Illinois Tax Tribunal

FINALLY SOME HOPE FOR SMALL BUSINESSES THAT HAVE ISSUES WITH THE ILLINOIS DEPARTMENT OF REVENUE

If you have a small business and you are having tax troubles with the Illinois Department of Revenue, there is still hope.  For that matter, if you are an accountant or tax advisor that have client’s that have these issues, there is a different process to consider.

Although I guarantee that you will be sleeping by the time you are done reading this blog, hopefully you will gain some knowledge before you nod off on how you can help your small business maneuver and resolve its tax issues.

When you get a notice from the Illinois Department of Revenue send it to your tax advisor and your attorney.

If the Department sends you a Notice of Tax Liability, Notice of Deficiency or Notice of Claim Denial that involve tax liabilities that exceed $15,000, or you receive any tax-collection notices of any kind, please do not put your head into the sand.  Instead, you should discuss your rights immediately with your tax advisor or an attorney familiar with these type of matters to navigate through this complicated process.  There is no need for you to deal with it, because there is a process that your attorney can assist you with.

Finally, you are innocent until proven guilty.  

Prior to January, 2014, it was very difficult to contest the decisions of the Department of Revenue.

However, gloriously in January, 2014, Tim Foley, an attorney in my office, informed me of the newly created Illinois Tax Tribunal (“Tribunal”) which considers taxpayers’ disputes with the Illinois Department of Revenue (“Department”).

As Tim described the process to me (I took a big sip of my coffee to stay awake) I came to understand that small businesses finally have a fighting chance in contesting tax disputes with the Tribunal.  The Tribunal has jurisdiction over certain decisions rendered by the Department, including Notices of Tax Liability, Notices of Deficiency and Notices of Claim Denial that involve tax liabilities that exceed $15,000.

I became more intrigued (and more awake) as he told me that the Department had assessed a bar restaurant $49,000 pursuant to a sales tax audit, and the two owners were assessed the 100% penalty in the amount of $49,000.  After filing a petition with the Tribunal, Tim was able to settle the case on behalf of the business and the owners for $16,400.00.

This is good news for Illinois taxpayers, in particular Illinois businesses, which before the Tribunalwere limited to seeking recourse with the Department’s administrative system, which is widely perceived as biased in favor of the Department. The Tribunal is a wholly independent body, which is intended to provide a truly independent process to consider tax disputes with the Department. Taxpayers can petition the Tribunal without prior payment of the disputed liability, which was required under the Department’s administrative system.

What a concept.  A business owner is innocent until proven guilty when dealing with a taxing body.

If a statutory notice becomes final without a timely petition being filed, the taxpayer may request that the Department grant a discretionary late hearing, which if granted, the taxpayer shall be granted 60 days to file a petition with the Tribunal.

Really?  You are still awake?