No Forgiveness, No Expiry
Would it not be nice if the state of Illinois forgave sales tax debt? Would it be even nicer if they simply let the old debt fall off of your record?
Unfortunately, with the deficit and budget shortfall, don’t expect this to happen in your lifetime.
When the Clock Doesn’t Run
No statute of limitations exists for assessing a liability in cases of fraud or failure to file returns (except for a non-filed use tax return, which has a six-year statute of limitations).
Post-Assessment Collection Periods
Once a liability has been deemed assessed or finalized, the statute of limitations to use enforcement collection action varies from 2 years to 20 years or longer, depending on when one or more of the following actions occurred:
- A lien was filed against your property
- A judgment was entered by the Attorney General
- Personal penalty assessments were issued against any responsible persons involved during incurrence of business debt
- Certain other enforcement actions were used
What is a Statute of Limitations?
Note:
Statute of Limitations is a law which sets the maximum period which one can wait before filing a lawsuit, depending on the type of case or claim.
- The periods vary by state.
- Federal statutes set the limitations for suits filed in federal courts.
- If the lawsuit or claim is not filed before the statutory deadline, the right to sue or make a claim is forever dead (barred).
Frequently Asked Questions
Is there any forgiveness for Illinois sales tax debt?
No. Illinois does not offer forgiveness for outstanding sales tax debt. Given the state’s budget deficit, it is highly unlikely that such relief will be available in the foreseeable future.
Does sales tax debt in Illinois ever expire?
Generally, no. Sales tax debt in Illinois does not expire like other types of debt. The state can continue collection efforts indefinitely unless a specific statute of limitations applies after assessment and enforcement actions.
What is the statute of limitations for unfiled Illinois tax returns?
There is no statute of limitations for unfiled tax returns or cases involving fraud in Illinois. However, a non-filed use tax return has a statute of limitations of six years.
How long can Illinois collect on a finalized sales tax liability?
Once a liability is assessed or finalized, Illinois can pursue enforcement actions from 2 years to 20 years or longer. The exact period depends on specific actions taken by the state, such as liens, judgments, or personal penalty assessments.
What does “statute of limitations” mean in tax law?
The statute of limitations refers to the legal time limit for initiating a lawsuit or enforcement action. If no action is taken before the deadline, the right to do so is lost. However, for certain tax cases in Illinois, these limitations may not apply or may be significantly extended.