State of Illinois
92nd General Assembly
Legislation

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92_SB2209enr

 
SB2209 Enrolled                                LRB9212101SMdv

 1        AN ACT concerning taxes.

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

 4        Section 5.  The  Uniform  Penalty  and  Interest  Act  is
 5    amended by changing Section 3-3 as follows:

 6        (35 ILCS 735/3-3) (from Ch. 120, par. 2603-3)
 7        Sec. 3-3.  Penalty for failure to file or pay.
 8        (a)  This  subsection (a) is applicable before January 1,
 9    1996.  A penalty of 5% of the tax required to be shown due on
10    a return shall be imposed for failure to file the tax  return
11    on  or  before  the due date prescribed for filing determined
12    with regard for any extension of time for filing (penalty for
13    late filing or nonfiling).  If any  unprocessable  return  is
14    corrected  and  filed  within  21  days  after  notice by the
15    Department, the late filing or nonfiling  penalty  shall  not
16    apply.   If a penalty for late filing or nonfiling is imposed
17    in addition to a penalty for late payment, the total  penalty
18    due  shall  be  the  sum  of  the late filing penalty and the
19    applicable late payment penalty. Beginning on  the  effective
20    date  of this amendatory Act of 1995, in the case of any type
21    of tax return required  to  be  filed  more  frequently  than
22    annually,  when  the  failure  to  file  the tax return on or
23    before  the  date  prescribed  for  filing   (including   any
24    extensions) is shown to be nonfraudulent and has not occurred
25    in  the  2 years immediately preceding the failure to file on
26    the prescribed due  date,  the  penalty  imposed  by  Section
27    3-3(a) shall be abated.
28        (a-5)  This subsection (a-5) is applicable to returns due
29    on  and  after  January 1, 1996 and on or before December 31,
30    2000. A penalty equal to 2% of the tax required to  be  shown
31    due  on  a return, up to a maximum amount of $250, determined
 
SB2209 Enrolled             -2-                LRB9212101SMdv
 1    without regard to any part of the tax that is paid on time or
 2    by any credit that was properly allowable  on  the  date  the
 3    return was required to be filed, shall be imposed for failure
 4    to  file  the tax return on or before the due date prescribed
 5    for filing determined with regard for any extension  of  time
 6    for  filing.  However,  if  any return is not filed within 30
 7    days after notice of nonfiling mailed by  the  Department  to
 8    the   last   known  address  of  the  taxpayer  contained  in
 9    Department records, an additional  penalty  amount  shall  be
10    imposed  equal  to the greater of $250 or 2% of the tax shown
11    on the return.  However, the additional  penalty  amount  may
12    not  exceed  $5,000  and  is determined without regard to any
13    part of the tax that is paid on time or by  any  credit  that
14    was properly allowable on the date the return was required to
15    be  filed  (penalty  for  late  filing or nonfiling).  If any
16    unprocessable return is corrected and filed  within  30  days
17    after  notice by the Department, the late filing or nonfiling
18    penalty shall not apply.  If a penalty  for  late  filing  or
19    nonfiling  is  imposed  in  addition  to  a  penalty for late
20    payment, the total penalty due shall be the sum of  the  late
21    filing  penalty and the applicable late payment penalty.   In
22    the case of any type of tax return required to be filed  more
23    frequently  than  annually,  when the failure to file the tax
24    return on or before the date prescribed for filing (including
25    any extensions) is shown to  be  nonfraudulent  and  has  not
26    occurred  in the 2 years immediately preceding the failure to
27    file on the prescribed  due  date,  the  penalty  imposed  by
28    Section 3-3(a-5) shall be abated.
29        (a-10)  This  subsection  (a-10) is applicable to returns
30    due on and after January 1, 2001.  A penalty equal to  2%  of
31    the tax required to be shown due on a return, up to a maximum
32    amount of $250, reduced by any tax that is paid on time or by
33    any credit that was properly allowable on the date the return
34    was  required  to  be  filed, shall be imposed for failure to
 
