Illinois has long been criticized for its tax appeal procedures.  A recent scorecard issued by the Council on State Taxation (COST) gave Illinois a grade of “D” and ranked us as one of the 10 worst states when it comes to fair and efficient tax administration.  

 

Under current law, a taxpayer facing an assessed tax liability must choose between a Department of Revenue administrative hearing to contest the matter, or the taxpayer must pay the full amount of tax, penalty and interest assessed by the Department of Revenue in order to go directly to circuit court to get an independent review of the assessment.   

 

The perception that the deck is stacked against the taxpayer at a Department hearing is high since the hearing is held at the Department of Revenue, by employees of the Department of Revenue.   Illinois law also allows the Director of Revenue to overrule his own administrative law judge if he disagrees with the judge’s opinion.  

 

Under this standard, according to the Department’s own statistics, the Department is upheld by the circuit court 75% of the time.  Conversely, taxpayers who are able to pay the full amount of tax, penalty and interest upfront and go directly to circuit court to get an independent hearing on the Department’s assessment win their case 75% of the time.   

 

An independent Tax Tribunal is less likely to be perceived as driven by concerns over revenue collection, upholding departmental policies, or offending departmental decision-makers.  HB 5192, as amended, will create an executive branch tax tribunal that is independent of the Department of Revenue and staffed with knowledgeable administrative law judges who will apply well-established rules of evidence.  

 

Once the Tax Tribunal is established, taxpayers will not have to pay the assessed tax, penalty or interest, until and unless the Administrative Law Judge of the Tax Tribunal agrees with the Department’s assessment and all appeals by the taxpayer have been exhausted.  

 

Tell Your Legislator Now is the Time for Tax Fairness in Illinois!