Uniform Penalties and Interest

              PUB-103 (R-11/03)
Uniform Penalties and Interest
Page 1 of 11
Illinois Department of Revenue
Publication 103
Purpose:
To explain the uniform penalties
and interest assessed by the
Illinois Department of Revenue
Objectives:
To explain “processable” return
To identify and explain each
penalty, how it is calculated, and
at what rate it is assessed
To explain how the interest rate is
determined
To explain how interest is
assessed
Uniform Penalties and Interest
General information
On January 1, 1994, Illinois adopted
the Uniform Penalty and Interest Act
(UPIA), which contains uniform
provisions for assessing penalties and
interest. Unless otherwise specified in
another tax act, the UPIA applies to
all taxes we administer that are due
on or after January 1, 1994, except for
the taxes imposed by the following
statutes:
Racing Privilege Tax Act
Property Tax Code
Real Estate Transfer Tax Act
Coin-Operated Amusement
Device and Redemption Machine
Tax Act
Motor Fuel Tax Law (See Note.)
The Motor Fuel Tax Law
contains its own late-filing, late-payment,
and interest provisions
applicable to Motor Fuel Use Tax.
However, other penalties under UPIA
may apply. See 35 ILCS 505/13a.3 for
more information.
Before January 1, 1994, uniform
penalty or interest provisions for the
taxes that we administer did not exist;
each tax act had its own penalty and
interest provisions and rates. For
information about penalties and
interest imposed before January 1,
1994, see the various tax acts located
in the Illinois Compiled Statutes.
What is amnesty and how
does it affect penalties and
interest?
The Illinois Tax Delinquency Amnesty
Act provided an opportunity for
taxpayers who failed to file tax returns
or underreported taxes for tax periods
ending after June 30, 1983, and before
July 1, 2002, to pay those old liabilities
without penalty or interest. If you paid,
in full, any tax liability that qualified for
amnesty, between October 1, 2003, and
November 17, 2003, all penalties and
interest imposed were automatically
forgiven. However, if a liability qualified
for amnesty remains unpaid after
November 17, 2003, penalty and
interest are charged at double the
normal rate. The doubled rates apply to
any penalties and interest that were
assessed before the amnesty period, as
well as to amounts assessed after the
amnesty period.
For more information, see FY Bulletin
2004-11, Tax Delinquency Amnesty Act.
What is a “processable”
return?
A “processable” return is one that
has been signed by the person
authorized by law to sign it,
is in a format we have prescribed or
approved, and
contains all information, schedules,
and supporting documents
necessary to determine the correct
tax due and make allocations.
What are the different
penalties?
We assess the following penalties:
Late-filing or nonfiling penalty
Late-payment penalty
Underreporting penalty
Failure to file correct information
returns penalty
Negligence penalty
Fraud penalty
Personal liability penalty
Bad check penalty
Cost of collection fee
Frivolous return penalty
When does each penalty
apply?
Late-filing or nonfiling penalty
You owe this penalty if
you do not file a return by the due
date, including any extended due
date; or
you file a return that is not
processable and you do not correct
it within 30 days of the date we
notify you.
Late-payment penalty
Estimated or quarter-monthly tax
payments
You owe this penalty if you are required
to make either estimated or quarter-monthly
tax payments and do not do so,
or do not pay the required amount by
the payment due date.
Regular tax payments
You owe this penalty if you do not pay
the tax you owe by the original due date
of the return, even if you have an
extension of time to file. If you file an
amended return before the original due
date (including any extension allowed
under the specific tax act), this penalty
will be adjusted based on the newly
reported tax.
Late-payment or non-payment of
additional liability
You owe this penalty if you do not pay
the full amount of tax required to be
shown due on a return (and that is not
shown) within 30 days of the date we
send you a notice of arithmetic error, a
notice and demand, or a final
assessment.
If we send you a final assessment
because you filed a protest and a
hearing was held, the 30-day
period begins after
all proceedings in court to review
the final assessment have ended;
or
the period for obtaining a court
review of the final assessment
has ended and the review
proceedings were never instituted.
If we send you a notice of tax
liability that becomes a final