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Full Text of SB2921  99th General Assembly

SB2921sam001 99TH GENERAL ASSEMBLY

Sen. Toi W. Hutchinson

Filed: 3/18/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 2921

2    AMENDMENT NO. ______. Amend Senate Bill 2921 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Uniform Penalty and Interest Act is amended
5by changing Sections 3-3 and 3-9 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,
91996. A penalty of 5% of the tax required to be shown due on a
10return shall be imposed for failure to file the tax return on
11or before the due date prescribed for filing determined with
12regard for any extension of time for filing (penalty for late
13filing or nonfiling). If any unprocessable return is corrected
14and filed within 21 days after notice by the Department, the
15late filing or nonfiling penalty shall not apply. If a penalty
16for late filing or nonfiling is imposed in addition to a

 

 

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1penalty for late payment, the total penalty due shall be the
2sum of the late filing penalty and the applicable late payment
3penalty. Beginning on the effective date of this amendatory Act
4of 1995, in the case of any type of tax return required to be
5filed more frequently than annually, when the failure to file
6the tax return on or before the date prescribed for filing
7(including any extensions) is shown to be nonfraudulent and has
8not occurred in the 2 years immediately preceding the failure
9to file on the prescribed due date, the penalty imposed by
10Section 3-3(a) shall be abated.
11    (a-5) This subsection (a-5) is applicable to returns due on
12and after January 1, 1996 and on or before December 31, 2000. A
13penalty equal to 2% of the tax required to be shown due on a
14return, up to a maximum amount of $250, determined without
15regard to any part of the tax that is paid on time or by any
16credit that was properly allowable on the date the return was
17required to be filed, shall be imposed for failure to file the
18tax return on or before the due date prescribed for filing
19determined with regard for any extension of time for filing.
20However, if any return is not filed within 30 days after notice
21of nonfiling mailed by the Department to the last known address
22of the taxpayer contained in Department records, an additional
23penalty amount shall be imposed equal to the greater of $250 or
242% of the tax shown on the return. However, the additional
25penalty amount may not exceed $5,000 and is determined without
26regard to any part of the tax that is paid on time or by any

 

 

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1credit that was properly allowable on the date the return was
2required to be filed (penalty for late filing or nonfiling). If
3any unprocessable return is corrected and filed within 30 days
4after notice by the Department, the late filing or nonfiling
5penalty shall not apply. If a penalty for late filing or
6nonfiling is imposed in addition to a penalty for late payment,
7the total penalty due shall be the sum of the late filing
8penalty and the applicable late payment penalty. In the case of
9any type of tax return required to be filed more frequently
10than annually, when the failure to file the tax return on or
11before the date prescribed for filing (including any
12extensions) is shown to be nonfraudulent and has not occurred
13in the 2 years immediately preceding the failure to file on the
14prescribed due date, the penalty imposed by Section 3-3(a-5)
15shall be abated.
16    (a-10) This subsection (a-10) is applicable to returns due
17on and after January 1, 2001. A penalty equal to 2% of the tax
18required to be shown due on a return, up to a maximum amount of
19$250, reduced by any tax that is paid on time or by any credit
20that was properly allowable on the date the return was required
21to be filed, shall be imposed for failure to file the tax
22return on or before the due date prescribed for filing
23determined with regard for any extension of time for filing.
24However, if any return is not filed within 30 days after notice
25of nonfiling mailed by the Department to the last known address
26of the taxpayer contained in Department records, an additional

 

 

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1penalty amount shall be imposed equal to the greater of $250 or
22% of the tax shown on the return. However, the additional
3penalty amount may not exceed $5,000 and is determined without
4regard to any part of the tax that is paid on time or by any
5credit that was properly allowable on the date the return was
6required to be filed (penalty for late filing or nonfiling). If
7any unprocessable return is corrected and filed within 30 days
8after notice by the Department, the late filing or nonfiling
9penalty shall not apply. If a penalty for late filing or
10nonfiling is imposed in addition to a penalty for late payment,
11the total penalty due shall be the sum of the late filing
12penalty and the applicable late payment penalty. In the case of
13any type of tax return required to be filed more frequently
14than annually, when the failure to file the tax return on or
15before the date prescribed for filing (including any
16extensions) is shown to be nonfraudulent and has not occurred
17in the 2 years immediately preceding the failure to file on the
18prescribed due date, the penalty imposed by this subsection
19(a-10) shall be abated. This subsection (a-10) does not apply
20to transaction reporting returns required by Section 3 of the
21Retailers' Occupation Tax Act and Section 9 of the Use Tax Act
22that would not, when properly prepared and filed, result in the
23imposition of a tax; however, those returns are subject to the
24penalty set forth in subsection (a-15).
25    (a-15) A penalty of $100 shall be imposed for failure to
26file a transaction reporting return required by Section 3 of

