Illinois Administrative Code
Title 86 - REVENUE
Part 150 - USE TAX
Subpart M - CLAIMS TO RECOVER ERRONEOUSLY PAID TAX
Section 150.1405 - Disposition of Credit Memoranda by Holders Thereof
Universal Citation: 86 IL Admin Code ยง 150.1405
Current through Register Vol. 48, No. 12, March 22, 2024
a) Assignment Of Credit Memoranda
1) Credit memoranda issued hereunder may be
assigned or transferred only after a request for that purpose is filed with the
Department upon forms prescribed and furnished by it, and subject to the
following conditions:
A) that the assignment
is made to a person who is subject to the Use Tax Act, or to the Retailers'
Occupation Tax Act, or to the Service Occupation Tax Act, or to the Service Use
Tax Act;
B) that there is no
proceeding pending to establish an unpaid liability against the assignor
pursuant to notice given of the Department's proposal to assess an amount
against him either under the Use Tax Act, the Retailers' Occupation Tax Act,
the Service Occupation Tax Act, or the Service Use Tax Act or under a local
Retailers' Occupation Tax or Service Occupation Tax administered by the
Department and
C) that there is no
established assessment or admitted tax liability or interest or penalty unpaid
by the assignor, either under the Retailers' Occupation Tax Act, the Use Tax
Act, the Service Occupation Tax Act, the Service Use Tax Act, or under a local
Retailers' Occupation Tax or Service Occupation Tax administered by the
Department: Provided, that if the amount of the credit memorandum must first be
applied, in whole or in part, against an established unpaid assessment which
has been issued to the claimant-assignor, or in total or partial liquidation of
an unpaid admitted tax liability, or unpaid penalty, or unpaid interest, of the
claimant-assignor, notice to this effect shall be given the claimant-assignor
by the Department.
2) If
any balance is due such claimant-assignor, after application of the credit
memorandum in the manner and to the purposes aforesaid, such balance may be
assigned upon receipt by the Department of instructions to that
effect.
3) If there are no unpaid
established assessments or unpaid admitted tax liabilities, or unpaid
penalties, or unpaid amounts of interest due from the claimant-assignor, and if
there are no pending proceedings as herein outlined against the
claimant-assignor, and if the contemplated assignee is a person who is subject
to the Use Tax Act, or the Retailers' Occupation Tax Act, or the Service
Occupation Tax Act, or the Service Use Tax Act, the request for leave to assign
shall be approved.
4) The original
credit memorandum shall be canceled, and a new credit memorandum shall be
issued to the assignee in the amount shown on the canceled
memorandum.
5) However, before a
credit memorandum is issued to the assignee, the amount of such credit shall be
applied, to the extent that may be necessary, in liquidation of any established
or admitted unpaid liability due from the assignee under the Use Tax Act,
Retailers' Occupation Tax Act, Service Occupation Tax Act, Service Use Tax Act,
or under a local Retailers' Occupation Tax or Service Occupation Tax
administered by the Department, and a credit memorandum for the balance of the
credit, if any, shall then be issued to the assignee: Provided that there is no
proceeding pending against the assignee to establish an unpaid liability
against him under any of said Acts.
6) If a proceeding to establish such an
unpaid liability is pending, the credit memorandum shall be held by the
Department until such proceeding is concluded; and if such proceeding results
in the issuance of an assessment which becomes final under the Act, the credit
shall be applied by the Department, to the extent which may be necessary, in
liquidation of such assessment, and any interest that may accrue thereon, and
the balance of the credit, if any (after cancellation of the credit memorandum
applied in liquidation of such liability), shall be issued in the form of a new
credit memorandum and delivered to the assignor for transmittal to the
assignee.
b) Submission of Credit Memoranda With Tax Returns
1) Credit
memoranda, in the hands either of the original claimant or of his assignee, may
be submitted to the Department, along with Use Tax returns, in payment of any
tax liability or penalty or interest due under the Use Tax Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act, the Service Use Tax Act, or
under a local Retailers' Occupation Tax or Service Occupation Tax administered
by the Department, incurred by the holder of such credit memoranda.
2) If, after applying any such credit
memorandum against the amount of liability shown to be due by the tax return
with which the credit memorandum is submitted, there is a balance of the credit
memorandum in favor of the taxpayer, the Department will cancel the credit
memorandum which the taxpayer submits with his return and will issue and
deliver to such taxpayer a new credit memorandum for such balance. This process
will be followed until the credit, to which such taxpayer is entitled, is
exhausted.
3) However, any new
credit memorandum, which is issued for a balance of credit due the taxpayer
after applying the amount of a credit memorandum to the payment of current
taxes, is subject to the prior rights of the Department to the same extent that
such prior rights take precedence when a credit memorandum is first issued (see
subsection (a) of this Section) or when leave to assign a credit memorandum is
requested (see Section
150.1405(a)
of this Part).
c) Verified Credits and Offsets
If a taxpayer is entitled to a verified credit due to overpayment of taxes, the taxpayer may file a claim for credit as described above, in which case interest would be paid upon the amount of credit approved, or the taxpayer may elect to apply the verified credit balance directly to any outstanding liabilities or current payments due. The Department may also apply verified credit amounts to unpaid liabilities, penalties, account balances, if any, of the taxes administered by the Department.
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