Illinois General Assembly

Previous General Assemblies

Public Act 096-1435


 

Public Act 1435 96TH GENERAL ASSEMBLY



 


 
Public Act 096-1435
 
SB0377 EnrolledLRB096 06409 RCE 16493 b

    AN ACT concerning State government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Uncollected State Claims Act is amended by
adding Section 2.1 as follows:
 
    (30 ILCS 205/2.1 new)
    Sec. 2.1. Sale of debts certified as uncollectible. After
accounts have been certified by the Attorney General, or the
State agency for accounts of less than $1,000, as uncollectible
pursuant to this Act, the Department of Revenue may sell the
debts to one or more outside private vendors. Sales shall be
conducted under rules adopted by the Department of Revenue
using a request for proposals procedure similar to that
procedure under the Illinois Procurement Code. The outside
private vendors shall remit to the Department of Revenue the
purchase price for debts sold under this Section. The
Department of Revenue shall deposit the money received under
this Section into the General Revenue Fund. The State
Comptroller shall provide the Department of Revenue with any
information that the Department requests for the purpose of
administering this Section. This Section does not apply to any
tax debt owing to the Department of Revenue.
 
    Section 10. The Illinois State Collection Act of 1986 is
amended by adding Section 9 as follows:
 
    (30 ILCS 210/9 new)
    Sec. 9. Deferral and compromise of past due debt.
    (a) In this Section, "past due debt" means any debt owed to
the State that has been outstanding for more than 12 months.
"Past due debt" does not include any debt if any of the actions
required under this Section would violate federal law or
regulation.
    (b) State agencies may enter into a deferred payment plan
for the purpose of satisfying a past due debt. The deferred
payment plan must meet the following requirements:
        (1) The term of the deferred payment plan may not
    exceed 2 years.
        (2) The first payment of the deferred payment plan must
    be at least 10% of the total amount due.
        (3) All subsequent monthly payments for the deferred
    payment plan must be assessed as equal monthly principal
    payments, together with interest.
        (4) The deferred payment plan must include interest at
    a rate that is the same as the interest required under the
    State Prompt Payment Act.
        (5) The deferred payment plan must be approved by the
    Secretary or Director of the State agency.
    (c) State agencies may compromise past due debts. Any
action taken by a State agency to compromise a past due debt
must meet the following requirements:
        (1) The amount of the compromised debt shall be no less
    than 80% of the total of the past due debt.
        (2) Once a past due debt has been compromised, the
    debtor must remit to the State agency the total amount of
    the compromised debt. However, the State agency may collect
    the compromised debt through a payment plan not to exceed 6
    months. If the State agency accepts the compromised debt
    through a payment plan, then the compromised debt shall be
    subject to the same rate of interest as required under the
    State Prompt Payment Act.
        (3) Before a State agency accepts a compromised debt,
    the amount of the compromised debt must be approved by the
    Department of Revenue.
    (d) State agencies may sell a past due debt to one or more
outside private vendors. Sales shall be conducted under rules
adopted by the Department of Revenue using a request for
proposals procedure similar to that procedure under the
Illinois Procurement Code. The outside private vendors shall
remit to the State agency the purchase price for debts sold
under this subsection.
    (e) The State agency shall deposit all amounts received
under this Section into the General Revenue Fund.
    (f) This Section does not apply to any tax debt owing to
the Department of Revenue.
 
    Section 15. The Tax Delinquency Amnesty Act is amended by
changing Section 10 as follows:
 
