitter, when not the software developer, must advise the software developer in order to have the software products corrected. Transmitters will re-transmit affected returns to the Department after software corrections are made.

 

3)         Transmitters who have multiple clients testing through them should expedite the distribution of software updates to avoid recurrence of the same problem or error.

 

e)         Step 5:  The Department will notify filers when they have passed the IPATS test.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.460  When to Test

 

a)         The Department will begin accepting test transmissions on a specified date published each year.

 

b)         Testing may continue after production processing has begun.

 

Section 105.470  Acceptance

 

a)         The Department will send applicants notification of acceptance to participate in the program after passing suitability and IPATS testing, if applicable.  The transmitter's password for production processing will be enclosed.

 

b)         Electronic return originators must verify that their software and transmission service have been accepted before accepting or transmitting production returns. Acceptance into the program is conditioned upon the use of accepted software and transmission services.

 

c)         Transmitters must not accept electronic returns for transmission until they have been accepted and assigned a production password authorizing access to the Department's electronic filing system.

 

d)         Software developers must not distribute their software until they have been notified of acceptance.

 

e)         Accepted electronic filers can begin transmitting production returns to the Department on the same date each year as is set by the IRS for the transmission of federal returns.  If there is a change in this date, all accepted participants will be notified.

 

f)         Generally, the Department's communications processor is available 24 hours a day.

 

g)         If the electronic filing system will be unavailable for any length of time, the Department will provide instructions to accepted participants.

 

(Source:  Amended at 17 Ill. Reg. 18118, effective October 4, 1993)

SUBPART E: IL-8453 ILLINOIS INDIVIDUAL INCOME TAX ELECTRONIC FILING DECLARATION

 

Section 105.500  Purpose

 

a)         Form IL-8453 is the signature portion of the return. It must be completed and signed by all appropriate parties before the return is transmitted electronically.  Form IL-8453 serves the following purposes:

 

1)         Authenticates the return;

 

2)         Serves as a transmittal for the associated non-electronic documents that will be stapled to the declaration and sent to the Department, when requested.  Section 105.100(c) lists documents and forms to be attached to Form IL-8453;

 

3)         Authorizes the electronic return originator to file the return electronically on behalf of the taxpayer;

 

4)         Provides the taxpayer's written authorization to have the refund directly deposited as designated on the form; and

 

5)         Authorizes the Department to inform the electronic return originator, or the transmitter, that the taxpayer's return has been accepted or rejected.  When rejected, authorizes the Department to identify the reasons for rejection.

 

b)         Form IL-8453 does not serve as a power of attorney or as a substitute for the information required on the electronic tax return.

 

c)         Form IL-8453 cannot be used to submit forms or schedules which are not listed in Section 105.100. Returns requiring forms that are excluded from electronic filing must be filed on a paper Form IL-1040.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.510  Instructions

 

a)         Sequence of events and general information

 

1)         An electronic return originator prepares the return, computes the tax based on the information the taxpayer provides, and accepts the return for the purpose of electronic filing; or collects prepared tax returns for the purpose of electronic filing.

 

2)         After the return has been prepared and before the return is transmitted electronically, the taxpayer must verify the information in the electronic portion of the return.  In addition, the taxpayer must verify the information on Form IL-8453, including the routing transit and account numbers if direct deposit is authorized, and sign the Form IL-8453.  Both signatures are required on a joint return.  A file copy of the prepared return must be provided to the taxpayer at the time of the signature. The copy should be retained by the taxpayer, and not be forwarded to the Department.

 

3)         Practitioners are prohibited from allowing taxpayers to sign a blank tax return.  A blank Form IL-8453 is the same as a blank tax return; therefore, electronic return originators are also prohibited from allowing taxpayers to sign a blank IL-8453.

 

4)         After Form IL-8453 has been completed and signed by the taxpayer, the electronic return originator, and preparer (if applicable), the transmitter will send the electronic portion of the return to the Department in accordance with the file specifications in the IL-1346.

 

5)         By transmitting the electronic portion of the return, the electronic filer is confirming that the IL-8453 has been accurately completed and signed.

 

6)         When requested, electronic filers must mail IL-8453s within 24 hours after receipt of written request from the Department.

 

7)         Beginning on the first day of the electronic filing season, and daily thereafter throughout the filing period, the electronic return originator will retain IL-8453s unless otherwise requested by the Department. The electronic return originator must retain forms for all electronic returns that have been acknowledged as accepted by the Department.

