Illinois Provides Information Bulletin Regarding New Payment Equals Agreement Statute

The Illinois Department of Revenue has released helpful guidance on legislation already enacted that alters how payments for sales, use, and excise taxes and fees are understood. Starting January 1, 2024, when taxpayers make payments (except quarter-monthly ones), they are agreeing to the amount owed.

From January 1, 2024, if you disagree with a tax assessment, you have two options:

• Protest without Paying: You can file a protest and request a hearing through the Illinois DOR Administrative Hearings or the Illinois Independent Tax Tribunal.
• Pay and Protest: If you choose to pay the assessed amount, you must file a claim for credit or refund. If your claim is denied, you can then protest the denial.

Before this change, making a payment didn’t necessarily mean the taxpayer agreed with the tax assessment. Taxpayers under audit could make payments and still dispute the findings. However, as of January 1, 2024, making a payment means you accept the liability. This also means you waive certain rights:

• You can’t review proposed audit findings with Illinois DOR’s Informal Conference Board if you’ve made a payment resulting from an auditor’s report.
• You can’t protest through Illinois DOR’s Administrative Hearings or the Illinois Independent Tax Tribunal if you’ve made a payment based on an auditor’s report or notice of tax liability. You’ll only get protest rights if your claim for credit or refund is denied.

Unpaid amounts can still be reviewed within the allowed timeframe under Illinois law. This update affects various tax and fee Acts listed in the informational bulletin, particularly Section 4 of the Retailers’ Occupation Tax Act. (Informational Bulletin FY 2024-15, Illinois Department of Revenue, January 2024)