[ Search ] [ Legislation ] [ Bill Summary ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Enrolled ] |
| [ Senate Amendment 002 ] |
90_HB0526sam001
SRS90HB0526NCsaam01
1 AMENDMENT TO HOUSE BILL 526
2 AMENDMENT NO. . Amend House Bill 526, by inserting
3 immediately after Section 5 the following:
4 "Section 10. The Uniform Penalty and Interest Act is
5 amended by changing Section 3-7 as follows:
6 (35 ILCS 735/3-7) (from Ch. 120, par. 2603-7)
7 Sec. 3-7. Personal Liability Penalty.
8 (a) Any officer or employee of any taxpayer subject to
9 the provisions of a tax Act administered by the Department
10 who has the control, supervision or responsibility of filing
11 returns and making payment of the amount of any trust tax
12 imposed in accordance with that Act and who wilfully fails to
13 file the return or make the payment to the Department or
14 wilfully attempts in any other manner to evade or defeat the
15 tax shall be personally liable for a penalty equal to the
16 total amount of tax unpaid by the taxpayer including interest
17 and penalties thereon. The Department shall determine a
18 penalty due under this Section according to its best judgment
19 and information, and that determination shall be prima facie
20 correct and shall be prima facie evidence of a penalty due
21 under this Section. Proof of that determination by the
22 Department shall be made at any hearing before it or in any
-2- SRS90HB0526NCsaam01
1 legal proceeding by reproduced copy or computer printout of
2 the Department's record relating thereto in the name of the
3 Department under the certificate of the Director of Revenue.
4 If reproduced copies of the Department's records are offered
5 as proof of that determination, the Director must certify
6 that those copies are true and exact copies of records on
7 file with the Department. If computer print-outs of the
8 Department's records are offered as proof of such
9 determination, the Director must certify that those computer
10 print-outs are true and exact representations of records
11 properly entered into standard electronic computing
12 equipment, in the regular course of the Department's
13 business, at or reasonably near the time of the occurrence of
14 the facts recorded, from trustworthy and reliable
15 information. That certified reproduced copy or certified
16 computer print-out shall without further proof, be admitted
17 into evidence before the Department or in any legal
18 proceeding and shall be prima facie proof of the correctness
19 of the amount of tax or penalty due.
20 (b) The Department shall issue a notice of penalty
21 liability for the amount claimed by the Department pursuant
22 to this Section. Procedures for protest and review of a
23 notice of penalty liability issued pursuant to this Section
24 and assessment of the penalty due hereunder shall be the same
25 as those prescribed for protest and review of a notice of tax
26 liability or a notice of deficiency, as the case may be, and
27 the assessment of tax liability under the Act imposing that
28 liability.
29 (b-5) Any person filing an action under the
30 Administrative Review Law to review a final assessment or
31 revised final assessment (except a final assessment or
32 revised final assessment relating to any trust tax imposed in
33 accordance with the Illinois Income Tax Act) issued by the
34 Department under this Section shall, within 20 days after
-3- SRS90HB0526NCsaam01
1 filing the complaint, file a bond with good and sufficient
2 surety or sureties residing in this State or licensed to do
3 business in this State, or instead of bond, obtain an order
4 from the court imposing a lien upon the plaintiff's property
5 as hereinafter provided. If the person filing the complaint
6 fails to comply with this bonding requirement within 20 days
7 after filing the complaint, the Department shall file a
8 motion to dismiss and the court shall dismiss the action
9 unless the person filing the action complies with the bonding
10 requirements set out with this provision within 30 days after
11 the filing of the Department's motion to dismiss. A court,
12 on its own motion or on motion of the Department, shall
13 dismiss an action under the Administrative Review Law to
14 review a final assessment or revised final assessment issued
15 by the Department under this Section (i) unless the plaintiff
16 files with the court, within 20 days after the filing of the
17 complaint and the issuance of the summons in the action, a
18 bond with good and sufficient surety or sureties residing in
19 this State or licensed to do business in this State or (ii)
20 unless the court, in place of the bond and with plaintiff's
21 consent, enters an order imposing a lien upon the plaintiff's
22 property as provided in this subsection.