 

8)         If a return is acknowledged as rejected and cannot be re-transmitted, the IL-8453 shall be destroyed and any withholding forms shall be retained to attach to a paper Form IL-1040.

 

9)         Receipt of IL-8453s requested by the Department will be closely monitored.  If an IL-8453 is missing 14 days after request by the Department, the electronic return originator will be contacted.  If the electronic return originator does not provide the Department with a Form IL-8453 that includes the taxpayer's original signature and withholding forms after the electronic return originator is contacted, the taxpayer will be notified.

            AGENCY NOTE:  If excessive contacts with the ERO are required to obtain missing Forms IL-8453, the ERO may be subject to suspension from the Illinois electronic filing program.

 

b)         Completing and mailing Form IL-8453

 

1)         The DCN must be clearly printed or typed (one position per box) in the spaces provided at the top of each Form IL-8453. The DCN must match the DCN of the accepted electronic return.

 

2)         Type or print the taxpayer's name, address, and social security number in spaces provided on Form IL-8453.  The name, address, and Social Security number must be the same as the name, address, and Social Security number on the electronic IL-1040 return.

 

3)         Tax Return Information must be completed.  Enter only whole dollar amounts.  These amounts must match the corresponding entries on the electronic IL-1040 return.

 

4)         If the taxpayer authorizes to have the refund directly deposited, direct deposit of refund information must be completed.  The direct deposit information on Form IL-8453 must be the same as the direct deposit information transmitted in the electronic IL-1040.

 

5)         The Declaration and Signature of Taxpayer must contain the taxpayer's original signature(s). Electronic return originators must obtain the signature(s) from their clients prior to transmitting the electronic return to the Department.  The electronic return  originator will be contacted for missing taxpayer signatures on any IL-8453s received by the Department.  If an IL-8453 providing original taxpayer signature(s) is not received after the electronic return originator is contacted, the taxpayer will be notified.

            AGENCY NOTE:  If excessive contacts with the ERO are required, the ERO may be suspended from the program.

 

6)         The Declaration and Signature of Electronic Return Originator and Signature of Paid Preparer must be completed and signed by the electronic return originator and the paid preparer.  When the electronic return originator and the paid preparer are the same entity, the paid preparer box must also be checked.  When the electronic return originator and the paid preparer are different, a copy of the IL-1040, signed by the preparer, must be attached to the IL-8453.  A collector who is not the preparer of the return but collected the return for electronic filing (transmission) purposes must sign as the electronic return originator and date the declaration, enter the firm's name and address, enter the firm's FEIN, and provide the firm's telephone number.  There is no requirement to provide a Social Security number in this case.

 

7)         Forms W-2, W-2G, and 1099-R must be attached to the front of the IL-8453 (bottom left).  The electronic return originator will be contacted if these forms are missing from any IL-8453s received by the Department.  If a replacement IL-8453 providing the withholding forms (originals or copies) is not received by the Department after the electronic return originator is contacted, the taxpayer will be notified.  IRS or Illinois forms 4852, or any other substitute wage and tax statement, cannot be attached to the IL-8453 (or submitted later) in lieu of Forms W-2, W-2G, or 1099-R.  (See Section 105.110(c), Exclusions from Electronic Filing.)

 

            AGENCY NOTE:  If excessive contacts with the ERO are required to obtain missing withholding forms, the ERO may be subject to suspension from the Illinois electronic filing program.

 

8)         IL-8453s, if mailed to the Department, should be secured by paper clip, rubber band, or string in quantities of 100 or less.  They should be in ascending order by DCN. Each IL-8453 should consist of the non-electronic portion of the tax return as detailed in Section 105.100(c), Composition of an Electronic Return.

 

9)         Mail in either envelopes or cartons to one of the addresses listed below:

 

 

Regular Mail	or	Overnight Mail
Illinois Dept. of Revenue		Illinois Dept. of Revenue
Exceptions Processing Division		Exceptions Processing
P.O. Box 19479		Mail Code 2-221
Springfield, IL 62794-9479		101 W. Jefferson St.
		Springfield IL 62702

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.515  IL-8453 Retaining Program

 

a)         Electronic filers who function as electronic return originators as defined in Section 105.200(a) are authorized by the Department to participate in the IL-8453 retaining program, unless otherwise notified by the Department.  Participation in the program allows EROs to maintain Forms IL-8453 and associated documents, rather than submitting them to the Department.  Selected Forms IL-8453 may be periodically requested in writing by the Department from participating EROs for monitoring purposes.

