Current through Register Vol. 48, No. 38, September 20, 2024
a)
Payments received from a taxpayer
shall be applied against the outstanding liability of the taxpayer, or to an
agreed portion of the outstanding portion of the outstanding liability, in the
following order: the principal amount of the tax, then penalty, and then
interest. (UPIA Section 3-9(d))
b) A taxpayer may direct payment to a
particular liability at the time payment is made to the Department by
indicating the tax type and the tax period for which the payment is made, in
writing on the check or other draft by which the payment is made, in a writing
accompanying that check or other draft, or, in the case of an electronic
payment, in the manner prescribed for identifying the specific method of
payment. If a taxpayer has multiple liabilities to the Department, either based
upon multiple taxes or multiple reporting periods, the taxpayer should make
separate payments of each liability and identify the liability to which payment
is to be directed. The excess of any payment over the amount of the liability
to which the payment is directed shall be treated as a payment for which no
direction was provided.
c) In the
absence of direction from the taxpayer as to which of a taxpayer's outstanding
liabilities a payment is to be applied, the payment shall be applied to the
outstanding liability that became due and payable first, with payment applied
first to the principal amount of the liability and any excess then applied to
penalty and then to interest. If there remain funds after application of the
payment to the oldest outstanding liability, the remainder shall then be
applied to the liability that next became due and payable, in the same manner.
For purposes of this subsection, the determination of when a liability is due
and payable shall be made without regard to due dates for accelerated
payments.
d) Application of
Overpayments of Tax
1) Section 2505-275 of
the Department of Revenue Law [20 ILCS 2505] provides that:
A)
In the case of overpayment of any
tax liability arising from an Act administered by the Department, the
Department may credit the amount of the overpayment and any interest thereon
against any final tax liability arising under that or any other Act
administered by the Department.
B)
The Department may enter into
agreements with the Secretary of the Treasury of the United States (or his or
her delegate) to offset all or part of an overpayment of such a tax liability
against any liability arising from a tax imposed under Title 26 of the United
States Code.
2)
Section 2505-650 of the Department of Revenue Law provides that, upon
certification of past due child support amounts from the Department of
Healthcare and Family Services, the Department of Revenue may collect the
delinquency in any manner authorized for the collection of any tax administered
by the Department of Revenue.
3) Section 2505-655 of the Department of
Revenue Law provides that, upon certification by the Clerk of the
Circuit Court of the amounts of delinquent court fees, the Department of
Revenue may collect the past due fees by intercepting the tax refund of any
person owing the fees.
4)
Section 10 of the Illinois State Collection Act of 1986 [30 ILCS 210] provides
that the Department's Debt Collection Bureau shall serve as the primary
debt collecting entity for the State and in that role shall collect debts on
behalf of agencies of the State, using all legal authority available to the
Department to collect debt referred to it by other agencies of this
State.
5) IITA Section 911.2
provides that a tax officer of another state of the United States may request
that the Department withhold payment of a refund claimed by a taxpayer under
the IITA for application against a delinquent income tax liability owed by the
taxpayer to that state.
e) Order of Application of Tax Overpayments.
IITA Section 911.3 provides standards for determining in which order an
overpayment will be applied when more than one of the provisions in subsection
(d) is applicable. Pursuant to these provisions:
1) In the case of an overpayment for which
the taxpayer has requested a refund or credit, the Department may credit the
overpayment against any final tax liability arising under any Act administered
by the Department. The overpayment shall be applied first to the outstanding
final liability arising under the same Act as the overpayment that first became
due and payable, with payment applied first to the principal amount of the
liability and any excess then applied to penalty and then to interest, and any
remaining amount of the overpayment shall then be applied to the final
liability arising under the same Act as the overpayment that next became due
and payable, in the same manner, until all those liabilities are paid or the
entire amount of the overpayment has been used.
2) Any amount of overpayment remaining after
application of subsection (d)(1) shall then be applied first to the unpaid
final tax liability arising under any other Act that first became due and
payable, first to the liability, then to penalty, and then to interest, and
then to the unpaid final tax liability that next became due and payable in the
same manner, until all those liabilities are paid or the entire amount of the
overpayment has been used.
3) For
purposes of this subsection (e), the determination of when a liability is due
and payable shall be made without regard to due dates for accelerated
payments.
4) Any amount of
overpayment remaining after application of subsections (d)(1) and (2) is
applied in the following order:
A) against
any existing, applicable request to withhold a refund to collect certified past
due child support amounts under Section 2505-650 of the Department of Revenue
Law;
B) against any existing,
applicable request to withhold a refund to collect any debt owed to the
State;
C) against any existing,
applicable request made by the Secretary of the Treasury of the United States,
or his or her delegate, to withhold a refund to collect any tax liability
arising from Title 26 of the United States Code;
D) against any refund withholding request
made by the Secretary of the Treasury of the United States, or his or her
delegate, to collect any nontax debt owed to the United States as authorized
under Section 10(i-1) of the Illinois State Collection Act of 1986;
E) against any existing, applicable refund
withholding request made pursuant to IITA Section 911.2; and
F) against any existing, applicable request
to withhold a refund to collect certified past due fees owed to the Clerk of
the Circuit Court as authorized under Section 2505-655 of the Department of
Revenue Law.