    (35 ILCS 745/10)
    Sec. 10. Amnesty program. The Department shall establish an
amnesty program for all taxpayers owing any tax imposed by
reason of or pursuant to authorization by any law of the State
of Illinois and collected by the Department.
    The amnesty program shall be for a period from October 1,
2003 through November 15, 2003 and for a period beginning on
October 1, 2010 and ending November 8, 2010.
    The amnesty program shall provide that, upon payment by a
taxpayer of all taxes due from that taxpayer to the State of
Illinois for any taxable period ending (i) after June 30, 1983
and prior to July 1, 2002 for the tax amnesty period occurring
from October 1, 2003 through November 15, 2003, and (ii) after
June 30, 2002 and prior to July 1, 2009 for the tax amnesty
period beginning on October 1, 2010 through November 8, 2010,
the Department shall abate and not seek to collect any interest
or penalties that may be applicable and the Department shall
not seek civil or criminal prosecution for any taxpayer for the
period of time for which amnesty has been granted to the
taxpayer. Failure to pay all taxes due to the State for a
taxable period shall invalidate any amnesty granted under this
Act. Amnesty shall be granted only if all amnesty conditions
are satisfied by the taxpayer.
    Amnesty shall not be granted to taxpayers who are a party
to any criminal investigation or to any civil or criminal
litigation that is pending in any circuit court or appellate
court or the Supreme Court of this State for nonpayment,
delinquency, or fraud in relation to any State tax imposed by
any law of the State of Illinois.
    Participation in an amnesty program shall not preclude a
taxpayer from claiming a refund for an overpayment of tax on an
issue unrelated to the issues for which the taxpayer claimed
amnesty or for an overpayment of tax by taxpayers estimating a
non-final liability for the amnesty program pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)).
    Voluntary payments made under this Act shall be made by
cash, check, guaranteed remittance, or ACH debit.
    The Department shall adopt rules as necessary to implement
the provisions of this Act.
    Except as otherwise provided in this Section, all money
collected under this Act that would otherwise be deposited into
the General Revenue Fund shall be deposited as follows: (i)
one-half into the Common School Fund; (ii) one-half into the
General Revenue Fund. Two percent of all money collected under
this Act shall be deposited by the State Treasurer into the Tax
Compliance and Administration Fund and, subject to
appropriation, shall be used by the Department to cover costs
associated with the administration of this Act.
(Source: P.A. 93-26, eff. 6-20-03.)
 
    Section 20. The Uniform Penalty and Interest Act is amended
by changing Sections 3-2, 3-3, 3-4, 3-5, 3-6, and 3-7.5 as
follows:
 
    (35 ILCS 735/3-2)  (from Ch. 120, par. 2603-2)
    Sec. 3-2. Interest.
    (a) Interest paid by the Department to taxpayers and
interest charged to taxpayers by the Department shall be paid
at the annual rate determined by the Department. For periods
prior to January 1, 2004, that rate shall be the underpayment
rate established under Section 6621 of the Internal Revenue
Code. For periods after December 31, 2003, that rate shall be:
        (1) for the one-year period beginning with the date of
    underpayment or overpayment, the short-term federal rate
    established under Section 6621 of the Internal Revenue
    Code.
        (2) for any period beginning the day after the one-year
    period described in paragraph (1) of this subsection (a),
    the underpayment rate established under Section 6621 of the
    Internal Revenue Code.
    (b) The interest rate shall be adjusted on a semiannual
basis, on January 1 and July 1, based upon the underpayment
rate or short-term federal rate going into effect on that
January 1 or July 1 under Section 6621 of the Internal Revenue
Code.
    (c) This subsection (c) is applicable to returns due on and
before December 31, 2000. Interest shall be simple interest
calculated on a daily basis. Interest shall accrue upon tax and
penalty due. If notice and demand is made for the payment of
any amount of tax due and if the amount due is paid within 30
days after the date of such notice and demand, interest under
this Section on the amount so paid shall not be imposed for the
period after the date of the notice and demand.
    (c-5) This subsection (c-5) is applicable to returns due on
and after January 1, 2001. Interest shall be simple interest
calculated on a daily basis. Interest shall accrue upon tax
due. If notice and demand is made for the payment of any amount
of tax due and if the amount due is paid within 30 days after
the date of the notice and demand, interest under this Section
on the amount so paid shall not be imposed for the period after
the date of the notice and demand.
    (d) No interest shall be paid upon any overpayment of tax
if the overpayment is refunded or a credit approved within 90
days after the last date prescribed for filing the original
return, or within 90 days of the receipt of the processable
return, or within 90 days after the date of overpayment,
whichever date is latest, as determined without regard to
processing time by the Comptroller or without regard to the
date on which the credit is applied to the taxpayer's account.
In order for an original return to be processable for purposes
of this Section, it must be in the form prescribed or approved
by the Department, signed by the person authorized by law, and
contain all information, schedules, and support documents
necessary to determine the tax due and to make allocations of
tax as prescribed by law. For the purposes of computing
interest, a return shall be deemed to be processable unless the
Department notifies the taxpayer that the return is not
processable within 90 days after the receipt of the return;
however, interest shall not accumulate for the period following
this date of notice. Interest on amounts refunded or credited
pursuant to the filing of an amended return or claim for refund
shall be determined from the due date of the original return or
the date of overpayment, whichever is later, to the date of
payment by the Department without regard to processing time by
the Comptroller or the date of credit by the Department or
without regard to the date on which the credit is applied to
the taxpayer's account. If a claim for refund relates to an
overpayment attributable to a net loss carryback as provided by
Section 207 of the Illinois Income Tax Act, the date of
overpayment shall be the last day of the taxable year in which
the loss was incurred.
    (e) Interest on erroneous refunds. Any portion of the tax
imposed by an Act to which this Act is applicable or any
interest or penalty which has been erroneously refunded and
which is recoverable by the Department shall bear interest from
the date of payment of the refund. However, no interest will be
charged if the erroneous refund is for an amount less than $500
and is due to a mistake of the Department.
    (f) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the interest charged by the Department under this
Section shall be imposed at a rate that is 200% of the rate
that would otherwise be imposed under this Section.
    (g) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the interest charged by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
    (h) No interest shall be paid to a taxpayer on any refund
allowed under the Tax Delinquency Amnesty Act.
(Source: P.A. 95-331, eff. 8-21-07.)
 
