Current through Register Vol. 48, No. 38, September 20, 2024
a) In
addition to any other penalty provided by the IITA, there is imposed a penalty
of $500 upon any individual who files a purported return that does not contain
information from which the substantial correctness of the stated tax liability
can be determined or contains information indicating that the stated tax
liability is substantially incorrect and such conduct is due to a desire to
delay or impede the administration of the IITA or is due to a position that is
frivolous. (IITA Section 1006)
b)
The penalty imposed by IITA Section 1006 applies only to individual return
filers. It does not apply to an individual acting as a return preparer for
another taxpayer or to an individual filing or signing a return of any taxpayer
other than that individual.
c) The
penalty imposed by IITA Section 1006 applies to purported returns. Accordingly,
the penalty may be imposed even though the filing is not a processable return
within the meaning of UPIA Section 3-2(d), is not filed on the form prescribed
by the Department under IITA Section 1401(a), or is insufficient to avoid
imposition of the penalty for failure to file a return under IITA Section
1001.
d) A purported return does
not contain information from which the substantial correctness of the stated
tax liability can be determined if it does not contain or is not verified by a
signed, written declaration that it is made under penalties of perjury, as
required by IITA Section 504, and such purported return is due to a desire to
delay or impede the administration of the IITA and is therefore subject to
penalty if:
1) the declaration on the form
prescribed by the Department is altered or qualified in any way, or the filing
is not made on the form prescribed by the Department and its verification is
not identical to the verification contained in the form prescribed by the
Department; or
2) it indicates on
its face in any manner that the filer has intentionally failed to sign the
verification. For example, a statement on or attached to a form, saying that
the filer has not signed the verification because signing the verification
would violate his or her rights under the United States Constitution or the
Constitution of the State of Illinois against self-incrimination, against
unreasonable searches and seizures or to due process, or because signing the
verification would constitute perjury or would violate religious principles of
the filer, would cause the filing to be frivolous and subject to
penalty.
e) A purported
return contains information indicating that the stated tax liability is
incorrect due to a frivolous position if it contains an assertion that no
federal or Illinois income tax liability is due because of one or more of the
following positions, or because of a position substantially similar to any of
the following:
1) an income tax is prohibited
or not allowed by the United States Constitution or the Illinois
Constitution;
2) individuals in
general are not subject to income taxation by the United States or this
State;
3) no provision of the
Internal Revenue Code or of the IITA requires filing of a return or payment of
tax by individuals having net income;
4) filing of income tax returns or payment of
income taxes is voluntary;
5)
income taxes are or may be imposed only on certain business activities or the
exercise of a privilege (other than the privilege of earning or receiving
income in or as a resident of Illinois), and the filer has not engaged in any
such business or privileged activity;
6) wages, salary and other forms of
compensation for personal services are not income or otherwise are not subject
to income tax;
7) only government
employees, nonresident aliens, citizens or residents of the District of
Columbia or other federal areas, or persons other than residents or citizens of
the United States are or may be made subject to an income tax imposed by the
United States or this State;
8)
income tax may be imposed only by contractual arrangement or under a
contractual or other consensual relationship between the filer and either the
United States or this State;
9)
regulations necessary to implement the Internal Revenue Code or the IITA in
general, or to implement the provisions in those statutes requiring filing of
returns or payment of taxes, have not been promulgated;
10) the filer has not received a specific
notice of his or her obligation to maintain records, file returns or pay
taxes;
11) the filer has not
received income from any source of income expressly identified in the Internal
Revenue Code or the IITA as being from United States sources or subject to
income tax;
12) the filer has no
income because the federal reserve notes, checks or other medium in which the
filer is paid do not constitute "money", "currency" or any other taxable
medium;
13) the filer has no
liability or no obligation to file a return because no liability has been
properly assessed;
14) payments
received in federal reserve notes or obligations of the federal government are
exempt from State income taxation;
15) a pure trust, contractual trust or
statutory trust has no return filing or tax payment obligations; or
16) any position that the United States
Supreme Court or a federal circuit court of appeals has held to be frivolous
for purposes of imposing a frivolous return penalty under IRC Section
6702.
f) The penalty
imposed under IITA Section 1006 shall be paid upon notice and demand and shall
be assessed, collected and paid in the same manner as the Illinois income
tax.