 

 

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1the Retailers' Occupation Tax Act and Section 9 of the Use Tax
2Act on or before the date a return is required to be filed;
3provided, however, that this penalty shall be imposed only if
4the return when properly prepared and filed would not result in
5the imposition of a tax. If such a transaction reporting return
6would result in the imposition of a tax when properly prepared
7and filed, then that return is subject to the provisions of
8subsection (a-10).
9    (b) This subsection is applicable before January 1, 1998. A
10penalty of 15% of the tax shown on the return or the tax
11required to be shown due on the return shall be imposed for
12failure to pay:
13        (1) the tax shown due on the return on or before the
14    due date prescribed for payment of that tax, an amount of
15    underpayment of estimated tax, or an amount that is
16    reported in an amended return other than an amended return
17    timely filed as required by subsection (b) of Section 506
18    of the Illinois Income Tax Act (penalty for late payment or
19    nonpayment of admitted liability); or
20        (2) the full amount of any tax required to be shown due
21    on a return and which is not shown (penalty for late
22    payment or nonpayment of additional liability), within 30
23    days after a notice of arithmetic error, notice and demand,
24    or a final assessment is issued by the Department. In the
25    case of a final assessment arising following a protest and
26    hearing, the 30-day period shall not begin until all

 

 

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1    proceedings in court for review of the final assessment
2    have terminated or the period for obtaining a review has
3    expired without proceedings for a review having been
4    instituted. In the case of a notice of tax liability that
5    becomes a final assessment without a protest and hearing,
6    the penalty provided in this paragraph (2) shall be imposed
7    at the expiration of the period provided for the filing of
8    a protest.
9    (b-5) This subsection is applicable to returns due on and
10after January 1, 1998 and on or before December 31, 2000. A
11penalty of 20% of the tax shown on the return or the tax
12required to be shown due on the return shall be imposed for
13failure to pay:
14        (1) the tax shown due on the 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 return
18    timely filed as required by subsection (b) of Section 506
19    of the Illinois Income Tax Act (penalty for late payment or
20    nonpayment of admitted liability); or
21        (2) the full amount of any tax required to be shown due
22    on a return and which is not shown (penalty for late
23    payment or nonpayment of additional liability), within 30
24    days after a notice of arithmetic error, notice and demand,
25    or a final assessment is issued by the Department. In the
26    case of a final assessment arising following a protest and

 

 

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1    hearing, the 30-day period shall not begin until all
2    proceedings in court for review of the final assessment
3    have terminated or the period for obtaining a review has
4    expired without proceedings for a review having been
5    instituted. In the case of a notice of tax liability that
6    becomes a final assessment without a protest and hearing,
7    the penalty provided in this paragraph (2) shall be imposed
8    at the expiration of the period provided for the filing of
9    a protest.
10    (b-10) This subsection (b-10) is applicable to returns due
11on and after January 1, 2001 and on or before December 31,
122003. A penalty shall be imposed for failure to pay:
13        (1) the tax shown due on a return on or before the due
14    date prescribed for payment of that tax, an amount of
15    underpayment of estimated tax, or an amount that is
16    reported in an amended return other than an amended return
17    timely filed as required by subsection (b) of Section 506
18    of the Illinois Income Tax Act (penalty for late payment or
19    nonpayment of admitted liability). The amount of penalty
20    imposed under this subsection (b-10)(1) shall be 2% of any
21    amount that is paid no later than 30 days after the due
22    date, 5% of any amount that is paid later than 30 days
23    after the due date and not later than 90 days after the due
24    date, 10% of any amount that is paid later than 90 days
25    after the due date and not later than 180 days after the
26    due date, and 15% of any amount that is paid later than 180

 

 

