Illinois – Independent Tax Tribunal Created

SALT Report 1682 – The Illinois Legislature recently created a Tax Tribunal independent of the Department of Revenue.  Effective July 1, 2013 the Tribunal will have the authority to hear and resolve tax disputes between the DOR and taxpayers prior to the taxpayer being required to pay the amounts in question. The Tribunal will conduct administrative hearings for matters concerning Notices of Tax Liability, Notices of Deficiency, Notices of Claim Denial, and Notices of Penalty Liability where the amount in dispute during a tax year or audit period, exceeds $15,000, exclusive of penalties and interest.
Tribunal Members

The governor will appoint a Chief Administrative Law Judge (ALJ) for a five-year term and three additional ALJ’s will be appointed for terms of no more than four years each. After the initial terms are over, ALJ’s other than the Chief ALJ will be appointed to four-year terms. All ALJ’s must meet the following criteria:

  • Licensed to practice law in Illinois for at least eight years at the time of appointment,
  • Has substantial knowledge of state tax laws and the making of a record in a tax case, and
  • Cannot engage in any other gainful employment or business, or hold a position of profit in a government office during the ALJ’s term

The Tax Tribunal’s jurisdiction is limited to the following Illinois tax laws: the Income Tax Act, the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers’ Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, the Tobacco Products Tax Act of 1995, the Hotel Operators’ Occupation Tax Act, the Motor Fuel Tax Law, the Automobile Renting Occupation and Use Tax Act, the Coin-Operated Amusement Device and Redemption Machine Tax Act, the Gas Revenue Tax Act, the Water Company Invested Capital Tax Act, the Telecommunications Excise Tax Act, the Telecommunications Infrastructure Maintenance Fee Act, the Public Utilities Revenue Act, the Electricity Excise Tax Law, the Aircraft Use Tax Law, the Watercraft Use Tax Law, the Gas Use Tax Law, and the Uniform Penalty and Interest Act.

The Tribunal will not have jurisdiction over property tax disputes, exemption determinations, proposed notices of tax liability or proposed deficiency or any notice of intent to take action, any action or determination of the DOR that has become finalized, informal administrative appeal functions of the DOR, or administrative subpoenas issued by the DOR.

The Tribunal may decide questions regarding the constitutionality of statutes and rules as applied to the taxpayer, but it may not determine that a statute or rule is unconstitutional on its face. Prior to a hearing, the parties involved may petition the tribunal for mediation.

Hearings and Decisions

Generally the tribunal will take evidence, conduct hearings, rule on motions, and issue final decisions. Hearings will be open to the public, and rules of evidence and privilege as applied in civil cases in circuit courts will be followed. Taxpayers will have the burden of proof on issues of fact. Once resolved, no person can contest any matter within the jurisdiction of the tribunal in any action, suit, or proceeding in court in the state.

For Further Information:

Illinois State Legislature – HB 5192