The Illinois Independent Tax Tribunal is officially up and running. The Tax Tribunal largely replaces the Illinois Department of Revenue’s Office of Administrative Hearings. Now, protests of Notices of Deficiency, Notices of Tax Liability, Notices of Claim Denial and Notices of Penalty Liability exceeding $15,000 (exclusive of interest and penalties) will be heard by the Tax Tribunal. The Tax Tribunal will hear protests of assessments of 22 different types of taxes, including: Income Tax, Sales & Use Tax, Hotel Operator’s Occupation Tax, Motor Fuel, Automobile Renting Occupation Tax, Telecommunication Excise Tax and Uniform Penalty and Interest. Similar to the Office of Administrative Hearings, taxpayers are not required to prepay the assessment to use the Tax Tribunal, but may be required to post a bond under certain circumstances.
The Tax Tribunal will be more formalistic than Administrative Hearings and will more closely resemble court proceedings. The Tax Tribunal will apply three sets of rules: Illinois Supreme Court rules, the Illinois Code of Civil Procedure and the Tax Tribunal rules (currently in the form of Emergency Regulations). The Tax Tribunal has stated that it will reject Petitions (formerly Protest letters) that do not meet its specific requirements.
Unlike the Department’s Office of Administrative Hearings, the Tax Tribunal is an independent agency and will consist of up to four administrative law judges, for which two are currently appointed. Hearings will generally be open to the public and opinions of the Tax Tribunal will be published. Additionally, an appeal from the Tax Tribunal will go directly to the Illinois Appellate Court and bypass the Illinois Circuit Court. Taxpayers can still however also pay an assessment under protest and file a lawsuit in Illinois Circuit Court under the Protest Monies Act, rather than going through the Tax Tribunal.
One notable difference from the prior practice of protesting an assessment with the Department is that once a Petition is filed with the Tax Tribunal, the Department is now required to file an answer to the taxpayer’s petition within 30 days and each answer shall contain number paragraphs corresponding to the taxpayer’s petition and shall contain a specific admission or denial of each material allegation of fact contained in the petition, its affirmative defenses, if any, and relief sought by the Department.