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1    days after the due date. If notice and demand is made for
2    the payment of any amount of tax due and if the amount due
3    is paid within 30 days after the date of the notice and
4    demand, then the penalty for late payment or nonpayment of
5    admitted liability under this subsection (b-10)(1) on the
6    amount so paid shall not accrue for the period after the
7    date of the notice and demand.
8        (2) the full amount of any tax required to be shown due
9    on a return and that is not shown (penalty for late payment
10    or nonpayment of additional liability), within 30 days
11    after a notice of arithmetic error, notice and demand, or a
12    final assessment is issued by the Department. In the case
13    of a final assessment arising following a protest and
14    hearing, the 30-day period shall not begin until all
15    proceedings in court for review of the final assessment
16    have terminated or the period for obtaining a review has
17    expired without proceedings for a review having been
18    instituted. The amount of penalty imposed under this
19    subsection (b-10)(2) shall be 20% of any amount that is not
20    paid within the 30-day period. In the case of a notice of
21    tax liability that becomes a final assessment without a
22    protest and hearing, the penalty provided in this
23    subsection (b-10)(2) shall be imposed at the expiration of
24    the period provided for the filing of a protest.
25    (b-15) This subsection (b-15) is applicable to returns due
26on and after January 1, 2004 and on or before December 31,

 

 

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12004. A penalty shall be imposed for failure to pay the tax
2shown due or required to be shown due on a return on or before
3the due date prescribed for payment of that tax, an amount of
4underpayment of estimated tax, or an amount that is reported in
5an amended return other than an amended return timely filed as
6required by subsection (b) of Section 506 of the Illinois
7Income Tax Act (penalty for late payment or nonpayment of
8admitted liability). The amount of penalty imposed under this
9subsection (b-15)(1) shall be 2% of any amount that is paid no
10later than 30 days after the due date, 10% of any amount that
11is paid later than 30 days after the due date and not later
12than 90 days after the due date, 15% of any amount that is paid
13later than 90 days after the due date and not later than 180
14days after the due date, and 20% of any amount that is paid
15later than 180 days after the due date. If notice and demand is
16made for the payment of any amount of tax due and if the amount
17due is paid within 30 days after the date of this notice and
18demand, then the penalty for late payment or nonpayment of
19admitted liability under this subsection (b-15)(1) on the
20amount so paid shall not accrue for the period after the date
21of the notice and demand.
22    (b-20) This subsection (b-20) is applicable to returns due
23on and after January 1, 2005.
24        (1) A penalty shall be imposed for failure to pay,
25    prior to the due date for payment, any amount of tax the
26    payment of which is required to be made prior to the filing

 

 

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1    of a return or without a return (penalty for late payment
2    or nonpayment of estimated or accelerated tax). The amount
3    of penalty imposed under this paragraph (1) shall be 2% of
4    any amount that is paid no later than 30 days after the due
5    date and 10% of any amount that is paid later than 30 days
6    after the due date.
7        (2) A penalty shall be imposed for failure to pay the
8    tax shown due or required to be shown due on a return on or
9    before the due date prescribed for payment of that tax or
10    an amount that is reported in an amended return other than
11    an amended return timely filed as required by subsection
12    (b) of Section 506 of the Illinois Income Tax Act (penalty
13    for late payment or nonpayment of tax). The amount of
14    penalty imposed under this paragraph (2) shall be 2% of any
15    amount that is paid no later than 30 days after the due
16    date, 10% of any amount that is paid later than 30 days
17    after the due date and prior to the date the Department has
18    initiated an audit or investigation of the taxpayer, and
19    15% 20% of any amount that is paid after the date the
20    Department has initiated an audit or investigation of the
21    taxpayer; provided that the penalty under this paragraph
22    (2) shall be abated reduced to 15% if, prior to the
23    initiation of the audit or investigation, the taxpayer paid
24    to the Department at least 95% of the total tax liability
25    for the filing period, which includes any additional
26    liability resulting from the audit or investigation. No

 

 

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1    claim for credit or refund is allowed for any penalty paid
2    prior to the effective date of this amendatory Act of the
3    99th General Assembly based on the changes made by this
4    amendatory Act of the 99th General Assembly. the entire
5    amount due is paid not later than 30 days after the
6    Department has provided the taxpayer with an amended return
7    (following completion of an occupation, use, or excise tax
8    audit) or a form for waiver of restrictions on assessment
9    (following completion of an income tax audit); provided
10    further that the reduction to 15% shall be rescinded if the
11    taxpayer makes any claim for refund or credit of the tax,
12    penalties, or interest determined to be due upon audit,
13    except in the case of a claim filed pursuant to subsection
14    (b) of Section 506 of the Illinois Income Tax Act or to
15    claim a carryover of a loss or credit, the availability of
16    which was not determined in the audit. For purposes of this
17    paragraph (2), any overpayment reported on an original
18    return that has been allowed as a refund or credit to the
19    taxpayer shall be deemed to have not been paid on or before
20    the due date for payment and any amount paid under protest
21    pursuant to the provisions of the State Officers and
22    Employees Money Disposition Act shall be deemed to have
23    been paid after the Department has initiated an audit and
24    more than 30 days after the Department has provided the
25    taxpayer with an amended return (following completion of an
26    occupation, use, or excise tax audit) or a form for waiver