 

b)         EROs participating in the IL-8453 retaining program must:

 

1)         Continue to accurately complete Forms IL-8453 according to Section 105.510.  All Forms IL-8453 and associated documents retained are subject to the Department's right of inspection or production for Department review without prior notice.

 

2)         Submit selected Forms IL-8453 and associated documents as requested in writing by the Department.  The Department's written request will provide the ERO special mailing instructions for submission of requested forms.

 

c)         Authorization to participate in the IL-8453 retaining program may be rescinded at any time if the ERO fails to provide requested Forms IL-8453, or if review of the forms provided reveals that the ERO is not in compliance with the requirements set forth in this Part.  If an ERO's authorization to participate is rescinded, the ERO will be required to submit all Forms IL-8453 retained up to the time of notification that they will no longer be allowed to participate, and all future Forms IL-8453.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.520  Corrections

 

a)         If the ERO makes changes to the electronic return after Form IL-8453 has been completed and signed by the taxpayer but before it is transmitted, the ERO must have the taxpayer sign a corrected Form IL-8453 if either of the following applies:

 

1)         The net income differs from the amount on the electronic tax return by more than $50; or

 

2)         The tax, the withholding amount, the overpayment amount, or total amount due differs from the amount on the electronic tax return by more than $14.

 

b)         Non-substantive changes are limited to corrections within the above tolerances for arithmetic errors, transposition errors, misplaced entries, and spelling errors.  The incorrect information should be neatly lined through on the Form IL-8453 and the correct data entered next to the lined through entry.  Also, enter the initials or name of the person making the correction.

 

c)         Dropping cents and rounding to whole dollars do not constitute substantive change or alteration to the return unless the amount differs by more than the above tolerances.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

SUBPART F: BALANCE DUE RETURNS AND DIRECT DEPOSIT OF REFUNDS

 

Section 105.600  Balance Due General Information

 

a)         The taxpayer is responsible for submitting payment of any balance due the Department.  Electronic return originators must provide the taxpayer with Form IL-1040-V, IL-1040 Payment Voucher for Individual Income Tax, at the time the taxpayer signs the IL-8453 for the balance due return.

 

b)         Electronic return originators must inform taxpayers with balance due returns that payment of taxes due must be made to the Department no later than April 15 of the filing year.  Failure to make full payment by this date will result in the imposition of interest and penalties.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.610  Direct Deposit General Information

 

a)         Qualifying taxpayers may authorize their tax overpayments to be directly deposited into their savings or checking accounts with financial institutions, rather than receive paper refund checks. The authorization must be made by providing the appropriate information in the electronically filed IL-1040 return and on Form IL-8453 (or equivalent).

 

b)         The Department will ordinarily process an authorization for direct deposit, but reserves the right to initiate a paper refund check.  The following conditions may cause the Department to not process a direct deposit:

 

1)         Taxpayer owes back taxes, either individual or business (refund offset);

 

2)         Taxpayer has certain State or federal delinquent debt, such as child support, student loans, etc. (refund offset);

 

3)         Estimated tax payments reported on the return do not match the estimated tax payments recorded on the Department's master file;

 

4)         Taxpayer is claiming an unallowable or improperly supported deduction or credit;

 

5)         An electronic return is accepted with a valid Social Security number that belongs to another taxpayer; and

 

6)         The account information received is not processable by the Department.

 

c)         The Department is not responsible for the misapplication of a direct deposit that is caused by error, negligence, or malfeasance on the part of the taxpayer, electronic filer, financial institution, or any of their agents.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.620  Direct Deposit Responsibilities

 

Electronic filers who function as electronic return originators as defined in Section 105.200(a) must:

 

a)         Assure that the taxpayer is aware of all the general information regarding a direct deposit;

 

b)         Not charge a separate fee for direct deposit;

 

c)         Accept any direct deposit authorization to any eligible financial institution designated by the taxpayer.  For the purpose of direct deposit of tax refunds, eligible financial institution is defined as a state or national bank, savings and loan association, mutual savings bank, or credit union that accepts direct deposits (sometimes called electronic funds transfers).  "State" includes all states in the United States and their political subdivisions, and the District of Columbia;

 

d)         Assure that the taxpayer qualifies for direct deposit; to qualify for direct deposit a taxpayer must:

