New Tax Amnesty Program in Illinois

State and Local Tax

By Matthew Dodge

The governor of Illinois, Pat Quinn, signed into law an amnesty program for outstanding Illinois taxes. The amnesty program runs from October 1, 2010 to November 8, 2010 and covers taxes due after June 30, 2002 and before July 1, 2009. The Illinois Department of Revenue will mail notices over the course of the next month to taxpayers eligible for amnesty.

In a new twist to the carrot and stick approach, the amnesty legislation offers the elimination of all interest in addition to the usual abatement of related penalties. Taxpayers must pay all taxes due during the amnesty period or lose the benefits of amnesty. In addition, tax liabilities that are not paid during amnesty are subject to penalties and interest at double the applicable rates. Taxpayers who do not receive an amnesty notice may participate in Illinois voluntary disclosure program as an alternative to amnesty. Penalties are normally abated in voluntary disclosure and taxpayers may apply to have interest abated as well. However, it remains to be seen how the Illinois Department of Revenue will handle interest abatement during the amnesty period.

Amnesty is not available to any party subject to criminal or civil investigation and/or pending litigation for nonpayment, delinquency, or fraud for a state tax.


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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

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