SB 2604 — UPIA-FAILURE TO FILE

*LRB10016523HLH31655b* SB2604 100THEngrossed GENERALLRB100 ASSEMBLY16523 StateHLH of31655 Illinoisb andAN 2018ACT SB2604concerning Introducedrevenue. 2/7/2018, by Sen.

Pamela J.

Althoff SYNOPSIS AS INTRODUCED:

ILCS 735/3-3 from Ch.

120, par.

2603-3 ILCS 735/3-9 from Ch.

120, par.

2603-9 Amends the Uniform Penalty and Interest Act.

Provides that the penalty for failure to pay the tax shown due or required to be shown due on a return shall be 15% (instead of 20%) of any amount that is paid after the date the Department of Revenue has initiated an audit or investigation of the taxpayer.

Provides that the penalty shall be abated if the taxpayer paid to the Department at least 95% of the total tax liability (including any additional liability resulting from the audit or investigation) prior to the initiation of the audit or investigation.

Effective January 1, 2019.

LRB100 16523 HLH 31655 b FISCAL NOTE ACT MAY APPLY A BILL FOR SB2604 LRB100 16523 HLH 31655 b AN ACT concerning revenue.

Beginning on the effective date of this amendatory Act of 1995, in the case of any type of tax return required to be filed more frequently than annually, when the failure to file the tax return on or before the date prescribed for filing (including any extensions) is shown to be nonfraudulent and has SB2604 Engrossed - 2 - LRB100 16523 HLH 31655 b not occurred in the 2 years immediately preceding the failure to file on the prescribed due date, the penalty imposed by Section 3-3(a) shall be abated.

If a penalty for late filing or nonfiling is imposed in addition to a penalty for late payment, the total penalty due shall be the sum of the late filing SB2604 Engrossed - 3 - LRB100 16523 HLH 31655 b penalty and the applicable late payment penalty.

If any unprocessable return is corrected and filed within 30 days SB2604 Engrossed - 4 - LRB100 16523 HLH 31655 b after notice by the Department, the late filing or nonfiling penalty shall not apply.

If such a transaction reporting return would result in the imposition of a tax when properly prepared and filed, then that return is subject to the provisions of SB2604 Engrossed - 5 - LRB100 16523 HLH 31655 b subsection (a-10).

In the case of a notice of tax liability that becomes a final assessment without a protest and hearing, the penalty provided in this paragraph (2) shall be imposed at the expiration of the period provided for the filing of SB2604 Engrossed - 6 - LRB100 16523 HLH 31655 b a protest.

In the case of a notice of tax liability that becomes a final assessment without a protest and hearing, the penalty provided in this paragraph (2) shall be imposed SB2604 Engrossed - 7 - LRB100 16523 HLH 31655 b at the expiration of the period provided for the filing of a protest.

SB2604 Engrossed - 8 - LRB100 16523 HLH 31655 b (2) the full amount of any tax required to be shown due on a return and that is not shown (penalty for late payment or nonpayment of additional liability), within 30 days after a notice of arithmetic error, notice and demand, or a final assessment is issued by the Department.

A penalty shall be imposed for failure to pay the tax shown due or required to be shown due on a return on or before the due date prescribed for payment of that tax, an amount of underpayment of estimated tax, or an amount that is reported in an amended return other than an amended return timely filed as required by subsection (b) of Section 506 of the Illinois Income Tax Act (penalty for late payment or nonpayment of SB2604 Engrossed - 9 - LRB100 16523 HLH 31655 b admitted liability).

(2) A penalty shall be imposed for failure to pay the SB2604 Engrossed - 10 - LRB100 16523 HLH 31655 b tax shown due or required to be shown due on a return on or before the due date prescribed for payment of that tax or an amount that is reported in an amended return other than an amended return timely filed as required by subsection (b) of Section 506 of the Illinois Income Tax Act (penalty for late payment or nonpayment of tax).

the entire amount due is paid not later than 30 days after the Department has provided the taxpayer with an amended return (following SB2604 Engrossed - 11 - LRB100 16523 HLH 31655 b completion of an occupation, use, or excise tax audit) or a form for waiver of restrictions on assessment (following completion of an income tax audit);

(3) The penalty imposed under this subsection (b-20) shall be deemed assessed at the time the tax upon which the penalty is computed is assessed, except that, if the reduction of the penalty imposed under paragraph (2) of SB2604 Engrossed - 12 - LRB100 16523 HLH 31655 b this subsection (b-20) to 15% is rescinded because a claim for refund or credit has been filed, the increase in penalty shall be deemed assessed at the time the claim for refund or credit is filed.

(f) If the taxpayer has failed to file the return, the Department shall determine the correct tax according to its SB2604 Engrossed - 13 - LRB100 16523 HLH 31655 b best judgment and information, which amount shall be prima facie evidence of the correctness of the tax due.

(j) If a taxpayer has a tax liability for the taxable period ending after June 30, 2002 and prior to July 1, 2009 that is eligible for amnesty under the Tax Delinquency Amnesty Act, except for any tax liability reported pursuant to Section 506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that is not final, and the taxpayer fails to satisfy the tax liability during the amnesty period provided for in that Act for that taxable period, then the penalty imposed by the SB2604 Engrossed - 14 - LRB100 16523 HLH 31655 b Department under this Section shall be imposed in an amount that is 200% of the amount that would otherwise be imposed under this Section.

This Act takes effect January SB2604 Engrossed - 15 - LRB100 16523 HLH 31655 b 1, 2019.