    (35 ILCS 735/3-3)  (from Ch. 120, par. 2603-3)
    Sec. 3-3. Penalty for failure to file or pay.
    (a) This subsection (a) is applicable before January 1,
1996. A penalty of 5% of the tax required to be shown due on a
return shall be imposed for failure to file the tax return on
or before the due date prescribed for filing determined with
regard for any extension of time for filing (penalty for late
filing or nonfiling). If any unprocessable return is corrected
and filed within 21 days after notice by the Department, the
late filing or nonfiling penalty shall not apply. If a penalty
for late filing or nonfiling is imposed in addition to a
penalty for late payment, the total penalty due shall be the
sum of the late filing penalty and the applicable late payment
penalty. Beginning on the effective date of this amendatory Act
of 1995, in the case of any type of tax return required to be
filed more frequently than annually, when the failure to file
the tax return on or before the date prescribed for filing
(including any extensions) is shown to be nonfraudulent and has
not occurred in the 2 years immediately preceding the failure
to file on the prescribed due date, the penalty imposed by
Section 3-3(a) shall be abated.
    (a-5) This subsection (a-5) is applicable to returns due on
and after January 1, 1996 and on or before December 31, 2000. A
penalty equal to 2% of the tax required to be shown due on a
return, up to a maximum amount of $250, determined without
regard to any part of the tax that is paid on time or by any
credit that was properly allowable on the date the return was
required to be filed, shall be imposed for failure to file the
tax return on or before the due date prescribed for filing
determined with regard for any extension of time for filing.
However, if any return is not filed within 30 days after notice
of nonfiling mailed by the Department to the last known address
of the taxpayer contained in Department records, an additional
penalty amount shall be imposed equal to the greater of $250 or
2% of the tax shown on the return. However, the additional
penalty amount may not exceed $5,000 and is determined without
regard to any part of the tax that is paid on time or by any
credit that was properly allowable on the date the return was
required to be filed (penalty for late filing or nonfiling). If
any unprocessable return is corrected and filed within 30 days
after notice by the Department, the late filing or nonfiling
penalty shall not apply. If a penalty for late filing or
nonfiling is imposed in addition to a penalty for late payment,
the total penalty due shall be the sum of the late filing
penalty and the applicable late payment penalty. In the case of
any type of tax return required to be filed more frequently
than annually, when the failure to file the tax return on or
before the date prescribed for filing (including any
extensions) is shown to be nonfraudulent and has not occurred
in the 2 years immediately preceding the failure to file on the
prescribed due date, the penalty imposed by Section 3-3(a-5)
shall be abated.
    (a-10) This subsection (a-10) is applicable to returns due
on and after January 1, 2001. A penalty equal to 2% of the tax
required to be shown due on a return, up to a maximum amount of
$250, reduced by any tax that is paid on time or by any credit
that was properly allowable on the date the return was required
to be filed, shall be imposed for failure to file the tax
return on or before the due date prescribed for filing
determined with regard for any extension of time for filing.
However, if any return is not filed within 30 days after notice
of nonfiling mailed by the Department to the last known address
of the taxpayer contained in Department records, an additional
penalty amount shall be imposed equal to the greater of $250 or
2% of the tax shown on the return. However, the additional
penalty amount may not exceed $5,000 and is determined without
regard to any part of the tax that is paid on time or by any
credit that was properly allowable on the date the return was
required to be filed (penalty for late filing or nonfiling). If
any unprocessable return is corrected and filed within 30 days
after notice by the Department, the late filing or nonfiling
penalty shall not apply. If a penalty for late filing or
nonfiling is imposed in addition to a penalty for late payment,
the total penalty due shall be the sum of the late filing
penalty and the applicable late payment penalty. In the case of
any type of tax return required to be filed more frequently
than annually, when the failure to file the tax return on or
before the date prescribed for filing (including any
extensions) is shown to be nonfraudulent and has not occurred
in the 2 years immediately preceding the failure to file on the
prescribed due date, the penalty imposed by Section 3-3(a-10)
shall be abated.
    (b) This subsection is applicable before January 1, 1998. A
penalty of 15% of the tax shown on the return or the tax
required to be shown due on the return shall be imposed for
failure to pay:
        (1) the tax shown due on the return on or before the
    due date prescribed for payment of that tax, an amount of
    underpayment of estimated tax, or an amount that is
    reported in an amended return other than an amended return
    timely filed as required by subsection (b) of Section 506
    of the Illinois Income Tax Act (penalty for late payment or
    nonpayment of admitted liability); or
        (2) the full amount of any tax required to be shown due
    on a return and which is not shown (penalty for late
    payment or nonpayment of additional liability), within 30
    days after a notice of arithmetic error, notice and demand,
    or a final assessment is issued by the Department. In the
    case of a final assessment arising following a protest and
    hearing, the 30-day period shall not begin until all
    proceedings in court for review of the final assessment
    have terminated or the period for obtaining a review has
    expired without proceedings for a review having been
    instituted. In the case of a notice of tax liability that
    becomes a final assessment without a protest and hearing,
    the penalty provided in this paragraph (2) shall be imposed
    at the expiration of the period provided for the filing of
    a protest.
    (b-5) This subsection is applicable to returns due on and
after January 1, 1998 and on or before December 31, 2000. A
penalty of 20% of the tax shown on the return or the tax
required to be shown due on the return shall be imposed for
failure to pay:
        (1) the tax shown due on the return on or before the
    due date prescribed for payment of that tax, an amount of
    underpayment of estimated tax, or an amount that is
    reported in an amended return other than an amended return
    timely filed as required by subsection (b) of Section 506
    of the Illinois Income Tax Act (penalty for late payment or
    nonpayment of admitted liability); or
        (2) the full amount of any tax required to be shown due
    on a return and which is not shown (penalty for late
    payment or nonpayment of additional liability), within 30
    days after a notice of arithmetic error, notice and demand,
    or a final assessment is issued by the Department. In the
    case of a final assessment arising following a protest and
    hearing, the 30-day period shall not begin until all
    proceedings in court for review of the final assessment
    have terminated or the period for obtaining a review has
    expired without proceedings for a review having been
    instituted. In the case of a notice of tax liability that
    becomes a final assessment without a protest and hearing,
    the penalty provided in this paragraph (2) shall be imposed
    at the expiration of the period provided for the filing of
    a protest.
    (b-10) This subsection (b-10) is applicable to returns due
on and after January 1, 2001 and on or before December 31,
2003. A penalty shall be imposed for failure to pay:
        (1) the tax shown due on a return on or before the due
    date prescribed for payment of that tax, an amount of
    underpayment of estimated tax, or an amount that is
    reported in an amended return other than an amended return
    timely filed as required by subsection (b) of Section 506
    of the Illinois Income Tax Act (penalty for late payment or
    nonpayment of admitted liability). The amount of penalty
    imposed under this subsection (b-10)(1) shall be 2% of any
    amount that is paid no later than 30 days after the due
    date, 5% of any amount that is paid later than 30 days
