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Qualified Practitioners and Certified Audits under the Local Government Revenue Recapture Act

In General

Effective January 1, 2021, when the Illinois Department of Revenue (IDOR) has notified a taxpayer that it has received a tax compliance referral from a municipality, county, or third party under the Local Government Revenue Recapture Act the taxpayer can choose to contract at its own expense with a qualified practitioner to perform a certified audit on the taxpayer's Retailers' Occupation Tax and Use Tax compliance. The scope of the qualified practitioner's tax compliance review may include only the following:

  • whether the taxpayer is reporting receipts in the proper jurisdiction;
  • whether asset purchases by the taxpayer were taxed properly;
  • whether sales reported as exempt from tax were properly reported and documented;
  • whether the proper tax rate was charged;
  • whether the tax was properly reported as Retailers' Occupation Tax or Use Tax; and
  • any other factor that impacts the Department's allocation of sales and use tax revenues to the jurisdiction in which the taxpayer reports sales or use tax.

As an incentive for taxpayers to incur the costs of a certified audit, other than in instances when a tax liability was collected by a taxpayer but not remitted to IDOR and in instances of fraud, IDOR shall abate penalties due on any tax liabilities revealed by a certified audit performed by a qualified practitioner.

Qualified Practitioner Certification

The Local Government Revenue Recapture Act governs who may register to become a qualified practitioner. Any certified public accountant (CPA) who is licensed or registered to perform accountancy activities in Illinois under Section 8.05 of the Illinois Public Accounting Act (225 ILCS 450/8.05) may be certified with IDOR to become a qualified practitioner. Upon completion of the local government revenue recapture certified audit training course, IDOR will notify the qualified practitioner whether he or she has met all requirements of the training course and achieved the required score on the certification test as approved by IDOR.

Applicants who meet the requirements will receive a certificate stating they are qualified to perform certified audits. All certificates expire on December 31, 2025, to coincide with the end of the initial five-year year project. Should the project be extended, DOR will establish procedures for qualified practitioner recertifications.


Since the qualified practitioner certification requires the practitioner to be licensed or registered as a CPA, a practitioner's certification will be revoked if the practitioner is no longer licensed or registered as a CPA.

Note: The Local Government Revenue Recapture Act prohibits any "third party," as defined in 50 ILCS 355/5-5, from becoming a qualified practitioner. This prohibition also includes any employee, contractual employee, officer, manager, or director of a third party, any person or persons owning in the aggregate more than 5% of such third party, or any person who is a family member of any person who is employed by or is an appointed or elected member of any corporate authorities, as defined in the Illinois Municipal Code.

Applicants interested in registering to become qualified practitioners must contact IDOR's audit bureau at

Qualified Practitioner Training Course and Examination

To be registered as a qualified practitioner, applicants must

  • register to participate in the program by completing the registration application on,
  • pay the $2,500 participation fee,
  • complete a self-study review and the five-day, IDOR -provided instructional course that covers the basics of sales tax laws and audit procedures, and
  • pass the qualified practitioner examination with a score of 75% or higher.

Training Course Topics

  • Intro & Overview
  • Sales Tax and the ST-1
  • Certified Audit Process
  • Statutes & Waivers
  • Establishing Control
  • Testing Methods
  • Recording Exceptions
  • Documenting Audit Findings
  • Finalizing the Audit
  • Auditing Retail Sales
  • Auditing Service Sales
  • Sales Reconciliations
  • Tax Reconciliations
  • Tax Jurisdictions & Nexus
  •  Verifying ROT Exemptions
  •  Researching Audit Issues
  •  Auditing Use Tax
  • Verifying Use Tax Exemptions

Applicants who complete the course and pass the examination will receive CPE credits.

Training Course Dates
IDOR has not yet established dates for the next course.  Once the dates are identified, we will notify all applicants with an approved registration application.

Responsibilities of Qualified Practitioner

A qualified practitioner is responsible for the following:

  • planning a certified audit when performing work that involves determining the objectives, scope, and methodology of the certified audit, when establishing criteria to evaluate matters subject to the review as part of the certified audit, when gathering information used in planning the certified audit, or when coordinating the certified audit with the Department;
  • directing a certified audit when the work involves supervising the efforts or reviewing the work of others to determine whether it is properly accomplished and complete;
  • conducting a certified audit when performing tests and procedures or field audit work necessary to accomplish the audit objectives in accordance with applicable professional standards;
  • reporting on a participating taxpayer's tax compliance in a certified audit when determining report contents and substance or reviewing reports for technical content and substance prior to issuance; and
  • answering questions by IDOR review staff, answering questions raised by the Informal Conference Board, and testifying in any administrative or court proceeding regarding the audit or report.

The certified audit must not be a contingent-fee engagement and must be completed in accordance with the Local Government Revenue Recapture Act.

Notification of Certified Audit

A qualified practitioner hired by a taxpayer who elects to perform a certified audit shall notify IDOR to confirm that the taxpayer is not already under audit and to establish the basic nature of the taxpayer's business and the taxpayer's potential exposure to Illinois retailers' occupation and use tax laws. The notification shall identify the taxpayer and the specific occupation and use taxes and reporting periods proposed to be covered by the engagement for the certified audit. IDOR shall not authorize an engagement for a qualified practitioner to perform a certified audit under the Local Government Revenue Recapture Act unless the taxpayer has received from IDOR notification that it has received an actionable audit referral on the taxpayer.

A taxpayer that has received notice of an audit referral from IDOR but has not been issued a written notice of intent to conduct an audit shall be a participating taxpayer under the Act. IDOR shall notify the qualified practitioner in writing within 10 days after receipt of the engagement notice. Note that IDOR may exclude a taxpayer from a certified audit or may limit the taxes or periods subject to the certified audit on the following bases:

  • IDOR has previously conducted an audit.
  • IDOR is in the process of conducting an investigation or other examination of the taxpayer's records.
  • The taxpayer has already been referred to IDOR under the Act and IDOR determined that an audit referral is not actionable.
  • IDOR or a qualified practitioner has previously conducted an audit under the Act.
  • IDOR determines just cause exists for such exclusion.

The qualified practitioner must contact IDOR within 30 days after receipt of the notice of qualification and submit a proposed audit plan and procedures for IDOR's review and agreement. For reasonable cause, IDOR may extend the time for submission of the plan and procedures. The qualified practitioner also may request amendment or modification of the plan and procedures if the qualified practitioner's inspection reveals that the taxpayer's circumstances or exposure to the revenue laws is substantially different from those described in the engagement notice.

Performance of Certified Audit by Qualified Practitioner

The qualified practitioner must perform the certified audit following IDOR's procedures and upon its completion timely submit a report to IDOR affirming its completion.

IDOR shall review the report of the certified audit and shall accept it when it is determined to be complete. IDOR shall then issue a notice of proposed assessment reflecting the determination of any additional liability reflected in the report and shall provide the taxpayer with all the normal payment, protest, and appeal rights with respect to the liability, including the right to a review by the Informal Conference Board. In cases in which the report indicates an overpayment has been made, the taxpayer must submit a properly executed claim for credit or refund to IDOR. The Local Government Revenue Recapture Act provides that a certified audit report is a final and conclusive determination with respect to the tax and period covered. Absent a showing of fraud or material misrepresentation, IDOR shall not make any additional assessment for the specific taxes and reporting periods referenced in the report. This determination does not prevent IDOR from collecting liabilities not covered by the report or from conducting an audit or investigation and making an assessment for additional tax, penalty, or interest for any tax or reporting period not covered by the report.