Double the Fun – 2019 Illinois Amnesty Programs

Presenters/Authors
Glasses, calculator, pencil and paper lying on desk

Illinois Governor J.B. Pritzker signed Illinois Senate Bill 689 into law on June 5, 2019, as Public Act 101-0009 (Act). The Act includes a number of tax provisions, including a general tax amnesty program per amendments to 35 ILCS 745/10 and a franchise tax amnesty program per amendments to 805 ILCS 8/5-10.

General Tax Amnesty

The Department of Revenue (DOR) is required to offer an amnesty program running from October 1, 2019, through November 15, 2019. The amnesty will cover any tax administered by the DOR for tax liabilities due after June 30, 2011, and prior to July 1, 2018. Participating taxpayers will be permitted abatement of all associated penalties and/or interest, and the DOR won’t pursue any civil or criminal prosecution related to the taxes paid. While most taxpayers will be eligible for amnesty, the program excludes taxpayers who are a party to any criminal investigation or to any civil or criminal litigation that’s pending in any circuit court, appellate court or the Illinois Supreme Court for nonpayment, delinquency or fraud in relation to any Illinois tax imposed by any Illinois law. Further, amnesty will be invalidated if the participant fails to pay all taxes due to the state.

Some key points:

  • Unlike prior amnesty programs offered by Illinois, double interest and double penalties won’t apply to taxpayers who decline to participate and are later assessed a deficiency by the DOR.
  • Participation in the amnesty program doesn’t preclude a taxpayer from claiming a refund for an overpayment of tax on an issue unrelated to the issues for which the taxpayer claimed amnesty or for an overpayment of tax by taxpayers estimating a nonfinal liability for the amnesty program.
  • There’s a gap period where no tax amnesty is applicable, since the prior amnesty program covered the tax liabilities due prior to July 1, 2009, and the pending amnesty program covers periods beginning July 1, 2011.
  • The DOR will be issuing additional guidance prior to the start of the amnesty program.

Franchise Tax Amnesty

Under similar provisions to the above general tax amnesty program, the Act also includes a franchise tax amnesty program. The Illinois secretary of state is required to offer an amnesty program running from October 1, 2019, through November 15, 2019, for any franchise tax or business license fee liabilities due for any tax period ending after March 15, 2008, and prior to July 1, 2019. Participating taxpayers will be permitted abatement of all associated penalties and/or interest, and the secretary of state won’t pursue any civil or criminal prosecution related to the taxes paid. While most taxpayers will be eligible for amnesty, the program excludes taxpayers who are a party to any criminal investigation or to any civil or criminal litigation that’s pending in any circuit court, appellate court or the Illinois Supreme Court for nonpayment, delinquency or fraud in relation to any franchise tax or license fee imposed by Article XV of the Business Corporation Act of 1983.

Some key points:

  • Failure to be current with any other taxes due to the state of Illinois doesn’t invalidate taxpayers from participating in the franchise tax amnesty program.
  • Unlike the general tax amnesty program, there’s no open non-amnesty period between the prior amnesty program, which covered the tax liabilities due through March 15, 2008, and the pending amnesty program, which covers periods beginning after March 15, 2008.
  • BKD anticipates that the secretary of state will issue additional guidance prior to the start of the amnesty program.
  • The Act also includes an overall repeal of the franchise tax via a phased-in tax exemption, as follows:

Tax Liability Examption

These amnesty programs offer noncompliant taxpayers a limited opportunity to resolve issues with their Illinois tax obligations on favorable terms and with little to no prospective downside. To learn more about the amnesty programs or for assistance with determining your potential Illinois tax exposures and amnesty eligibility, contact your BKD trusted advisor or use the Contact Us form below.


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