    after the due date and not later than 90 days after the due
    date, 10% of any amount that is paid later than 90 days
    after the due date and not later than 180 days after the
    due date, and 15% of any amount that is paid later than 180
    days after the due date. If notice and demand is made for
    the payment of any amount of tax due and if the amount due
    is paid within 30 days after the date of the notice and
    demand, then the penalty for late payment or nonpayment of
    admitted liability under this subsection (b-10)(1) on the
    amount so paid shall not accrue for the period after the
    date of the notice and demand.
        (2) the full amount of any tax required to be shown due
    on a return and that is not shown (penalty for late payment
    or nonpayment of additional liability), within 30 days
    after a notice of arithmetic error, notice and demand, or a
    final assessment is issued by the Department. In the case
    of a final assessment arising following a protest and
    hearing, the 30-day period shall not begin until all
    proceedings in court for review of the final assessment
    have terminated or the period for obtaining a review has
    expired without proceedings for a review having been
    instituted. The amount of penalty imposed under this
    subsection (b-10)(2) shall be 20% of any amount that is not
    paid within the 30-day period. In the case of a notice of
    tax liability that becomes a final assessment without a
    protest and hearing, the penalty provided in this
    subsection (b-10)(2) shall be imposed at the expiration of
    the period provided for the filing of a protest.
    (b-15) This subsection (b-15) is applicable to returns due
on and after January 1, 2004 and on or before December 31,
2004. A penalty shall be imposed for failure to pay the tax
shown due or required to be shown due on a return on or before
the due date prescribed for payment of that tax, an amount of
underpayment of estimated tax, or an amount that is reported in
an amended return other than an amended return timely filed as
required by subsection (b) of Section 506 of the Illinois
Income Tax Act (penalty for late payment or nonpayment of
admitted liability). The amount of penalty imposed under this
subsection (b-15)(1) shall be 2% of any amount that is paid no
later than 30 days after the due date, 10% of any amount that
is paid later than 30 days after the due date and not later
than 90 days after the due date, 15% of any amount that is paid
later than 90 days after the due date and not later than 180
days after the due date, and 20% of any amount that is paid
later than 180 days after the due date. If notice and demand is
made for the payment of any amount of tax due and if the amount
due is paid within 30 days after the date of this notice and
demand, then the penalty for late payment or nonpayment of
admitted liability under this subsection (b-15)(1) on the
amount so paid shall not accrue for the period after the date
of the notice and demand.
    (b-20) This subsection (b-20) is applicable to returns due
on and after January 1, 2005.
        (1) A penalty shall be imposed for failure to pay,
    prior to the due date for payment, any amount of tax the
    payment of which is required to be made prior to the filing
    of a return or without a return (penalty for late payment
    or nonpayment of estimated or accelerated tax). The amount
    of penalty imposed under this paragraph (1) shall be 2% of
    any amount that is paid no later than 30 days after the due
    date and 10% of any amount that is paid later than 30 days
    after the due date.
        (2) A penalty shall be imposed for failure to pay the
    tax shown due or required to be shown due on a return on or
    before the due date prescribed for payment of that tax or
    an amount that is reported in an amended return other than
    an amended return timely filed as required by subsection
    (b) of Section 506 of the Illinois Income Tax Act (penalty
    for late payment or nonpayment of tax). The amount of
    penalty imposed under this paragraph (2) shall be 2% of any
    amount that is paid no later than 30 days after the due
    date, 10% of any amount that is paid later than 30 days
    after the due date and prior to the date the Department has
    initiated an audit or investigation of the taxpayer, and
    20% of any amount that is paid after the date the
    Department has initiated an audit or investigation of the
    taxpayer; provided that the penalty shall be reduced to 15%
    if the entire amount due is paid not later than 30 days
    after the Department has provided the taxpayer with an
    amended return (following completion of an occupation,
    use, or excise tax audit) or a form for waiver of
    restrictions on assessment (following completion of an
    income tax audit); provided further that the reduction to
    15% shall be rescinded if the taxpayer makes any claim for
    refund or credit of the tax, penalties, or interest
    determined to be due upon audit, except in the case of a
    claim filed pursuant to subsection (b) of Section 506 of
    the Illinois Income Tax Act or to claim a carryover of a
    loss or credit, the availability of which was not
    determined in the audit. For purposes of this paragraph
    (2), any overpayment reported on an original return that
    has been allowed as a refund or credit to the taxpayer
    shall be deemed to have not been paid on or before the due
    date for payment and any amount paid under protest pursuant
    to the provisions of the State Officers and Employees Money
    Disposition Act shall be deemed to have been paid after the
    Department has initiated an audit and more than 30 days
    after the Department has provided the taxpayer with an
    amended return (following completion of an occupation,
    use, or excise tax audit) or a form for waiver of
    restrictions on assessment (following completion of an
    income tax audit).
        (3) The penalty imposed under this subsection (b-20)
    shall be deemed assessed at the time the tax upon which the
    penalty is computed is assessed, except that, if the
    reduction of the penalty imposed under paragraph (2) of
    this subsection (b-20) to 15% is rescinded because a claim
    for refund or credit has been filed, the increase in
    penalty shall be deemed assessed at the time the claim for
    refund or credit is filed.
    (c) For purposes of the late payment penalties, the basis
of the penalty shall be the tax shown or required to be shown
on a return, whichever is applicable, reduced by any part of
the tax which is paid on time and by any credit which was
properly allowable on the date the return was required to be
filed.
    (d) A penalty shall be applied to the tax required to be
shown even if that amount is less than the tax shown on the
return.
    (e) This subsection (e) is applicable to returns due before
January 1, 2001. If both a subsection (b)(1) or (b-5)(1)
penalty and a subsection (b)(2) or (b-5)(2) penalty are
assessed against the same return, the subsection (b)(2) or
(b-5)(2) penalty shall be assessed against only the additional
tax found to be due.
    (e-5) This subsection (e-5) is applicable to returns due on
and after January 1, 2001. If both a subsection (b-10)(1)
penalty and a subsection (b-10)(2) penalty are assessed against
the same return, the subsection (b-10)(2) penalty shall be
assessed against only the additional tax found to be due.
    (f) If the taxpayer has failed to file the return, the
Department shall determine the correct tax according to its
best judgment and information, which amount shall be prima
facie evidence of the correctness of the tax due.
    (g) The time within which to file a return or pay an amount
of tax due without imposition of a penalty does not extend the
time within which to file a protest to a notice of tax
liability or a notice of deficiency.
    (h) No return shall be determined to be unprocessable
because of the omission of any information requested on the
return pursuant to Section 2505-575 of the Department of
Revenue Law (20 ILCS 2505/2505-575).
    (i) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the penalty imposed by the Department under this
Section shall be imposed in an amount that is 200% of the
amount that would otherwise be imposed under this Section.
    (j) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the penalty imposed by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
(Source: P.A. 92-742, eff. 7-25-02; 93-26, eff. 6-20-03; 93-32,
eff. 6-20-03; 93-1068, eff. 1-15-05.)
 
