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Public Act 103-0098
Public Act 0098 103RD GENERAL ASSEMBLY
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Public Act 103-0098
| | SB1641 Enrolled | LRB103 00122 HLH 45126 b |
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| AN ACT concerning revenue.
| Be it enacted by the People of the State of Illinois,
| represented in the General Assembly:
| Section 5. The Uniform Penalty and Interest Act is amended | by changing Section 3-3 as follows:
| (35 ILCS 735/3-3) (from Ch. 120, par. 2603-3)
| Sec. 3-3. Penalty for failure to file or pay.
| (a) This subsection (a) is applicable before January 1, | 1996. A penalty
of 5% of the tax required to be shown due on a | return shall be
imposed for failure to file the tax return on | or before the due date prescribed
for filing determined with | regard for any extension of time for filing
(penalty
for late | filing or nonfiling). If any unprocessable return is corrected | and
filed within 21 days after notice by the Department, the | late filing or
nonfiling penalty shall not apply. 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 penalty and the applicable late payment
| penalty.
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 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.
| (a-5) This subsection (a-5) is applicable to returns due | on and after
January 1, 1996 and on or before December 31, | 2000.
A penalty equal to 2% of
the tax required to be shown due | on a return, up to a maximum amount of $250,
determined without | regard to any part of the tax that is paid on time or by any
| credit that was properly allowable on the date the return was | required to be
filed, shall be
imposed for failure to file the | tax return on or before the due date prescribed
for filing | determined with regard for any extension of time for filing.
| However, if any return is not filed within 30 days after notice | of nonfiling
mailed by the Department to the last known | address of the taxpayer contained in
Department records, an | additional penalty amount shall be imposed equal to the
| greater of $250 or 2% of the tax shown on the return. However, | the additional
penalty amount may not exceed $5,000 and is | determined without regard to any
part of the tax that is paid | on time or by any credit that was properly
allowable on the | date the return was required to be filed (penalty
for late | filing or nonfiling). If any unprocessable return is corrected | and
filed within 30 days after notice by the Department, the | late filing or
nonfiling penalty shall not apply. 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 penalty and the applicable late payment
| penalty.
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 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-5) shall be abated.
| (a-10) This subsection (a-10) is applicable to returns due | on and after
January 1, 2001.
A penalty equal to 2% of
the tax | required to be shown due on a return, up to a maximum amount of | $250,
reduced by any tax that is
paid on time or by any
credit | that was properly allowable on the date the return was | required to be
filed, shall be
imposed for failure to file the | tax return on or before the due date prescribed
for filing | determined with regard for any extension of time for filing.
| However, if any return is not filed within 30 days after notice | of nonfiling
mailed by the Department to the last known | address of the taxpayer contained in
Department records, an | additional penalty amount shall be imposed equal to the
| greater of $250 or 2% of the tax shown on the return. However, | the additional
penalty amount may not exceed $5,000 and is | determined without regard to any
part of the tax that is paid | on time or by any credit that was properly
allowable on the | date the return was required to be filed (penalty
for late | filing or nonfiling). If any unprocessable return is corrected |
| and
filed within 30 days after notice by the Department, the | late filing or
nonfiling penalty shall not apply. 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 penalty and the applicable late payment
| penalty.
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 not occurred in the 2 years immediately preceding the
| failure to file on the prescribed due date, the penalty | imposed by this subsection (a-10) shall be abated. This | subsection (a-10) does not apply to transaction reporting | returns required by Section 3 of the Retailers' Occupation Tax | Act and Section 9 of the Use Tax Act that would not, when | properly prepared and filed, result in the imposition of a | tax; however, those returns are subject to the penalty set | forth in subsection (a-15).
| (a-15) A penalty of $100 shall be imposed for failure to | file a transaction reporting return required by Section 3 of | the Retailers' Occupation Tax Act and Section 9 of the Use Tax | Act on or before the date a return is required to be filed; | provided, however, that this penalty shall be imposed only if | the return when properly prepared and filed would not result | in the imposition of a tax. 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 subsection (a-10). | (b) This subsection is applicable before January 1, 1998.
| A penalty of 15% of the tax shown on the return or the tax | required to
be shown due on the return shall be imposed for | failure to pay:
| (1) the tax shown due on the 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 admitted liability);
or
| (2) the full amount of any tax required to be shown due | on a
return and which 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.
| In the case of a final assessment arising following a | protest and hearing,
the 30-day period shall not begin | until all proceedings in court for review of
the final | assessment have terminated or the period for obtaining a | review has
expired without proceedings for a review having | been instituted. 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 a protest.
| (b-5) This subsection is applicable to returns due on and | after January
1, 1998 and on or before December 31, 2000.
