On August 22, 2012, the Appellate Court of Illinois, First District, issued its decision in Marriott Int'l Inc. v. Hamer, interpreting the meaning of the phrase "all taxes due" as used in Illinois' 2003 Tax Delinquency Amnesty Act. The Court reversed its position recently taken in Metropolitan Life Insurance Co. v. Hamer, 966 N.E.2d 1052 (Ill. App. Ct. 2012), now holding that the taxpayer was subject to a 200 percent interest penalty for its failure to pay additional tax liabilities unknown to the taxpayer at the time of the amnesty period, which ran from October 1, 2003, to November 15, 2003. 

The Appellate Court explained that the "entire tax liability" was due on the date fixed for filing 2000 and 2001 income tax returns, regardless of the taxpayer's knowledge or the Illinois Department of Revenue's issuance of a formal assessment or demand. And because the 2000 and 2001 tax years were within the scope of the Amnesty Act, which covers taxable periods from June 30, 1983, through July 1, 2002, the taxpayer was subject to a 200 percent interest penalty for its failure to comply with the Amnesty Act and pay all taxes due. The Court relied upon the language of the Illinois Income Tax Act and federal cases interpreting similar language in the Internal Revenue Code in reaching its conclusion. 

If you have any questions on this legal update, contact the author or another member of our tax advocacy group. Further information about amnesty programs in other states, including Kentucky, Ohio and Texas, is available here.