    (35 ILCS 735/3-4)  (from Ch. 120, par. 2603-4)
    Sec. 3-4. Penalty for failure to file correct information
returns.
    (a) Failure to file correct information returns -
imposition of penalty.
        (1) In general. Unless otherwise provided in a tax Act,
    in the case of a failure described in paragraph (2) of this
    subsection (a) by any person with respect to an information
    return, that person shall pay a penalty of $5 for each
    return or statement with respect to which the failure
    occurs, but the total amount imposed on that person for all
    such failures during any calendar year shall not exceed
    $25,000.
        (2) Failures subject to penalty. The following
    failures are subject to the penalty imposed in paragraph
    (1) of this subsection (a):
            (A) any failure to file an information return with
        the Department on or before the required filing date,
        or
            (B) any failure to include all of the information
        required to be shown on the return or the inclusion of
        incorrect information.
    (b) Reduction where correction in specified period.
        (1) Correction within 60 days. If any failure described
    in subsection (a) (2) is corrected within 60 days after the
    required filing date:
            (A) the penalty imposed by subsection (a) shall be
        reduced by 50%; and
            (B) the total amount imposed on the person for all
        such failures during any calendar year which are so
        corrected shall not exceed 50% of the maximum
        prescribed in subsection (a) (1).
    (c) Information return defined. An information return is
any tax return required by a tax Act to be filed with the
Department that does not, by law, require the payment of a tax
liability.
    (d) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the penalty imposed by the Department under this
Section shall be imposed in an amount that is 200% of the
amount that would otherwise be imposed under this Section.
    (e) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the penalty imposed by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
(Source: P.A. 93-26, eff. 6-20-03.)
 