A | penalty of 20% of the tax shown on the return or the tax | required to be
shown due on the return shall be imposed for | failure to
pay:
| (1) the tax shown due on the 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 admitted liability);
or
| (2) the full amount of any tax required to be shown due | on a
return and which 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.
| In the case of a final assessment arising following a | protest and hearing,
the 30-day period shall not begin | until all proceedings in court for review of
the final | assessment have terminated or the period for obtaining a | review has
expired without proceedings for a review having | been instituted. 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 a protest.
| (b-10) This subsection (b-10) is applicable to returns due | on and after
January 1, 2001 and on or before December 31, | 2003. A penalty shall be
imposed for failure to pay:
| (1) the tax 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 admitted liability). The amount of
| penalty imposed under this subsection (b-10)(1) shall be | 2% of any amount that
is paid no later than 30 days after | the due date, 5% of any amount that is
paid later than 30 | days after the due date and not later than 90 days after
| the due date, 10% of any amount that is paid later than 90 | days after the due
date and not later than 180 days after | the due date, and 15% of any amount that
is paid later than | 180 days after the
due date.
If notice and demand is made | for the payment of any amount of tax due and if
the amount | due is paid within 30 days after the date of the notice and | demand,
then the penalty for late payment or nonpayment of | admitted liability under
this subsection (b-10)(1) on the | amount so paid shall not accrue for the period
after the |
| date of the notice and demand.
| (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. In the | case of a
final assessment arising following a protest and | hearing, the 30-day period
shall not begin until all | proceedings in court for review of the final
assessment | have terminated or the period for obtaining a review has | expired
without proceedings for a review having been | instituted. The amount of penalty
imposed under this | subsection (b-10)(2) shall be 20% of any amount that is | not
paid within the 30-day period. In the case of a notice | of tax liability that
becomes a final assessment without a | protest and hearing, the penalty provided
in this | subsection (b-10)(2) shall be imposed at the expiration of | the period
provided for the filing of a protest.
| (b-15) This subsection (b-15) is applicable to returns due | on and after
January 1, 2004 and on or before December 31, | 2004. 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 | admitted liability). The amount of
penalty imposed under this | subsection (b-15)(1) shall be 2% of any amount that
is paid no | later than 30 days after the due date, 10% of any amount that | is
paid later than 30 days after the due date and not later | than 90 days after the
due date, 15% of any amount that is paid | later than 90 days after the due date
and not later than 180 | days after the due date, and 20% of any amount that is
paid | later than 180 days after the due date. If notice and demand is | made for
the payment of any amount of tax due and if the amount | due is paid within 30
days after the date of this notice and | demand, then the penalty for late
payment or nonpayment of | admitted liability under this subsection (b-15)(1) on
the | amount so paid shall not accrue for the period after the date | of the notice
and demand.
| (b-20) This subsection (b-20) is applicable to returns due | on and after January 1, 2005 and before January 1, 2024. | (1) A penalty shall be imposed for failure to pay, | prior to the due date for payment, any amount of tax the | payment of which is required to be made prior to the filing | of a return or without a return (penalty for late payment | or nonpayment of estimated or accelerated tax). The amount | of penalty imposed under this paragraph (1) shall be 2% of | any amount that is paid no later than 30 days after the due | date and 10% of any amount that is paid later than 30 days | after the due date. |
| (2) 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 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 amount of | penalty imposed under this paragraph (2) shall be 2% of | any amount that is paid no later than 30 days after the due | date, 10% of any amount that is paid later than 30 days | after the due date and prior to the date the Department has | initiated an audit or investigation of the taxpayer, and | 20% of any amount that is paid after the date the | Department has initiated an audit or investigation of the | taxpayer; provided that the penalty shall be reduced to | 15% if the entire amount due is paid not later than 30 days | after the Department has provided the taxpayer with an | amended return (following 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); provided further that the reduction to | 15% shall be rescinded if the taxpayer makes any claim for | refund or credit of the tax, penalties, or interest | determined to be due upon audit, except in the case of a | claim filed pursuant to subsection (b) of Section 506 of | the Illinois Income Tax Act or to claim a carryover of a |
| loss or credit, the availability of which was not | determined in the audit. For purposes of this paragraph | (2), any overpayment reported on an original return that | has been allowed as a refund or credit to the taxpayer | shall be deemed to have not been paid on or before the due | date for payment and any amount paid under protest | pursuant to the provisions of the State Officers and | Employees Money Disposition Act shall be deemed to have | been paid after the Department has initiated an audit and | more than 30 days after the Department has provided the | taxpayer with an amended return (following 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 | 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.