23 Upon dismissal of a complaint for failure to comply with
24 this subsection, the court shall enter judgment against the
25 taxpayer and in favor of the Department in the amount of the
26 final assessment or revised final assessment, together with
27 any interest that has accrued since the Department issued the
28 final assessment or revised final assessment, and for costs.
29 The judgment is enforceable as other judgments for the
30 payment of money.
31 The amount of the bond shall be fixed and approved by the
32 court, but shall not be less than the amount of the tax and
33 penalty claimed to be due by the Department in its final
34 assessment or revised final assessment to the person filing
-4- SRS90HB0526NCsaam01
1 the bond, plus the amount of interest due from that person to
2 the Department at the time when the Department issued its
3 final assessment or revised final assessment to that person.
4 The bond must be executed in favor of the Department and
5 conditioned on the taxpayer's payment within 30 days after
6 termination of the proceedings for judicial review of the
7 amount of tax, penalty, and interest found by the court to be
8 due in those proceedings. The bond, when filed and approved,
9 is, from that time until 2 years after termination of the
10 proceedings for judicial review in which the bond is filed, a
11 lien against the real estate situated in the county in which
12 the bond is filed of the person filing the bond and of the
13 surety or sureties on the bond, until the condition of the
14 bond is complied with or until the bond is canceled as
15 provided in this subsection. The lien does not apply,
16 however, to the real property of a corporate surety duly
17 licensed to do business in this State. If the person filing
18 the bond fails to keep its condition, the bond is forfeited,
19 and the Department may institute an action upon the bond in
20 its own name for the entire amount of the bond and costs. An
21 action upon the bond is in addition to any other remedy
22 provided by law. If the person filing the bond complies with
23 its condition or if, in the proceedings for judicial review
24 in which the bond is filed, the court determines that no tax,
25 penalty, or interest is due, the bond shall be canceled by
26 the issuer of the bond.
27 If the court finds in a particular case that the
28 plaintiff cannot furnish a satisfactory surety or sureties
29 for the kind of bond required in this subsection, the court
30 may relieve the plaintiff of the obligation of filing a bond
31 if, upon the timely application of the plaintiff for a lien
32 in place of a bond and accompanying proof, the court is
33 satisfied that a lien would secure the assessment as well as
34 would a bond. Upon that finding, the court shall enter an
-5- SRS90HB0526NCsaam01
1 order subjecting the plaintiff's real and personal property
2 (including subsequently acquired property) situated in the
3 county in which the order is entered to a lien in favor of
4 the Department. The lien shall be for the amount of the tax
5 and penalty claimed to be due by the Department in its final
6 assessment or revised final assessment, plus the amount of
7 interest due from that person to the Department at the time
8 when the Department issued its final assessment or revised
9 final assessment to that person. The lien shall continue
10 until the court determines in the proceedings for judicial
11 review that no tax, penalty, or interest is due, or until the
12 plaintiff pays to the Department the tax, penalty, and
13 interest secured by the lien. In its discretion, the court
14 may impose a lien regardless of the ratio of the taxpayer's
15 assets to the final assessment or revised final assessment
16 plus the amount of the interest and penalty. This subsection
17 does not give the Department a preference over the rights of
18 a bona fide purchaser, mortgagee, judgment creditor, or other
19 lien holder arising before the entry of the order creating
20 the lien in favor of the Department. "Bona fide", as used in
21 this subsection, does not include a mortgage of real or
22 personal property or other credit transaction that results in
23 the mortgagee or the holder of the security acting as trustee
24 for unsecured creditors of the taxpayer who executed the
25 chattel or real property mortgage or the document evidencing
26 the credit transaction. The lien is inferior to the lien of
27 general taxes, special assessments, and special taxes levied
28 by a political subdivision of this State. The lien is not
29 effective against a purchaser with respect to an item in a
30 retailer's stock in trade purchased from the retailer in the
31 usual course of the retailer's business. The lien may not be
32 enforced against the household effects, wearing apparel,
33 books, or tools or implements of a trade or profession kept
34 for use by any person. The lien is not effective against real
-6- SRS90HB0526NCsaam01
1 property unless and until a certified copy or memorandum of
2 such order is recorded in the Office of the Recorder of Deeds
3 for the county or counties in which the property is located.
4 The lien is not effective against real property whose title
5 is registered under the provisions of the Registered Titles
6 (Torrens) Act until the provisions of Section 85 of that Act
7 are complied with.