    (35 ILCS 735/3-5)  (from Ch. 120, par. 2603-5)
    Sec. 3-5. Penalty for negligence.
    (a) If any return or amended return is prepared
negligently, but without intent to defraud, and filed, in
addition to any penalty imposed under Section 3-3 of this Act,
a penalty shall be imposed in an amount equal to 20% of any
resulting deficiency.
    (b) Negligence includes any failure to make a reasonable
attempt to comply with the provisions of any tax Act and
includes careless, reckless, or intentional disregard of the
law or regulations.
    (c) No penalty shall be imposed under this Section if it is
shown that failure to comply with the tax Act is due to
reasonable cause. A taxpayer is not negligent if the taxpayer
shows substantial authority to support the return as filed.
    (d) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the penalty imposed by the Department shall be
imposed in an amount that is 200% of the amount that would
otherwise be imposed in accordance with this Section.
    (e) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the penalty imposed by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
(Source: P.A. 93-26, eff. 6-20-03.)
 
    (35 ILCS 735/3-6)  (from Ch. 120, par. 2603-6)
    Sec. 3-6. Penalty for fraud.
    (a) If any return or amended return is filed with intent to
defraud, in addition to any penalty imposed under Section 3-3
of this Act, a penalty shall be imposed in an amount equal to
50% of any resulting deficiency.
    (b) If any claim is filed with intent to defraud, a penalty
shall be imposed in an amount equal to 50% of the amount
fraudulently claimed for credit or refund.
    (c) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the penalty imposed by the Department under this
Section shall be imposed in an amount that is 200% of the
amount that would otherwise be imposed under this Section.
    (d) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the penalty imposed by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
(Source: P.A. 93-26, eff. 6-20-03.)
 