SB2209 Enrolled             -3-                LRB9212101SMdv
 1    file the tax return on or before the due date prescribed  for
 2    filing  determined  with regard for any extension of time for
 3    filing. However, if any return is not filed  within  30  days
 4    after  notice  of  nonfiling  mailed by the Department to the
 5    last known address of the taxpayer  contained  in  Department
 6    records,  an additional penalty amount shall be imposed equal
 7    to the greater of $250 or 2% of the tax shown on the  return.
 8    However,  the additional penalty amount may not exceed $5,000
 9    and is determined without regard to any part of the tax  that
10    is  paid on time or by any credit that was properly allowable
11    on the date the return was required to be filed (penalty  for
12    late  filing  or  nonfiling).  If any unprocessable return is
13    corrected and filed  within  30  days  after  notice  by  the
14    Department,  the  late  filing or nonfiling penalty shall not
15    apply.  If a penalty for late filing or nonfiling is  imposed
16    in  addition to a penalty for late payment, the total penalty
17    due shall be the sum of  the  late  filing  penalty  and  the
18    applicable late payment penalty.   In the case of any type of
19    tax   return  required  to  be  filed  more  frequently  than
20    annually, when the failure to  file  the  tax  return  on  or
21    before   the   date  prescribed  for  filing  (including  any
22    extensions) is shown to be nonfraudulent and has not occurred
23    in the 2 years immediately preceding the failure to  file  on
24    the  prescribed  due  date,  the  penalty  imposed by Section
25    3-3(a-10) shall be abated.
26        (b)  This subsection  is  applicable  before  January  1,
27    1998.  A penalty of 15% of the tax shown on the return or the
28    tax required to be shown due on the return shall  be  imposed
29    for failure to pay:
30             (1)  the  tax  shown  due on the return on or before
31        the due date prescribed  for  payment  of  that  tax,  an
32        amount  of  underpayment  of  estimated tax, or an amount
33        that is reported in  an  amended  return  other  than  an
34        amended return timely filed as required by subsection (b)
 
SB2209 Enrolled             -4-                LRB9212101SMdv
 1        of  Section  506  of the Illinois Income Tax Act (penalty
 2        for late payment or nonpayment of admitted liability); or
 3             (2)  the full amount of any tax required to be shown
 4        due on a return and which is not shown (penalty for  late
 5        payment or nonpayment of additional liability), within 30
 6        days  after  a  notice  of  arithmetic  error, notice and
 7        demand,  or  a  final  assessment  is   issued   by   the
 8        Department.  In  the  case  of a final assessment arising
 9        following a protest and hearing, the 30-day period  shall
10        not  begin  until  all proceedings in court for review of
11        the final assessment have terminated or  the  period  for
12        obtaining  a review has expired without proceedings for a
13        review having been instituted.  In the case of  a  notice
14        of  tax liability that becomes a final assessment without
15        a protest and  hearing,  the  penalty  provided  in  this
16        paragraph  (2)  shall be imposed at the expiration of the
17        period provided for the filing of a protest.
18        (b-5)  This subsection is applicable to  returns  due  on
19    and after January 1, 1998 and on or before December 31, 2000.
20    A  penalty  of  20% of the tax shown on the return or the tax
21    required to be shown due on the return shall be  imposed  for
22    failure to pay:
23             (1)  the  tax  shown  due on the return on or before
24        the due date prescribed  for  payment  of  that  tax,  an
25        amount  of  underpayment  of  estimated tax, or an amount
26        that is reported in  an  amended  return  other  than  an
27        amended return timely filed as required by subsection (b)
28        of  Section  506  of the Illinois Income Tax Act (penalty
29        for late payment or nonpayment of admitted liability); or
30             (2)  the full amount of any tax required to be shown
31        due on a return and which is not shown (penalty for  late
32        payment or nonpayment of additional liability), within 30
33        days  after  a  notice  of  arithmetic  error, notice and
34        demand,  or  a  final  assessment  is   issued   by   the
 