 

1)         Have the return electronically filed by an electronic return originator who is accepted in the Illinois program; and

 

2)         Provide to the electronic return originator proof of account from the financial institution that the taxpayer designates to receive the direct deposit.  The account specified to receive the direct deposit must be in the taxpayer's name;

 

e)         Obtain proof of account from the taxpayer.  Acceptable proof of account is a check (a photocopy is acceptable) or a form, report or statement generated by the financial institution.  A deposit slip is not an acceptable proof of account.  The proof of account document must contain the following preprinted information:

 

1)         Account name (name as on the account in the records of the financial institution);

 

2)         Account number;

 

3)         Name of financial institution or branch name; and

 

4)         Routing transit number (RTN) of the financial institution;

 

f)         Verify that the taxpayer's direct deposit information on Form IL-8453 is correct, and that the information entered is the information that is transmitted in the electronically filed IL-1040; and

 

g)         Caution the taxpayer that once the electronic return has been acknowledged as accepted by the Department, the direct deposit authorization cannot be rescinded, nor can changes be made to the routing transit number of the financial institution or the taxpayer's account number.

 

(Source:  Added at 21 Ill. Reg. 2362, effective February 3, 1997)

SUBPART G: INFORMATION ELECTRONIC FILERS MUST PROVIDE TO THE TAXPAYER

 

Section 105.700  Information and Material to be Provided to the Taxpayer

 

a)         The electronic return originator or on-line software developer must furnish the taxpayer with a copy of the electronic material described in Section 105.100(b).  This information can be on copies of official Department forms or on forms designed by the electronic filer.  If the latter, data entries must refer to the line numbers on official Department forms.  This material should be provided to the taxpayer at the time the taxpayer signs the Form IL-8453.  For on-line electronic returns, this material should be provided to the taxpayer at the time the taxpayer provides his/her IL-PIN as signature to the on-line consent to disclosure statement.

 

b)         The electronic return originator must also provide the taxpayer with a copy of the entire non-electronic portion of the return.

 

c)         In addition, the electronic return originator should advise the taxpayer to retain copies of the following materials:

 

1)         Their copy of Forms W-2, W-2G, or 1099-R;

 

2)         Any other documents that are not required by the Department, but are voluntarily being included with the return by the taxpayer as supporting material; and

 

3)         A copy of the signed Form IL-8453.

 

d)         Electronic return originators or on-line software developers should advise taxpayers that their electronic returns will be processed by the Department and the taxpayer's copy should not be forwarded to the Department.  However, amended returns, if needed, must be filed as paper returns and mailed to the Department.

 

e)         If a return is rejected and cannot be successfully re-transmitted, the electronic return originator must immediately advise the taxpayer that the  return was not electronically filed and the taxpayer must file a paper IL-1040 return.

 

f)         The electronic return originator or on-line software developers should advise the taxpayer to wait six to eight weeks from the acknowledgement date before making an official inquiry about his refund.  After this time has elapsed, the taxpayer can contact the Department's Taxpayer Assistance Office.

 

g)         Taxpayers generally contact the Department if they have not received their refund within eight weeks. The taxpayer may be asked for the DCN of the return and the date the Department acknowledged the return as accepted.  The electronic return originator must, upon request, provide the taxpayer with this information.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

SUBPART H: TRANSMISSION PROCEDURES

 

Section 105.800  Overview of Transmission Procedures

 

While several states require the transmission of the state tax return only after the federal return has been accepted, the Department does not have this requirement.

 

Section 105.810  Acknowledgement of Electronic Returns

 

a)         Each file of electronic returns transmitted to the Department will normally be acknowledged within 24 hours after receipt.

 

b)         The acknowledgement file identifies which returns have been accepted or rejected.  The acknowledgement files must be retrieved within five days.  If they are not, the Department will contact the transmitter.

 

c)         If the acknowledgement file is not available within 36 hours, or if acknowledgements are received for returns that were not transmitted within the designated transmission, immediately contact the Office of Electronic Filing for assistance.

 

d)         The transmitter should match the acknowledgement file back to the original file transmitted.

 

            NOTE:  Any transmitted electronic return that is acknowledged as rejected by the Department will not be considered a filed return.