| (b-25) This subsection (b-25) is applicable to returns due | on or after January 1, 2024. | (1) A penalty shall be imposed for failure to pay, | prior to the due date for payment, any amount of tax the |
| payment of which is required to be made prior to the filing | of a return or without a return (penalty for late payment | or nonpayment of estimated or accelerated tax). The amount | of penalty imposed under this paragraph (1) shall be 2% of | any amount that is paid no later than 30 days after the due | date and 10% of any amount that is paid later than 30 days | after the due date. | (2) 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 | (penalty for late payment or nonpayment of tax). The | amount of penalty imposed under this paragraph (2) shall | be 2% of any amount that is paid no later than 30 days | after the due date, 10% of any amount that is paid later | than 30 days after the due date and prior to the date the | Department initiates an audit or investigation of the | taxpayer, and 20% of any amount that is paid after the date | the Department initiates an audit or investigation of the | taxpayer; provided that the penalty shall be reduced to | 15% if the entire amount due is paid not later than 30 days | after the Department provides the taxpayer with an amended | return (following 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); | provided further that the reduction to 15% shall be | rescinded if the taxpayer makes any claim for refund or |
| credit of the tax, penalties, or interest determined to be | due upon audit, except in the case of a claim filed | pursuant to subsection (b) of Section 506 of the Illinois | Income Tax Act or to claim a carryover of a loss or credit, | the availability of which was not determined in the audit. | For purposes of this paragraph (2): | (A) any overpayment reported on an original return | that has been allowed as a refund or credit to the | taxpayer shall be deemed to have not been paid on or | before the due date for payment; | (B) any amount paid under protest pursuant to the | provisions of the State Officers and Employees Money | Disposition Act shall be deemed to have been paid | after the Department has initiated an audit and more | than 30 days after the Department has provided the | taxpayer with an amended return (following 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); and | (C) any liability resulting from a federal change | required to be reported under subsection (b) of | Section 506 of the Illinois Income Tax Act that is | reported and paid no later than the due date for filing | the federal change amended return shall be deemed to | have been paid on or before the due date prescribed for | payment. |
| (3) The penalty imposed under this subsection (b-25) 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 this subsection (b-25) | 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. | (c) For purposes of the late payment penalties, the basis | of the penalty
shall be the tax shown or required to be shown | on a return, whichever is
applicable, reduced by any part of | the tax which is paid on time and by any
credit which was | properly allowable on the date the return was required to
be | filed.
| (d) A penalty shall be applied to the tax required to be | shown even if
that amount is less than the tax shown on the | return.
| (e) This subsection (e) is applicable to returns due | before January 1,
2001.
If both a subsection (b)(1) or | (b-5)(1) penalty and a subsection (b)(2)
or (b-5)(2) penalty | are assessed against the same return, the subsection
(b)(2) or | (b-5)(2) penalty shall
be assessed against only the additional | tax found to be due.
| (e-5) This subsection (e-5) is applicable to returns due | on and after
January 1, 2001.
If both a subsection (b-10)(1) | penalty and a subsection
(b-10)(2) penalty are assessed | against the same return,
the subsection (b-10)(2) penalty |
| shall be assessed against
only the additional tax found to be | due.
| (f) If the taxpayer has failed to file the return, the | Department shall
determine the correct tax according to its | best judgment and information,
which amount shall be prima | facie evidence of the correctness of the tax due.
| (g) The time within which to file a return or pay an amount | of tax due
without imposition of a penalty does not extend the | time within which to
file a protest to a notice of tax | liability or a notice of deficiency.
| (h) No return shall be determined to be unprocessable | because of the
omission of any information requested on the | return pursuant to Section
2505-575
of the Department of | Revenue Law (20 ILCS 2505/2505-575).
| (i) If a taxpayer has a tax liability for the taxable | period ending after June 30,
1983 and prior to July 1, 2002 | that is eligible for amnesty under the
Tax Delinquency Amnesty | Act 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 Department under this | Section shall be imposed in an amount that is 200% of
the | amount that would otherwise be imposed under this Section.
| (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 | Department under this Section shall be imposed in an amount | that is 200% of
the amount that would otherwise be imposed | under this Section. | (Source: P.A. 98-425, eff. 8-16-13; 99-335, eff. 8-10-15.)
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Effective Date: 1/1/2024
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