Move Is In Line With Nationwide Trend and ABA Recommendation

Illinois Governor Pat Quinn (D) signed House Bill 5192 into law on August 28th, which provided for the establishment of an independent tax tribunal to begin handling taxpayer’s disputes with state tax authorities on July 1, 2013. The independent tax tribunal will have jurisdiction over certain decisions of the Illinois Department of Revenue, including Notices of Tax Liability, Notices of Deficiency, Notices of Claim Denial, and Notices of Penalty Liability in which the amount at issue exceeds $15,000, exclusive of penalties and interest. Importantly, appeals to the tax tribunal can be made without prior payment of the disputed liability. Taxpayer confidentiality will be protected because tribunal proceedings have been excluded from the definition of “public body”  for purposes of the Open Meetings Act. Because of this exception, certain confidential material used in tax tribunal proceedings will not be subject to inspection and copying under the Freedom of Information Act. The tax tribunal will be staffed by administrative law judges selected by the Governor, with advice and consent from the Senate.

The new tribunal will replace a system that currently handles tax disputes through administrative hearings followed by appeal to the circuit courts. Independent tax tribunals generally are recommended by the American Bar Association’s Taxation Section and the Council on State Taxation. Establishment of an independent tax tribunal by the State of Illinois is a positive development that is consistent with a nationwide trend in state and local tax administration and should provide taxpayers with an independent forum for the adjudication of tax disputes in which the judges possess tax expertise.

If Illinois sends you any of the Notices mentioned above, or you receive any tax-related notices of any kind, discuss your rights immediately with a tax professional. Dykema’s Taxation Practice Group members are available to assist taxpayers in a broad array of tax matters, including navigating federal and state tax controversies in Illinois.