Illinois Administrative Code
Title 86 - REVENUE
Part 700 - UNIFORM PENALTY AND INTEREST ACT
Subpart B - INTEREST
Section 700.230 - Interest Paid Taxpayers on Overpayments (UPIA Section 3-2)
Current through Register Vol. 48, No. 12, March 22, 2024
a) No interest shall be paid upon any overpayment of tax if the overpayment is refunded or a credit approved within 90 days after the last date prescribed for filing the original return, or within 90 days of the receipt of the processable return, or within 90 days after the date of overpayment, whichever is latest, as determined without regard to processing time by the Comptroller or without regard to the date on which the credit is applied to the taxpayer's account. (UPIA Section 3-2(d))
b) For purposes of this Section, UPIA Section 3-2(d) provides that the date of overpayment shall mean the date tax was paid, the original due date of the return or the date a processable return was received, whichever is later.
c) For purposes of calculating interest on overpayments of tax, a processable return is a return that;
d) Any unprocessable return that is not corrected and made processable within the time period identified on the Department's notice will be considered a nonfiled return, subject to any and all applicable penalties. Being considered a nonfiler for any given period will also result in an extended or open time period for issuance of a Notice of Deficiency or Notice of Tax Liability.
e) For the purpose of computing interest, a return shall be deemed processable unless the Department notifies the taxpayer that the return is not processable within 90 days after the receipt of the return; however, interest shall not accumulate for the period following this date of notice. (UPIA Section 3-2) Notice by the Department must be in writing and is effective on the date mailed to the taxpayer at the last known address for the taxpayer according to Department records.
f) Interest on amounts refunded or credited pursuant to the filing of an amended return or claim for refund shall be determined from the due date of the original return or the date of overpayment, whichever is later, to the date of the payment by the Department without regard to processing time by the Comptroller or the date of credit by the Department or without regard to the date on which the credit is applied to the taxpayer's account. (UPIA Section 3-2(d)) Interest on overpayments due pursuant to the filing of an amended return or claim for credit will be allowed as specified in this subsection (f) and subsection (b) except:
g) If the Department notifies the taxpayer that a return is unprocessable later than 90 days from the date the return is received, the Department will be required to pay interest only from the due date of the original return to the date of the Department's notice to the taxpayer that the return is unprocessable.
EXAMPLE 1: A corporate income tax return reflecting a refund of $10,000 for the taxable year ending December 31, 1994 was filed on March 15, 1995. On June 1, 1995, notice was given that the return is not processable. The taxpayer responded on July 1, 1995 with information suitable to process the return. If a refund is approved by October 1, 1995, no interest will be allowed because notice was given within 90 days after the date the return was received and the refund was approved within 90 days after the date the return was made processable.
EXAMPLE 2: Same facts as in the preceding example except that notice was not given until June 16, 1995. In this case, interest will be allowed from March 15, 1995 through June 16, 1995.
EXAMPLE 3: Same facts as in Example 2 except that the refund is not approved until November 1, 1995. In addition to the interest provided in Example 2, interest will also be allowed from July 1, 1995 through November 1, 1995.