SB2209 Enrolled             -5-                LRB9212101SMdv
 1        Department.  In  the  case  of a final assessment arising
 2        following a protest and hearing, the 30-day period  shall
 3        not  begin  until  all proceedings in court for review of
 4        the final assessment have terminated or  the  period  for
 5        obtaining  a review has expired without proceedings for a
 6        review having been instituted.  In the case of  a  notice
 7        of  tax liability that becomes a final assessment without
 8        a protest and  hearing,  the  penalty  provided  in  this
 9        paragraph  (2)  shall be imposed at the expiration of the
10        period provided for the filing of a protest.
11        (b-10)  This subsection (b-10) is applicable  to  returns
12    due on and after January 1, 2001.  A penalty shall be imposed
13    for failure to pay:
14             (1)  the  tax shown due on a return on or before the
15        due date prescribed for payment of that tax, an amount of
16        underpayment of estimated  tax,  or  an  amount  that  is
17        reported  in  an  amended  return  other  than an amended
18        return timely filed as  required  by  subsection  (b)  of
19        Section  506  of the Illinois Income Tax Act (penalty for
20        late payment or nonpayment of admitted  liability).   The
21        amount of penalty imposed under this subsection (b-10)(1)
22        shall  be  2% of any amount that is paid no later than 30
23        days after the due date, 5% of any amount  that  is  paid
24        later  than 30 days after the due date and not later than
25        90 days after the due date, 10% of  any  amount  that  is
26        paid  later than 90 days after the due date and not later
27        than 180 days after the due date, and 15% of  any  amount
28        that  is  paid later than 180 days after the due date. If
29        notice and demand is made for the payment of  any  amount
30        of  tax  due and if the amount due is paid within 30 days
31        after the date of the notice and demand, then the penalty
32        for late payment  or  nonpayment  of  admitted  liability
33        under  this  subsection  (b-10)(1)  on the amount so paid
34        shall not accrue for the period after  the  date  of  the
 
SB2209 Enrolled             -6-                LRB9212101SMdv
 1        notice and demand.
 2             (2)  the full amount of any tax required to be shown
 3        due  on  a return and that is not shown (penalty for late
 4        payment or nonpayment of additional liability), within 30
 5        days after a  notice  of  arithmetic  error,  notice  and
 6        demand,   or   a   final  assessment  is  issued  by  the
 7        Department.  In the case of a  final  assessment  arising
 8        following  a protest and hearing, the 30-day period shall
 9        not begin until all proceedings in court  for  review  of
10        the  final  assessment  have terminated or the period for
11        obtaining a review has expired without proceedings for  a
12        review  having  been  instituted.   The amount of penalty
13        imposed under this subsection (b-10)(2) shall be  20%  of
14        any amount that is not paid within the 30-day period.  In
15        the  case  of  a  notice  of tax liability that becomes a
16        final assessment  without  a  protest  and  hearing,  the
17        penalty  provided  in  this subsection (b-10)(2) shall be
18        imposed at the expiration of the period provided for  the
19        filing of a protest.
20        (c)  For  purposes  of  the  late  payment penalties, the
21    basis of the penalty shall be the tax shown or required to be
22    shown on a return, whichever is applicable,  reduced  by  any
23    part of the tax which is paid on time and by any credit which
24    was properly allowable on the date the return was required to
25    be filed.
26        (d)  A penalty shall be applied to the tax required to be
27    shown  even  if that amount is less than the tax shown on the
28    return.
29        (e)  This subsection (e) is  applicable  to  returns  due
30    before  January  1,  2001.  If  both  a  subsection (b)(1) or
31    (b-5)(1) penalty and a subsection (b)(2) or (b-5)(2)  penalty
32    are  assessed  against the same return, the subsection (b)(2)
33    or (b-5)(2)  penalty  shall  be  assessed  against  only  the
34    additional tax found to be due.
 
SB2209 Enrolled             -7-                LRB9212101SMdv
 1        (e-5)  This subsection (e-5) is applicable to returns due
 2    on and after January 1, 2001.  If both a subsection (b-10)(1)
 3    penalty  and  a  subsection  (b-10)(2)  penalty  are assessed
 4    against the same return,  the  subsection  (b-10)(2)  penalty
 5    shall be assessed against only the additional tax found to be
 6    due.
 7        (f)  If  the  taxpayer has failed to file the return, the
 8    Department shall determine the correct tax according  to  its
 9    best  judgment  and  information, which amount shall be prima
10    facie evidence of the correctness of the tax due.
11        (g)  The time within which to file a  return  or  pay  an
12    amount  of  tax  due without imposition of a penalty does not
13    extend the time within which to file a protest to a notice of
14    tax liability or a notice of deficiency.
15        (h)  No return shall be determined  to  be  unprocessable
16    because  of  the omission of any information requested on the
17    return pursuant to Section  2505-575  of  the  Department  of
18    Revenue Law (20 ILCS 2505/2505-575).
19    (Source: P.A.  90-491,  eff.  1-1-98;  90-548,  eff. 12-4-97;
20    91-239, eff. 1-1-00; 91-803, eff. 1-1-01.)

21        Section 99.  Effective date.  This Act takes effect  upon
22    becoming law.

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