State of Illinois
92nd General Assembly

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 1                    AMENDMENT TO SENATE BILL 1176

 2        AMENDMENT NO.     .  Amend Senate Bill 1176  on  page  1,
 3    line 6, after "2505-210", by inserting ", 2505-275,"; and

 4    on  page  2,  immediately  below  line  17,  by inserting the
 5    following:

 6        "(20 ILCS 2505/2505-275) (was 20 ILCS 2505/39e)
 7        Sec.  2505-275.  Tax  overpayments.  In   the   case   of
 8    overpayment   of  any  tax  liability  arising  from  an  Act
 9    administered by the Department, the Department may credit the
10    amount of the overpayment and any  interest  thereon  against
11    any  final  tax liability arising under that or any other Act
12    administered by the Department. The Department may enter into
13    agreements with the Secretary of the Treasury of  the  United
14    States  (or  his or her delegate) to offset all or part of an
15    overpayment of such a tax  liability  against  any  liability
16    arising  from  a  tax  imposed  under  Title 26 of the United
17    States Code. The  Department  may  collect  a  fee  from  the
18    Secretary of the Treasury of the United States (or his or her
19    delegate)  to  cover  the  full cost of offsets taken, to the
20    extent allowed by federal law.
21    (Source: P.A. 91-239, eff. 1-1-00.)"; and

22    on page  3,  immediately  below  line  4,  by  inserting  the
                            -2-            LRB9205953SMdvam01
 1    following:
 2        "(c)  The  Department  may  issue  the  Secretary  of the
 3    Treasury of the  United  States  (or  his  or  her  delegate)
 4    notice,  as  required  by  Section  6402(e)  of  the Internal
 5    Revenue Code, of any  past  due,  legally  enforceable  State
 6    income  tax  obligation  of  a  taxpayer. The Department must
 7    notify the taxpayer that any fee charged to the State by  the
 8    Secretary of the Treasury of the United States (or his or her
 9    delegate)  under  Internal  Revenue  Code  Section 6402(e) is
10    considered additional State income tax of the  taxpayer  with
11    respect  to  whom  the  Department  issued the notice, and is
12    deemed assessed upon issuance by the Department of notice  to
13    the Secretary of the Treasury of the United States (or his or
14    her  delegate)  under Section 6402(e) of the Internal Revenue
15    Code;  a  notice  of  additional  State  income  tax  is  not
16    considered a notice of deficiency, and the  taxpayer  has  no
17    right of protest."; and

18    on  page  3,  line 7, after "601.1", by inserting "and adding
19    Section 911.2"; and

20    on page  5,  immediately  below  line  5,  by  inserting  the
21    following:

