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Illinois Tax Delinquency Amnesty Program: Available One More Month!

Brian Kelley

Oct 11 2019

3 min read

Pay IL Taxes by November 15th to Avoid Penalties and Interest

Beginning this month Illinois is offering a program where taxpayers can voluntarily report and pay in underreported state taxes and/or unfiled tax returns without having to incur any penalties or interest.

Am I Eligible for the IL Tax Amnesty Program and How Do I File?

To be eligible the taxes must be related to tax periods ending after June 30, 2011 and prior to July 1, 2018 and be collected by the Illinois Department of Revenue (ex – income and sales taxes). Taxes that do not qualify include property, insurance, and motor fuel taxes. In order to participate you must file an original return for non-filed periods or file an amended return to make corrections, along with payment of any additional taxes owed, by November 15th.

What if I am under audit by the IL Department of Revenue?

You can still take advantage of the tax amnesty program even if you are under audit. Just estimate the amount of taxes that you believe will be owed and work with the auditor to pay the taxes by November 15th. If additional amounts are assessed, then interest and penalties could apply on those amounts. If you ended up paying more than what was due, then Illinois will refund the excess but without interest. For audits completed prior to November 15th, the entire audit tax liability will need to be paid.

What if I am in Collections?

Liabilities that are in collections can be paid and receive tax amnesty relief assuming all other qualifications are met. Just contact the collection agency and work with them to make payment via the tax amnesty program.

Are There Better Options?

For taxpayers that are non-filers and need to catch up on prior period tax returns, pursuing a formal voluntary disclosure agreement may be a better option then this amnesty program. The voluntary disclosure program does not typically abate interest, but it does allow for a limited 4-year look back period and you can include the more current tax periods that do not currently qualify for the amnesty program.

Don’t Forget About Illinois Franchise Tax Amnesty

As part of recent law changes IL will be phasing out its franchise tax over a four-year period beginning in 2020 but before it goes away, IL is encouraging corporations to come forward and pay any outstanding or underpaid franchise tax liabilities. The franchise tax is administered by the Illinois Secretary of State’s office and is imposed on corporations that are doing business in Illinois at a rate of 0.1% of the corporation’s Illinois Capital. If these franchise taxes have not been paid or have been underpaid, then you may want to consider taking advantage of this amnesty program to receive abatement of penalties and interest. Here is a link to the application form to participate in the Franchise Tax amnesty program which covers periods from March 15th, 2008 through June 30th, 2019 and ends on November 15th.

Questions

For more information, please refer to the Illinois Department of Revenue amnesty website or feel free to contact your Sikich tax representative.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

About the Author

Brian Kelley

Brian Kelley, CPA, MST, is a managing director of State & Local Tax (SALT) Services, who has focused exclusively on SALT services for over 25 years. In his role, he performs seller and buyer-side multi-state tax due diligence, nexus studies, and negotiates voluntary disclosures and audit defense.