How Illinois collects
The Illinois Department of Revenue (IDOR) starts with a bill that itemizes tax, penalty, and interest and explains your rights. If it isn't paid by the date on the notice, collection continues, and IDOR's tools are substantial:
- Wage levies. Your employer must deduct up to 15% of your gross pay and send it to IDOR. You receive at least 10 days' notice before the levy is sent.
- Bank levies. Your bank must hold the levied funds, up to the amount owed, for 20 days before sending them to IDOR, again with at least 10 days' notice first.
- Liens. An Illinois tax lien is enforceable for 20 years, appears in IDOR's public lien registry, and generally prevents selling or transferring the property until the past-due amount is paid. You also pay the filing and release fees.
- Seizure of property. IDOR can seize real estate and personal property after at least 10 days' notice. Most seized property can't be sold for at least 20 days.
- License actions. IDOR can seek to revoke, suspend, or refuse to renew business and professional licenses, sales tax business registrations (after a hearing), liquor licenses, and corporate charters.
- Collection agencies. If IDOR can't reach you, it may refer the debt to a private agency, whose fees are added to what you owe.
The 20-day bank levy window
Like the IRS's 21-day hold, Illinois's 20-day holding period is your chance to act. During that window, setting up a payment arrangement or showing that the levy is improper or causing hardship can lead to a release before the funds are sent. After the funds go to IDOR, recovering them is much harder. If your account has been frozen, call right away. See also bank levy release if the IRS is involved too.
Use the 10-day notice. Illinois gives at least 10 days' notice before sending a wage or bank levy. If you receive one, that's the moment to set up an arrangement, before your employer or bank is involved.
Illinois payment plans
IDOR offers installment payment plans for taxpayers who can't pay in full, requested online through MyTax Illinois or on Form CPP-1. Expect to:
- Have all required returns filed
- Stay current on new taxes while the plan is in effect
- Provide financial information for larger balances or longer terms
A plan stops most new collection actions, but liens already filed generally remain until the balance is paid.
Offers in compromise through the Board of Appeals
Illinois handles offers in compromise through its Board of Appeals. The board can consider a petition to settle a final assessment for a fixed sum when there is uncertainty as to collectibility, looking at your finances, likely future earnings, and the department's realistic chances of collecting. Unlike the IRS program, doubt as to liability isn't a ground for an Illinois compromise. Disputes about whether you owe the tax have to be raised through the protest and appeal process instead.
Owe Illinois and the IRS? We'll put both on one plan.
Get a Free ReviewIllinois businesses and responsible officers
Illinois can assess officers and employees responsible for filing returns and paying taxes personally for a business's unpaid trust taxes, such as sales and withholding tax. If you receive a personal assessment as a responsible officer, you have 60 days from the notice date to protest it. Missing that window makes the assessment much harder to challenge. If your business also owes federal payroll taxes, see payroll tax debt.
Time limits
Illinois collection periods vary. There's no statute of limitations for fraud or failure to file. Otherwise, enforcement generally runs from 2 to 20 years or longer, depending on events such as filing a lien or obtaining a judgment. Don't assume an old Illinois balance has expired. We check before recommending any strategy.
Federal adjustments and Illinois bills
When the IRS changes your federal return, Illinois generally expects a corresponding change to your Illinois return, and it may send its own bill later. If you're resolving an IRS adjustment, plan for the Illinois share too.