8 Service upon the Director of Revenue or the Assistant
9 Director of Revenue of summons issued in an action to review
10 a final administrative decision of the Department is service
11 upon the Department. The Department shall certify the record
12 of its proceedings if the taxpayer pays to it 75¢ per page of
13 testimony taken before the Department and 25¢ per page of all
14 other matters contained in the record, except that these
15 charges may be waived when the Department is satisfied that
16 the aggrieved party is a poor person who cannot afford to pay
17 the charges. If payment for the record is not made by the
18 taxpayer within 30 days after notice from the Department or
19 the Attorney General of the cost, the court in which the
20 proceeding is pending, on motion of the Department, shall
21 dismiss the complaint and (when the administrative decision
22 as to which the action for judicial review was filed is a
23 final assessment or revised final assessment) shall enter
24 judgment against the taxpayer and in favor of the Department
25 for the amount of tax and penalty shown by the Department's
26 final assessment or revised final assessment to be due, plus
27 interest as provided for in this Act from the date when the
28 liability upon which the interest accrued became delinquent
29 until the entry of the judgment in the action for judicial
30 review under the Administrative Review Law, and also for
31 costs.
32 (c) The personal liability imposed by this Section shall
33 survive the dissolution of a partnership, limited liability
34 company, or corporation. No notice of penalty liability
-7- SRS90HB0526NCsaam01
1 shall be issued after the expiration of 3 years after the
2 date all proceedings in court for the review of any final or
3 revised final assessments issued against a taxpayer which
4 constitute the basis of such penalty liability have
5 terminated or the time for the taking thereof has expired
6 without such proceedings being instituted or after the
7 expiration of 3 years after the date a return is filed with
8 the Department by a taxpayer in cases where the return
9 constitutes the basis of such liability. Interest shall
10 continue to accrue on that portion of the penalty imposed by
11 this Section which represents the tax unpaid by the taxpayer
12 at the same rate and in the same amount as interest accrues
13 on the tax unpaid by the taxpayer.
14 (d) In addition to any other remedy provided for by the
15 laws of this State, and provided that no hearing or
16 proceeding for review is pending, any Section of a tax Act
17 which provides a means for collection of taxes shall in the
18 same manner and to the same extent provide a means for the
19 collection of the penalty imposed by this Section. The
20 procedures for the filing of an action for collection of the
21 penalty imposed by this Section shall be the same as those
22 prescribed by a tax Act for the filing of an action for
23 collection of the tax assessed under that Act. The time
24 limitation period on the Department's right to bring suit to
25 recover the amount of such tax, or portion thereof, or
26 penalty or interest from such person, or if deceased or
27 incompetent to file a claim thereof against his estate, shall
28 not run during: (1) any period of time in which the order of
29 any Court has the effect of enjoining or restraining the
30 Department from bringing such suit or claim against such
31 person, or (2) any period of time in which the order of the
32 Court has the effect of enjoining or restraining the
33 Department from bringing suit or initiating other proper
34 proceedings for the collection of such amounts from the
-8- SRS90HB0526NCsaam01
1 taxpayer, or (3) any period of time the person departs from
2 and remains out of the State; but the foregoing provisions
3 concerning absence from the State shall not apply to any case
4 in which, at the time when a tax or penalty becomes due under
5 this Act, the person allegedly liable therefor is not a
6 resident of this State.
7 (e) For the purposes of this Section, "officer or
8 employee of any taxpayer" includes a partner of a
9 partnership, a manager or member of a limited liability
10 corporation, and a member of a registered limited liability
11 partnership.
12 (f) A trust tax is any tax for which an amount is
13 collected or withheld by a taxpayer from another person, and
14 any tax for which an amount is required to be collected or
15 withheld by a taxpayer from another person, regardless of
16 whether it is in fact collected or withheld.
17 (g) The personal liability imposed by this Section is in
18 addition to liability incurred by a partner of a partnership
19 or limited liability partnership resulting from the issuance
20 of a notice of tax liability issued to the partnership or
21 limited liability partnership.
22 (Source: P.A. 88-480; 88-683, eff. 1-24-95; 89-399, eff.
23 8-20-95; 89-626, eff. 8-9-96.)
24 Section 99. Effective date. This Act takes effect upon
25 becoming law.".