    (35 ILCS 735/3-7.5)
    Sec. 3-7.5. Bad check penalty.
    (a) In addition to any other penalty provided in this Act,
a penalty of $25 shall be imposed on any person who issues a
check or other draft to the Department that is not honored upon
presentment. The penalty imposed under this Section shall be
deemed assessed at the time of presentment of the check or
other draft and shall be treated for all purposes, including
collection and allocation, as part of the tax or other
liability for which the check or other draft represented
payment.
    (b) If a taxpayer has a tax liability for the taxable
period ending after June 30, 1983 and prior to July 1, 2002
that is eligible for amnesty under the Tax Delinquency Amnesty
Act and the taxpayer fails to satisfy the tax liability during
the amnesty period provided for in that Act for that taxable
period, then the penalty imposed by the Department under this
Section shall be imposed in an amount that is 200% of the
amount that would otherwise be imposed under this Section.
    (c) If a taxpayer has a tax liability for the taxable
period ending after June 30, 2002 and prior to July 1, 2009
that is eligible for amnesty under the Tax Delinquency Amnesty
Act, except for any tax liability reported pursuant to Section
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
is not final, and the taxpayer fails to satisfy the tax
liability during the amnesty period provided for in that Act
for that taxable period, then the penalty imposed by the
Department under this Section shall be imposed in an amount
that is 200% of the amount that would otherwise be imposed
under this Section.
(Source: P.A. 93-26, eff. 6-20-03.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/16/2010