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92_SB2209eng SB2209 Engrossed 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 Engrossed -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 Engrossed -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 Engrossed -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 Engrossed -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 Engrossed -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 Engrossed -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.