 

 

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1    of restrictions on assessment (following completion of an
2    income tax audit).
3        (3) The penalty imposed under this subsection (b-20)
4    shall be deemed assessed at the time the tax upon which the
5    penalty is computed is assessed, except that, if the
6    reduction of the penalty imposed under paragraph (2) of
7    this subsection (b-20) to 15% is rescinded because a claim
8    for refund or credit has been filed, the increase in
9    penalty shall be deemed assessed at the time the claim for
10    refund or credit is filed.
11    (c) For purposes of the late payment penalties, the basis
12of the penalty shall be the tax shown or required to be shown
13on a return, whichever is applicable, reduced by any part of
14the tax which is paid on time and by any credit which was
15properly allowable on the date the return was required to be
16filed.
17    (d) A penalty shall be applied to the tax required to be
18shown even if that amount is less than the tax shown on the
19return.
20    (e) This subsection (e) is applicable to returns due before
21January 1, 2001. If both a subsection (b)(1) or (b-5)(1)
22penalty and a subsection (b)(2) or (b-5)(2) penalty are
23assessed against the same return, the subsection (b)(2) or
24(b-5)(2) penalty shall be assessed against only the additional
25tax found to be due.
26    (e-5) This subsection (e-5) is applicable to returns due on

 

 

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1and after January 1, 2001. If both a subsection (b-10)(1)
2penalty and a subsection (b-10)(2) penalty are assessed against
3the same return, the subsection (b-10)(2) penalty shall be
4assessed against only the additional tax found to be due.
5    (f) If the taxpayer has failed to file the return, the
6Department shall determine the correct tax according to its
7best judgment and information, which amount shall be prima
8facie evidence of the correctness of the tax due.
9    (g) The time within which to file a return or pay an amount
10of tax due without imposition of a penalty does not extend the
11time within which to file a protest to a notice of tax
12liability or a notice of deficiency.
13    (h) No return shall be determined to be unprocessable
14because of the omission of any information requested on the
15return pursuant to Section 2505-575 of the Department of
16Revenue Law (20 ILCS 2505/2505-575).
17    (i) If a taxpayer has a tax liability for the taxable
18period ending after June 30, 1983 and prior to July 1, 2002
19that is eligible for amnesty under the Tax Delinquency Amnesty
20Act and the taxpayer fails to satisfy the tax liability during
21the amnesty period provided for in that Act for that taxable
22period, then the penalty imposed by the Department under this
23Section shall be imposed in an amount that is 200% of the
24amount that would otherwise be imposed under this Section.
25    (j) If a taxpayer has a tax liability for the taxable
26period ending after June 30, 2002 and prior to July 1, 2009

 

 

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1that is eligible for amnesty under the Tax Delinquency Amnesty
2Act, except for any tax liability reported pursuant to Section
3506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
4is not final, and the taxpayer fails to satisfy the tax
5liability during the amnesty period provided for in that Act
6for that taxable period, then the penalty imposed by the
7Department under this Section shall be imposed in an amount
8that is 200% of the amount that would otherwise be imposed
9under this Section.
10(Source: P.A. 98-425, eff. 8-16-13; 99-335, eff. 8-10-15.)
 
11    (35 ILCS 735/3-9)  (from Ch. 120, par. 2603-9)
12    Sec. 3-9. Application of provisions.
13    (a) The provisions of this Act shall apply to the rates of
14interest for periods on and after the effective date of this
15Act. Interest for periods prior to the effective date of this
16Act shall be computed at the rates in effect prior to that
17date.
18    (b) Except as otherwise provided in subsection (b-20) of
19Section 3-3, penalties Penalties shall be imposed at the rate
20and in the manner in effect at the time the tax liability
21became due.
22    (c) Interest shall not be paid on claims filed after the
23effective date of this Act except such interest which is paid
24in accordance with this Act.
25    (d) Payments received from a taxpayer shall be applied

 

 

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1against the outstanding liability of the taxpayer, or to an
2agreed portion of the outstanding liability, in the following
3order: the principal amount of the tax, then penalty, and then
4interest.
5(Source: P.A. 87-205.)
 
6    Section 99. Effective date. This Act takes effect January
71, 2017.".