22        "(35 ILCS 5/911.2 new)
23        Sec.  911.2.   Refunds  withheld;  tax  claims  of  other
24    states.
25        (a)  Definitions.   In  this  Section the following terms
26    have the meanings indicated.
27        "Claimant state" means  any  state  or  the  District  of
28    Columbia  that  requests the withholding of a refund pursuant
29    to this Section and  that  extends  a  like  comity  for  the
30    collection of taxes owed to this State.
31        "Income  tax"  means  any amount of income tax imposed on
32    taxpayers under the laws of the  State  of  Illinois  or  the
                            -3-            LRB9205953SMdvam01
 1    claimant  state, including additions to tax for penalties and
 2    interest.
 3        "Refund" means a refund of overpaid income taxes  imposed
 4    by the State of Illinois or the claimant state.
 5        "Tax  officer"  means  a unit or official of the claimant
 6    state, or the duly authorized agent of that unit or official,
 7    charged with the imposition,  assessment,  or  collection  of
 8    state income taxes.
 9        "Taxpayer"  means  any  person  identified  by a claimant
10    state under this Section as  owing  taxes  to  that  claimant
11    state, and in the case of a refund arising from the filing of
12    a joint return, the taxpayer's spouse.
13        (b)  In general.  Except as provided in subsection (c) of
14    this Section, a tax officer may:
15             (1)  certify  to  the  Director  the  existence of a
16        taxpayer's delinquent income tax liability; and
17             (2)  request the Director to withhold any refund  to
18        which the taxpayer is entitled.
19        (c)  Comity.   A  tax  officer may not certify or request
20    the Director to withhold a refund  unless  the  laws  of  the
21    claimant state:
22             (1)  allow  the  Director  to  certify an income tax
23        liability;
24             (2)  allow the Director to request the  tax  officer
25        to withhold the taxpayer's tax refund; and
26             (3)  provide  for  the  payment of the refund to the
27        State of Illinois.
28        (d)  Certification.  A certification by a tax officer  to
29    the Director shall include:
30             (1)  the  full  name and address of the taxpayer and
31        any other names known to be used by the taxpayer;
32             (2)  the  social  security  number  or  federal  tax
33        identification number of the taxpayer;
34             (3)  the amount of the income tax liability; and
                            -4-            LRB9205953SMdvam01
 1             (4)  a  statement  that   all   administrative   and
 2        judicial remedies and appeals have been exhausted or have
 3        lapsed  and  that  the  assessment  of tax, interest, and
 4        penalty has become final.
 5        (e)  Notification.  As to any taxpayer due a refund,  the
 6    Director shall:
 7             (1)  notify  the  taxpayer that a claimant state has
 8        provided certification of the existence of an income  tax
 9        liability;
10             (2)  inform   the  taxpayer  of  the  tax  liability
11        certified,  including  a  detailed  statement  for   each
12        taxable year showing tax, interest, and penalty;
13             (3)  inform  the  taxpayer  that  failure  to file a
14        protest in accordance with subsection (f) of this Section
15        shall constitute a waiver  of  any  demand  against  this
16        State for the amount certified and will result in payment
17        to  the  claimant  state as provided in subsection (i) of
18        this Section;
19             (4)  provide  the  taxpayer  with   notice   of   an
20        opportunity   to  request  a  hearing  to  challenge  the
21        certification; and
22             (5)  inform the taxpayer that  the  hearing  may  be
23        requested  (i)   pursuant  to Section 910 of this Act, or
24        (ii) with the tax officer, in accordance with the laws of
25        the claimant state.
26        (f)  Protest of withholding.  A taxpayer may protest  the
27    withholding  of  a refund pursuant to Section 910 of this Act
28    (except that the protest shall be filed within 30 days  after
29    the  date  of the Director's notice of certification pursuant
30    to subsection (e) of this Section).  If a  taxpayer  files  a
31    timely protest, the Director shall:
32             (1)  suspend  the  proposed  withholding and impound
33        the claimed amount of the refund;
34             (2)  pay to the taxpayer the unclaimed amount of the
                            -5-            LRB9205953SMdvam01
 1        refund, if any;
 2             (3)  send a copy of  the  protest  to  the  claimant
 3        state  for  determination of the protest on its merits in
 4        accordance with the laws of that state; and
 5             (4)  pay over to the taxpayer the  impounded  amount
 6        if  the  claimant  state shall fail, within 45 days after
 7        the date of the protest, to re-certify  to  the  Director
 8        (i)  that  the  claimant  state  has  reviewed the issues
 9        raised by taxpayer,  (ii)  that  all  administrative  and
10        judicial  remedies  provided under the laws of that state
11        have been exhausted, and (iii) the amount of  the  income
12        tax liability finally determined to be due.
13        (g)  Certification  as  prima  facie  evidence.   If  the
14    taxpayer  requests  a hearing pursuant to Section 910 of this
15    Act, the certification of the  tax  officer  shall  be  prima
16    facie   evidence   of   the  correctness  of  the  taxpayer's
17    delinquent income tax liability to the certifying state.
18        (h)  Rights of spouses to refunds from joint returns.  If
19    a certification is based  upon  the  tax  debt  of  only  one
20    taxpayer  and  if  the  refund is based upon a joint personal
21    income tax return, the nondebtor spouse shall have the  right
22    to:
23             (1)  notification,  as provided in subsection (e) of
24        this Section;
25             (2)  protest, as to the withholding of such spouse's
26        share of the refund, as provided  in  subsection  (f)  of
27        this Section; and
28             (3)  payment  of  his  or  her  share of the refund,
29        provided the amount of the overpayment  refunded  to  the
30        spouse   shall   not  exceed  the  amount  of  the  joint
31        overpayment.
32        (i)  Withholding and payment of refund.  Subject  to  the
33    taxpayer's  rights  of  notice and protest, upon receipt of a
34    request for withholding in accordance with subsection (b)  of
                            -6-            LRB9205953SMdvam01
 1    this Section, the Director shall:
 2             (1)  withhold  any  refund  that is certified by the
 3        tax officer;
 4             (2)  pay to the claimant state the entire refund  or
 5        the amount certified, whichever is less;
 6             (3)  pay   any   refund  in  excess  of  the  amount
 7        certified to the taxpayer; and
 8             (4)  if a refund is less than the amount  certified,
 9        withhold   amounts   from   subsequent  refunds  due  the
10        taxpayer, if the laws of the claimant state provide  that
11        the  claimant  state shall withhold subsequent refunds of
12        taxpayers certified to that state by the Director.
13        (j)  Determination  that  withholding  cannot  be   made.
14    After  receiving  a  certification  from  a  tax officer, the
15    Director shall notify the  claimant  state  if  the  Director
16    determines that a withholding cannot be made.
17        (k)  Director's  authority.   The Director shall have the
18    authority to enter into agreements with the tax  officers  of
19    claimant state relating to:
20             (1)  procedures  and  methods  to  be  employed by a
21        claimant state with respect  to  the  operation  of  this
22        Section;
23             (2)  safeguards    against    the    disclosure   or
24        inappropriate  use  of  any   information   obtained   or
25        maintained  pursuant  to  this  Section  that identifies,
26        directly or indirectly, a particular taxpayer;
27             (3)  a minimum tax debt,  amounts  below  which,  in
28        light  of  administrative expenses and efficiency, shall,
29        in the Director's  discretion,  not  be  subject  to  the
30        withholding procedures set forth in this Section.
31        (l)  Remedy  not  exclusive.   The  collection procedures
32    prescribed by this Section are in addition  to,  and  not  in
33    substitution for, any other remedy available by law.".

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