The Illinois Department of Revenue (IDOR) encourages businesses and individuals who are not in compliance with Illinois tax laws to voluntarily come forward and file an application in our voluntary disclosure program (VDP). For the statute of limitations to be limited to no more than four years under Illinois law, a taxpayer must voluntarily come forward and disclose its liability to the Board of Appeals. After an application has been submitted, IDOR will review and if approved, return an executed application to the taxpayer.
Benefits of Voluntary Disclosure:
- Limits the look-back period to four years.
- Elimination of all penalties associated with the voluntary disclosure liability upon payment of all tax and interest (within 60 days of billing).
- Limits any possible audit period to the approved four-year disclosure period.
- To apply the taxpayer or representative must complete
Form BOA-2, Application for Voluntary Disclosure, and return it to the Problems Resolution Division.
The taxpayer will need to register with IDOR via
MyTax Illinois or send in a completed Form REG-1, Illinois Business Registration Application, with the Form BOA-2 application.
- If the taxpayer intends to be represented by another person or firm during the VDP process, the taxpayer will also need to supply a completed Form IL-2848, Power of Attorney, with the Form BOA-2.
- Once the application has been reviewed, IDOR will inform the taxpayer or Power of Attorney of the decision.
- The approved Form BOA-2 will be sent to the taxpayer, along with a letter informing the taxpayer to file tax returns and pay the tax liability. The taxpayer must supply the completed returns and payment within 30 days of the application approval notification. An extension of 60 days may be granted, provided a written request is submitted within the initial 30-day period.
- Once the returns have been processed, IDOR will notify the taxpayer or Power of Attorney of the interest and any remaining tax due for the voluntary disclosure period. If all the tax and interest is paid within 60 days from the date notified, then the penalties associated with the disclosure will be waived without the necessity of filing any additional Board of Appeals petitions.
Common reasons for disqualification include, but are not limited to:
- IDOR has initiated an audit or an investigation on the taxpayer prior to receiving Form BOA-2.
Tax returns are not filed within 30 days of being notified of an approved application, unless a 60-day extension has been granted.
- Tax is not paid within 30 days of being informed of an approved application, unless a 60-day extension has been granted.
- Interest and remaining tax is not paid within 60 days of the Notice of Assessment.
- The taxpayer does not maintain compliance with Illinois tax laws. Compliance occurs when a taxpayer makes a good-faith effort to comply with Illinois tax laws, including, but not limited to:
- filing all returns that are due,
- collecting and remitting the tax liability owed, and
- registering with IDOR.
- The taxpayer has not remitted all taxes collected for the Illinois tax type being disclosed as part of the application for voluntary disclosure. A taxpayer must remit all taxes (and interest) collected for all periods being disclosed. This includes periods beyond the four-year limitation for which the taxes were collected but not remitted. Failure to remit all taxes (and interest) previously collected for the Illinois tax type being disclosed will disqualify the taxpayer from the relief provided under the voluntary disclosure program.
- File Form BOA-2, register with IDOR, and send an executed Form IL-2848, if needed.
- File all returns and send payment for all tax liabilities within 30 days of the approved application.
- Pay calculated interest and any remaining tax due within 60 days of being billed by IDOR.
- Continue to collect and remit tax and file returns after the end of the disclosure period or until the taxpayer no longer has Illinois activity. In other words, the taxpayer must stay in compliance with Illinois tax laws.
- IDOR has the right to audit taxpayer for all periods included in the application. See
86 Ill. Adm. Code 210.126(e).
- IDOR has the right to cancel the application if the applicant or Power of Attorney provided any false information in the application, in which case, the taxpayer could be subject to audit for all periods that IDOR deems appropriate.
- IDOR has the right to cancel the application if the applicant or Power of Attorney fails to comply with terms of the voluntary disclosure program.
Contact us at:PROBLEMS RESOLUTION DIVISION - VDP
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19014
SPRINGFIELD IL 62794-9014
Phone: (217) 785-7313