The state of Illinois has enacted a new tax amnesty that takes effect between October 1, 2010, and November 8, 2010. The amnesty applies to any tax enforced by the Illinois Department of Revenue (e.g., income tax, sales tax, etc.), with the exception of motor fuel tax.

By paying all of the tax owed (for past periods) during the amnesty period, all penalty and interest would be abated. It also stops the Department of Revenue from seeking any other civil or criminal sanctions against the taxpayer for the period the amnesty is granted. The amnesty is not limited to unknown taxpayers; rather taxpayers who can take advantage of the amnesty include those who have been audited and assessed tax by the Department of Revenue, as long as they are not currently litigating the tax matter in state court or are under criminal investigation.

Failure to take advantage of the amnesty will result in the doubling of interest and penalty due. As a result, taxpayers who may have back-tax liabilities and who can take advantage of the amnesty may want to seriously consider doing so.