Illinois Taxing Information
The state has the authority to seize your real estate and personal property in order to collect past due tax, penalty, and interest. The state will notify you of the amount you owe at least 10 days before seizing property. Seized property is sold at auction. If you have had a assets seized, or have been asked for a list of assets, get professional advice immediately.
The state can take money out of your bank accounts, up to the amount of money owed to them. This is called a bank levy. Banks are required by law to comply with a bank levy if the money is there. There is, however, a holding period during which time you can get professional assistance so that you can get your money back and/or prevent further collections. Also, the state of Illinois may ask the Internal Revenue Service to refund your federal income tax refund to the state. If you have had a bank levy, or anticipate that one is likely, get professional advice immediately.
Priority One: Stopping Aggressive Enforced Collections
The state of Illinois may outsource the collection of delinquent taxes to a debt collection company. If you are contacted by a collection company, claiming that you owe taxes, verify their identity prior to divulging any personal information such as social security numbers, bank accounts, or tax id numbers. If the state sends 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.
If you owe the state of Illinois taxes or have unfiled returns, the state may place a lien on your property or even seize personal and business assets, levy bank accounts, or garnish your wages. Depending upon the nature of your business if any, they can stop the issuance or renewal of a business license, and use collection agencies or other collection methods. Also, your name may appear on the delinquent taxpayer list, published on the Illinois Revenue department's web site.
Offer in Compromise
Illinois may accept a taxpayer's offer to settle their tax liability for less than the full amount due, through the Offer in Compromise program. Unlike with the IRS, the state of Illinois' sole criteria in compromising a tax liability is the uncertainty as to collectibility of the debt.
The Offer in Compromise is great program for those who cannot afford to pay what the government claims is owed, but it is also a very difficult package to properly prepare. The state will reject any offer in compromise where it is determined that the taxpayer's offer does not maximize the collection of the debt for the state, by analyzing 27 different criteria. According to Illinois Revenue department's most recent data, the they rejected over two-thirds of offers that were submitted. Seek professional advice before attempting an Offer in Compromise.
Personal Assessment for Business Taxes
If you are a corporate officer, or deemed one, you may be held responsible and personally liable for the unpaid taxes, interest, and penalties. Also, corporations that owe taxes may have their corporate charters denied for renewal.
Power of Attorney with Illinois
You may have a qualified professional represent you before the state of Illinois. This requires that you have a Power of Attorney form completed and signed before any tax matter can be discussed with your representative. The state of Illinois accepts the IL-2848 Power of Attorney form for this purpose.
Sales Tax Permit
If your business collects sales tax and makes sales tax payments to the DOT, you must have a valid sales tax permit. If you are delinquent in your tax obligations your sales permit may be suspended or revoked.
When the state of Illinois files a lien against a taxpayer who is behind in taxes, it is the first step in aggressive collection actions. A lien will have a negative impact on your credit rating, encumber the sale or transfer of assets, and allows the state to seize assets or levy bank accounts. A lien is enforceable for 20 years. Once paid, or if a lien is filed in error, the state will issue a release of lien.
Your employer is legally obligated to comply with a garnishment request, and deduct up to 15 percent of your gross wages. A wage garnishment can remain effective until your back-tax liability is paid. If your wages are being garnished, or you have been warned that a garnishment is possible, get professional advice immediately.
When a return or payment is missed
When a payment is missed, the state will send you a bill, including penalties and interest if applicable. This first bill will contain a detailed breakdown of the tax, penalty, and interest owed, why the tax is owed, and an explanation of your rights and obligations during the collection process. If you do not or cannot pay the full amount due in the bill, the state will begin enforced collection activity.