Illinois Department of Revenue
 
 
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The Collection Process

 
 

First bill

If you do not pay the full amount of tax due when you file your return, we will send you a bill. If you make an error, we will correct it and send you a notice showing our proposed changes and any amount due. If you owe past-due tax, we will charge you penalty and interest.

The first bill we send you will contain a detailed breakdown of the tax, penalty, and interest you owe, an explanation of why you owe this amount, and an explanation of your rights and obligations during the collection process. If you do not pay the full amount due by the date in the notice, we will continue collection activity. If you need further explanation, do not understand any part of the bill, or you believe that we have made an error, call us at the telephone number on your bill.

Statute of Limitations

No statute of limitations exists for assessing a liability in cases of fraud or failure to file returns (except for a non-filed use tax return, which has a six-year statute of limitations). Once a liability has been deemed assessed or finalized, the statute of limitations to use enforcement collection action varies from 2 years to 20 years or longer depending on when one or more of the following actions occurred:

  • A lien was filed against your property.
  • A judgment was entered by the Attorney General.
  • Personal penalty assessments were issued against any responsible persons involved during incurrence of business debt.
  • Certain other enforcement actions were used.

Collection Action We May Take

If we have notified you of unpaid past-due tax or returns that have not been filed, we are authorized by law to attempt to collect the debt. If necessary, we may place a lien on your property, seize personal property (such as an automobile or business assets), levy against your property (by garnishing wages or levying against your bank accounts), stop the issuance or renewal of a business license, and use collection agencies or other collection methods.

Liens
We may file a lien or take other action to collect a past-due tax debt. Filing a lien will have a negative impact on your credit rating. If we file a lien on your real estate or personal property, in most cases you cannot sell or transfer your property until you pay your past-due amount. You will also be responsible for paying any applicable filing and release fees associated with the lien before the department will release the lien. This lien is enforceable for 20 years. If we issue a lien in error, we will issue a release.

Seizure
We have the authority to seize your real estate and personal property (such as automobiles and business assets) in order to collect past due tax, penalty, and interest. However, we will notify you of the amount you owe at least 10 days before we seize your property. Most seized property cannot be sold for at least 20 days (perishable items may be sold within 24 hours).

Levies
We have the authority to levy against your wages and your assets.

Wages
We may levy against your wages, salaries, bonuses, and commissions. Your employer must deduct up to 15 percent of the gross amount to pay your past due tax. We will notify you of the amount you owe at least 10 days before we send a wage levy to your employer. A wage levy can remain effective until your tax liability is paid. We will send your employer instructions that outline the responsibility to send funds from your paycheck to us. Your employer must continue to withhold the additional amount until we release the levy.

Assets
We may levy against your bank accounts, requiring the bank to hold for 20 days all monies in your account up to the total past due tax, penalty, and interest. After 20 days, the bank will forward these monies to us. This type of levy can also apply to other assets, including certificates of deposit, interest or dividends from an insurance policy, contractual payments, interest on bonds, and rental money due to you. We will notify you of the amount you owe at least 10 days before we send a levy.

Revoke, suspend, or hold your business certificate or professional license If you owe past due tax and have a business or professional license, we may notify you and the appropriate licensing authority to begin revocation or suspension proceedings or to stop the issuance or renewal of your business or professional license.

Hold you personally responsible for business taxes We have the authority to assess the tax, penalty, and interest owed by a business against its officers or others responsible for filing and paying sales and withholding taxes. If you are found personally liable, you have 60 days from the date of the notice to protest the tax, penalty, and interest assessment.

Revoke your sales tax business certificate
If your business collects sales tax and makes sales tax payments to the Illinois state government, you must have a valid sales tax business certificate. We may request a hearing to revoke your sales tax business certificate if you owe the Illinois state government past due sales tax or have not filed your sales tax returns.

We will notify you that an administrative law judge will hold a revocation hearing and that you may be present to explain your position. If the judge issues an order revoking your business certificate, you must stop making taxable sales in Illinois until we reissue a valid business certificate. If you make retail sales in Illinois after we revoke your business certificate and you have not been issued a new business certificate, you may be charged with a Class A misdemeanor. The department may also revoke your sales tax business certificate if the department finds you have knowingly sold contraband cigarettes.

If your certificate is revoked, the department may post a revocation notice at your business location that indicates that your certificate is revoked and your business may be operating illegally.

Liquor license revocation or non-renewal

If you are a liquor retailer and are past due in filing or paying your state sales or other business taxes, we will refer your account to the Illinois Liquor Control Commission. Your liquor license may be revoked or not renewed if your taxes and assessments are not paid in full. Once you have paid the past due tax and filed any past due returns, we will recommend that your license be reinstated or renewed. Wholesalers, manufacturers, or brewers cannot legally sell or deliver any product to liquor retailers who do not have a valid liquor license.

Refer your account to a collection agency
We contract with collection agencies to help us collect the amount of tax, penalty, and interest that you owe. If we send your account to one of these agencies, you will become responsible for collection agency fees in addition to the tax, penalty, and interest that you already owe.

Other actions
  • Corporations who owe past-due taxes may not have their corporate charters renewed.
  • Lottery licenses can be revoked or not renewed for nonpayment of taxes.
  • The Comptroller’s Office may offset any money that the Illinois state government owes you and apply that amount to your delinquent tax liability.
  • We may ask the Internal Revenue Service to pay your federal income tax refund to us.
  • Your name may appear on our delinquent taxpayer list that is published on our web site.
  • We may ask the Secretary of State to not renew your dealer’s license.
  • We may apply your (or your spouse’s) credit or refund to another tax liability.
  • A collector may visit you at your home or business.

 
 
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