Public Act 103-0098
 
SB1641 EnrolledLRB103 00122 HLH 45126 b


  
    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.)

  


Effective Date:  1/1/2024