a) Books and records and other papers
reflecting gross receipts received during any period with respect to which the
Department is authorized to issue notices of tax liability as provided by
Sections 4 and 5 of the Act shall be preserved until the expiration of such
period unless the Department, in writing, shall authorize their destruction or
disposal prior to such expiration.
b) In determining the period for which the
Department is authorized to issue a notice of tax liability, the following
material from Sections 4 and 5 of the Act must be considered.
c)
Except in case of a fraudulent
return (in which instance, there is no statute of limitations),
or except
in the case of an amended return (where a
notice of tax liability may be issued on or after each January 1 and July 1 for
an amended return filed not more than 3 years prior to such January 1 or July
1, respectively), or
except in case of failure to file a
return (in which instance, there is no statute of limitations)
, or except
with the consent of the person to whom the
notice of tax liability is to be issued, no notice of tax liability shall be
issued on and after each January 1 and July 1 covering gross receipts received
during any month or period of time more than 3 years prior to such January 1
and July 1, respectively, except that if a return is not filed at the required
time, no notice of tax liability may be issued on and after each July 1 and
January 1 for such return filed more than 3 years prior to such July 1 and
January 1, respectively. [
35 ILCS 120/4
and 5] Provided, however, that the foregoing limitations upon the issuance of a
notice of tax liability shall not apply to:
1)
the issuance of a notice of tax liability with respect to any period of time
prior thereto in cases where the Department has, within the period of
limitation then provided, notified the person making the return of a notice of
tax liability even though such return, with which the tax that was shown by
such return to be due was paid when the return was filed, had not been
corrected by the Department in the manner required by Section 4 of the Act
prior to the issuance of such notice, and
2) the issuance of any such notice with
respect to any period of time prior thereto in cases where the Department has,
within the period of limitation then provided, notified a person of the amount
of tax computed even though the Department had not determined the amount of tax
due from such person in the manner required by Section 5 of the Act prior to
the issuance of such notice; but in no case shall the amount of any such notice
of tax liability for any period otherwise barred by the Act exceed for such
period the amount shown in the notice of tax liability theretofore issued.
EXAMPLE 1: Taxpayer files a tax return on June 20, 2023. The
statute of limitations for the Department to issue a notice of tax liability
expires June 30, 2026, for the return filed in June.
EXAMPLE 2: Same facts as above, but the Department does not
issue a notice of tax liability by June 20, 2026. It is later discovered in
2027 that the June 20, 2023, return was fraudulent. As such, the Department may
issue a notice of tax liability at any time; there is no time limit.
EXAMPLE 3: Taxpayer files a tax return on July 20, 2024. The
statute of limitations for the Department to issue a notice of tax liability
expires December 31, 2027.
EXAMPLE 4: Taxpayer files all monthly tax returns for the
year 2024, except for October. In January 2028, the Department discovers the
taxpayer failed to file the return for October 2024. While the three-year
statute of limitations to issue a notice of tax liability expired on December
31, 2027, the Department may still issue a notice of tax liability for failure
to file to a return.
d) If, when a tax or penalty or interest
under the Act becomes due and payable, the person alleged to be liable therefor
shall be out of the State, the notice of tax liability may be issued, within
the times limited by the Act, after his coming into or return to the State; and
if, after the tax or penalty or interest under the Act becomes due and payable,
the person alleged to be liable therefor departs from and remains out of the
State, the time of his absence is no part of the time limited for the issuance
of the notice of tax liability; but the foregoing provisions concerning absence
from the State shall not apply to any case in which, at the time when a tax or
penalty or interest becomes due under the Act, the person allegedly liable
therefor is not a resident of this State.
e) The time limitation period on the
Department's right to issue a notice of tax liability shall not run during any
period of time in which the Order of any Court has the effect of enjoining or
restraining the Department from issuing the notice of tax liability.
