TAX DEBT RELIEF OPTIONS – Illinois Department of Revenue

M&M Financial has been successfully resolving personal and business back-tax since 2005.  We deal with the IRS and State taxing authorities, so you do not have to!

Land of Lincoln!  And, land of relatively high tax rates!  If you’re from Illinois, you pay a fair amount of tax.  Chicagoan, like me?  Then, you definitely have a huge tax burden.

If you or your business owes back-tax to the State of Illinois, you need some guidance to get the problem fixed.  Here’s what you need to know.  If you have questions and would like to talk to a licensed Tax Resolution Specialist, call us at 866-487-5624.

HOW TO FIX YOUR ILLINOIS BACK TAX DEBT

Step 1– Determine the type of tax you owe and how much

If your business owes tax to the State of Illinois, it’s important to determine whether it’s to the Illinois Department of Revenue or the Illinois Department of Employment Security.  Each has its own set of rules when it comes to collections. If you owe both, you’ll need to resolve each separately.  

If your or your business owes the Illinois Department of Revenue it could be: 

• Income Tax, 
• Payroll (employment/withholding) Tax, or 
• Sales Tax

Illinois Department of Employment Security tax debts typically stems from businesses that are past due Unemployment or Workers Compensation.  

Step 2 – Be Proactive

We recommend acting as quickly as possible.  State taxing authorities are typically more aggressive than the IRS – 

• shorter deadlines, 
• quicker to attack bank accounts, 
• shorter payment terms, and 
• tougher on penalties.  

Generally, the State of Illinois isn’t willing to release bank levies once they are issued. It’s never a good idea to wait and a see what the State will do next.  Best to take action before they do.

PAYMENT PLANS TO RESOLVE ILLINOIS BACK TAXES

• IL-DOR Installment Contracts (monthly payment plans) are typically set up for 24 months or less using form CPP-1. If you owe below $10,000 in back taxes to the Illinois DOR installment agreements typically can be set up without providing financial information.  However, if your tax liability is greater than $10,000 you will have to submit forms EG-13-B Financial Statement for Businesses and/or EG-13-I Financial Statement for Individuals to be considered for an installment agreement.  The IL-DOR generally allows more time to pay back personal taxes than business taxes.  

• IDES Deferred Payment Agreements (monthly payment plans) typically allow up to 12 months to pay and require a 25% down payment.  In certain rare cases, IDES will grant up to 36 months to pay the tax in full. But you are going to have to jump through lots of hoops and go through a thorough financial investigation before being approved for extended terms. 

Illinois has recently taken a tougher stance on tax liabilities.  Bank account levies are sent quicker and payment plans have been shortened.  

REDUCE YOUR IL-DOR / IDES TAX DEBT

Offer in Compromise

The IL-DOR does have an Offer in Compromise settlement program but the IDES does not.  We typically do not recommend the Offer in Compromised as a resolution strategy for operating businesses that owe Withholding or Sales and Use Tax.  

Penalty Relief

In certain cases the IL-DOR will consider the request for the removal of penalties for reasonable cause.  If your business owes back Illinois Sales Tax, penalty relief is typically not an option.  

Important Tax Tip:   Use form BOA-1 to submit your OIC or Penalty Abatement request to the IL-DOR Board of Appeals.

ILLINOIS TAX RESOLUTION CASE EXAMPLES

The Illinois Department of Revenue and Department of Employment Security have some flexibility when it comes to paying back-tax liabilities.  Each case varies based on factors such as compliance history, type of tax owed and total amount due.  Here are some case examples in your state negotiated by M&M.


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