 

e)         When a return has been rejected after three attempts, contact the Office of Electronic Filing and assistance will be provided.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

SUBPART I: ADVERTISING STANDARDS

 

Section 105.900  Advertising Restrictions

 

a)         Participants in the program agree to comply with the advertising and solicitation provisions of 31 CFR, Part 10 (Treasury Department Circular No. 230). This circular prohibits the use in any way, or participation in the use, of any form of public communication containing a false, fraudulent, misleading, deceptive, unduly influencing, coercive, or unfair statement or claim.  The prohibition includes, but is not limited to, statements pertaining to the quality of services rendered unless subject to factual verification, claims of specialized expertise not authorized by the State or federal agencies having jurisdiction over the electronic filer, and statements or suggestions that the ingenuity and/or prior record of an electronic filer rather than the merit of the matter are principal factors likely to determine the result of the matter.   In addition, advertising must not imply a special relationship with the Department.

            NOTE:  Use of the Department's name, "Illinois Department of Revenue" or "Department", within a firm's name can result in immediate suspension from the program.

 

b)         The use of improper and/or misleading advertising in relation to the program is grounds for suspension.

 

c)         The Department will monitor advertising and practices of electronic filers for consistency with the Department's requirements as stated in this Section.

 

(Source:  Amended at 21 Ill. Reg. 2362, effective February 3, 1997)

 

Section 105.910  Media Communications

 

Communications, including fee information, are limited to professional lists, telephone directories, print media, permissible mailings, radio, and television.  In the case of radio and television broadcasting, the broadcast must be pre-recorded and each recording retained by the participant until the end of the processing year.

 

Section 105.920  Endorsement

 

The Department does not endorse participants.  Acceptance to participate in the program does not imply endorsement of the software or quality of services provided.  Therefore, any public communication in which a participant's electronic filing capabilities are referenced, whether through publication or broadcast, must clearly indicate that the Department's acceptance of the participant for electronic filing does not constitute an endorsement or approval of the quality of tax preparation services provided.

SUBPART J: MONITORING AND SUSPENSION

 

Section 105.1000  Monitoring

 

a)         The Department will monitor advertising and other practices of electronic filers.  If the situation warrants, the Department will issue a warning letter describing specific corrective action for deviations from advertising standards, as described in Subpart I of this Part, or other practices.  If the deviation is not corrected, a letter of suspension will be issued. In extreme cases, a filer can be suspended immediately from the program without a warning letter.  The suspension will remain in effect until the Department determines that the deviations have been corrected.

 

b)         The Department will monitor the timely receipt, completeness and legibility of Forms IL-8453 requested and received.  If requested forms are not received or if the forms received are consistently late, incomplete or inaccurate, the electronic filer will receive a warning from the Department or, in extreme cases, a letter of suspension from the program.

 

c)         The Department will monitor the quality of filers' transmissions and returns throughout the filing season.  If the quality is unacceptable, the electronic filer will be contacted and may receive a warning from the Department or, in extreme cases, a letter of suspension from the program.

 

d)         The Department will also monitor complaints about electronic filers and issue warning or suspension letters as appropriate.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)

 

Section 105.1010  Suspension

 

The Department reserves the right to suspend the electronic filing privilege of any electronic filer who varies from the requirements, specifications, and procedures stated in this Part, or who does not consistently transmit error-free returns. When suspended, the electronic filer will be advised of the requirements for reinstatement into the program.  The following conditions could lead to warning letters and/or suspension from the program.  This list is not all-inclusive:

 

a)         Conviction of any criminal offense arising from a violation of the Illinois tax statutes or the revenue laws of the United States, or any offense involving dishonesty or breach of trust;

 

b)         Failure to file timely and accurate tax returns, both business and personal;

 

c)         Failure to pay personal or business tax liabilities;

 

d)         Assessment of penalties under any of the provisions of the Illinois Income Tax Act;

 

e)         Suspension/disbarment from practice before the IRS;

 

f)         Material misrepresentation on an application;

 

g)         Unacceptable format quality of individual transmissions;

 

h)         Unacceptable error rate;

 

i)          Violation of advertising standards;

 

j)          Unethical practices in return preparation;

 

k)         Untimely receipt, illegible, missing or inappropriate substitutes of Forms IL-8453 requested or received by the Department;

 

l)          Stockpiling returns prior to official acceptance into the program or at any time while participating in the program;

 

m)        Failure of transmitters to provide clients with acknowledgement files within 24 hours after receipt from the Department;

 

n)         Significant complaints about an electronic filer.

 

(Source:  Amended at 24 Ill. Reg. 6582, effective April 10, 2000)