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Illinois sales tax notices

Got a letter from the Illinois Department of Revenue (IDOR)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Illinois Department of Revenue (IDOR) (opens in a new tab)

Official notice guide (opens in a new tab)

Disagree with a notice?

Only notices that state protest rights (such as a Notice of Tax Liability) can be protested. Request an administrative hearing with IDOR (Form AH-4 for sales taxes) or file a petition with the Illinois Independent Tax Tribunal, depending on the amount. You may instead pay under protest and go to circuit court. Audit findings can first be reviewed by the Informal Conference Board.

Deadline: 60 days from the date of a notice that grants protest rights.

Source: Illinois Department of Revenue (IDOR) (opens in a new tab)

Failure to file

The authority has no return on record for a period it expects one, often because an account is open but filings stopped.

Failure to file

Notice of nonfiling

IDOR tells you a required return has not been filed. A second-tier late-filing penalty applies if you do not file within 30 days.

Why you got it

  • A required return was not filed by the due date

What to do

  1. Check whether the return was actually filed
  2. If not, file within 30 days of the notice to avoid the second-tier late-filing penalty, which applies even if no tax is due
  3. Pay the tax due with the return
  4. If you filed late for reasonable cause, send IDOR a written penalty abatement request with a detailed explanation and supporting documents

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: File within 30 days after receiving the notice to avoid the second-tier late-filing penalty.

Source: Pub-103, Penalties and Interest for Illinois Taxes (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Bill for final liability (Final Notice of Tax Due)

A bill showing tax, penalty, and interest owed on a final liability, with an explanation of why you owe it.

Why you got it

  • Tax due was not paid in full with the return
  • A return error was corrected and a balance is due

What to do

  1. Check the bill against your returns, and call the number on the bill if you believe it is wrong
  2. Pay promptly; amounts left unpaid 30 days after the bill date can trigger a cost of collection fee
  3. If the bill includes late-filing or late-payment penalties and you had reasonable cause, request abatement in writing; for final liabilities, the Board of Appeals (Form BOA-1) can waive penalties and interest

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Pay within 30 days of the bill date to avoid a cost of collection fee.

Source: Pub-103, Penalties and Interest for Illinois Taxes (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

AssessmentNTL

Notice of Tax Liability

A formal assessment that grants protest rights. If you do not protest in time, it becomes final.

Why you got it

  • An audit or review found tax due
  • An exemption or amount on a return was denied

What to do

  1. Check the notice against your records and note the 60-day protest window
  2. If you disagree, file Form AH-4 or a Tax Tribunal petition within 60 days, including copies of the notice
  3. If you agree with the tax, pay it; once the liability is final, the Board of Appeals (Form BOA-1) can consider waiving penalties and interest for reasonable cause

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 60 days from the date of the notice to protest.

Source: Your Options to Dispute IDOR Deficiencies, Assessments, or Claim Denials (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Notice of Proposed Liability

Issued by the auditor with proposed audit results. If you disagree with adjustments, you can ask the Informal Conference Board to review it.

Why you got it

  • An audit proposed additional liability

What to do

  1. Review the proposed adjustments with the auditor and provide records that support your position
  2. Request Informal Conference Board review within 60 days if you disagree
  3. Pay agreed amounts; a 20% late-payment penalty applies to amounts not paid within 30 days of the Notice of Audit Results
  4. If penalties were charged and you had reasonable cause, submit a written abatement request to your auditor

Response window: Request Informal Conference Board review within 60 days of issuance.

Source: PIO-60, Illinois Audit Information (opens in a new tab)

Registration

Changes to your permit or account: required registration, filing-frequency changes, revocation, or closure.

Registration

Notice of revocation hearing (sales tax business certificate)

IDOR may ask an administrative law judge to hold a hearing to revoke your sales tax business certificate. You may attend to explain your position.

Why you got it

  • Past-due sales tax
  • Unfiled sales tax returns

What to do

  1. File missing returns and pay or arrange to pay the tax you owe before the hearing
  2. Attend the hearing to explain your position
  3. If revoked, stop taxable sales until a new certificate is issued

Source: Collection Process (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Levy (bank or wage)

IDOR may levy bank accounts or wages. Banks hold funds for 20 days before sending them to IDOR; employers withhold up to 15% of gross pay.

Why you got it

  • Unpaid past-due tax after IDOR notified you

What to do

  1. Pay or set up a payment arrangement as soon as you receive notice
  2. Contact IDOR's Levy Unit with questions
  3. For a final liability, you can still petition the Board of Appeals (Form BOA-1) to waive penalties and interest for reasonable cause

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: IDOR notifies you of the amount owed at least 10 days before sending a levy.

Source: Collection Process (opens in a new tab)

Ask for penalty relief

Penalties on a Illinois notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty abatement for reasonable cause

BOA-1, Board of Appeals Petition (for final liabilities); otherwise a written request
  1. If you haven't already, file the late return and pay the tax due
  2. Send IDOR a written request with a detailed explanation of why you were late and supporting documents (to your auditor if you are under audit)
  3. If the liability is already final, petition the Board of Appeals on Form BOA-1 to waive penalties and interest for reasonable cause

What qualifies: Reasonable cause: a good faith effort to comply using ordinary business care and prudence (86 Ill. Adm. Code 700.400)

Interest: The Board of Appeals has authority to waive penalties and interest based on reasonable cause.

Source: Your Options to Dispute IDOR Deficiencies, Assessments, or Claim Denials (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Illinois sales tax guide.

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