2023 Illinois Compiled Statutes › Chapter 20 - EXECUTIVE BRANCH › 20 ILCS 2510/ - Certified Audit Program Law. › Article 2510 - Certified Audit Program

(20 ILCS 2510/Art. 2510 heading)
ARTICLE 2510.  
		CERTIFIED AUDIT PROGRAM
(20 ILCS 2510/2510-1)
Sec. 2510-1. 
		Short title. 
		This Article 2510 of the Civil Administrative
Code of Illinois may be cited as the Certified Audit
Program Law.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-3)
Sec. 2510-3. 
		Findings. 
		The General Assembly finds that:
(1) Voluntary compliance is the cornerstone of an effective tax system.
(2) Despite attempts by the General Assembly, State taxes are not simple.
(3) Even the most diligent taxpayers through mistake or inadvertence may not
pay all taxes due.
(4) The Illinois Department of Revenue lacks the resources to audit the
compliance of all taxpayers.
(5) Illinois certified public accountants provide valuable advice and
assistance to Illinois taxpayers on State tax issues.
(6) A pilot program establishing a partnership between taxpayers, Illinois
certified public accountants, and the Illinois Department of Revenue will
provide guidance to taxpayers and enhance voluntary compliance.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-5)
Sec. 2510-5. 
		Definitions. 
		As used in this Article:
"Certification program" means an instructional curriculum, examination, and
process for certification, recertification, and revocation of certification of
certified public accountants that is administered by the Illinois CPA Society
and that is officially approved by the Department to ensure that a certified
public accountant possesses the necessary skills and abilities to successfully
perform an attestation engagement for tax compliance review in a certified
audit project.
"Department" means the Illinois Department of Revenue.
"Participating taxpayer" means any person subject to the revenue laws
administered by the Department who enters into an engagement with a qualified
practitioner for tax compliance review and who is approved by the Department
under the certified audit project.
"Qualified practitioner" means a certified public accountant who is
licensed to
practice in Illinois and who has completed the certification program.  The
phrase "completed the certification program" means the participant has met all
requirements for the certified audit training course, achieved the required
score on the certification test as approved by the Department, and has been
certified by the Department.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-10)
Sec. 2510-10. 
		Certified audit project.
(a) Subject to appropriation, the Department is authorized to initiate a
certified audit pilot project to
further
enhance tax compliance reviews performed by qualified practitioners and to
encourage taxpayers to hire qualified practitioners at their own expense to
review
and report on their sales tax and use tax compliance. The nature of the
certified audit work
performed by qualified practitioners shall be agreed-upon procedures in which
the Department is the specified user of the resulting report.
(b) As an incentive for taxpayers to incur the costs of a certified audit,
the Department shall abate penalties and interest due on any tax
liabilities revealed by a certified audit, except that this authority to
abate
penalties or interest shall not apply to any liability for taxes that
were collected by the participating taxpayer but not remitted to the
Department nor shall the Department have the authority to abate fraud
penalties.
(c) The certified audit pilot project shall apply only to occupation and use
taxes administered and collected by the Department.
(d) The certified audit pilot project shall not extend beyond July 1,
2004.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-15)
Sec. 2510-15. 
		Practitioner responsibilities. 
		Any practitioner responsible for planning, directing, or conducting a
certified audit or
reporting on a participating taxpayer's tax compliance shall be a qualified
practitioner. For
purposes of this Section, a practitioner is responsible for:
(1) Planning a certified audit when performing work     that involves determining the objectives, scope, and methodology of the certified audit, when establishing criteria to evaluate matters subject to the review as part of the certified audit, when gathering information used in planning the certified audit, or when coordinating the certified audit with the Department.
(2) Directing a certified audit when the work     involves supervising the efforts or reviewing the work of others to determine whether it is properly accomplished and complete.
(3) Conducting a certified audit when performing     tests and procedures or field audit work necessary to accomplish the audit objectives in accordance with applicable standards.
(4) Reporting on a participating taxpayer's tax     compliance in a certified audit when determining report contents and substance or reviewing reports for technical content and substance prior to issuance.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-20)
Sec. 2510-20. 
		Notification.
(a) A qualified practitioner shall notify the Department of an
engagement to perform a
certified audit and shall provide the Department with the information the
Department deems necessary
to identify the taxpayer, to confirm that the taxpayer is not already under
audit by the Department, and
to establish the basic nature of the taxpayer's business and the taxpayer's
potential exposure to Illinois
occupation and use tax laws. The information provided in the notification shall
include the
taxpayer's name, federal
employer identification number or social security number, Illinois business tax
number, mailing address,
business location, and the specific occupation and use taxes and period
proposed to be covered by
the engagement for the
certified audit. In addition, the notice shall include the name, address,
identification number, contact
person, and telephone number of the engaged firm.
(b) If the taxpayer has not been issued a written notice of intent to
conduct
an audit, the
taxpayer shall be a participating taxpayer and the Department shall so advise
the qualified practitioner
in writing within 10 days after receipt of the engagement notice. However, the
Department may
exclude a taxpayer from a certified audit or may limit the taxes or periods
subject to the certified
audit on the basis that the Department has previously conducted an audit, that
it is in the process of
conducting an investigation or other examination of the taxpayer's records, or
for just cause.
(c) Notice of the qualification of a taxpayer for a certified audit shall
toll the statute of
limitations provided with respect to the taxpayer for the tax and periods
covered by the engagement.
(d) Within 30 days after receipt of the notice of qualification from the
Department, the
qualified practitioner shall contact the Department and submit a proposed audit
plan and procedures
for review and agreement by the Department. The Department may extend the time
for submission of
the plan and procedures for reasonable cause. The qualified practitioner shall
initiate action to advise
the Department that amendment or modification of the plan and procedures is
necessary in the event
that the qualified practitioner's inspection reveals that the taxpayer's
circumstances or exposure to the
revenue laws is substantially different than as described in the engagement
notice.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-25)
Sec. 2510-25. 
		Audit performance and review.
(a) Upon the Department's designation of the agreed-upon procedures to be
followed by a
practitioner in a certified audit, the qualified practitioner shall perform
the engagement and shall
timely submit a completed report to the Department. The report shall affirm
completion of the agreed-upon
procedures and shall provide any required disclosures.
(b) The Department shall review the report of the certified audit and
shall accept it when it is
determined to be complete. Once the report is accepted by the Department, the
Department shall issue
a notice of proposed assessment reflecting the determination of any additional
liability reflected in the
report and shall provide the taxpayer with all the normal payment, protest, and
appeal rights with
respect to the liability, including the right to a review by the Informal
Conference Board. In cases where the report indicates an overpayment
has been made, the
taxpayer shall submit a properly executed claim for refund to the
Department. Otherwise, the
certified audit report is a final and conclusive determination with respect to
the tax and period
covered. No additional assessment may be made by the Department for the
specific taxes and period
referenced in the report, except upon a showing of fraud or material
misrepresentation.  This
determination shall not prevent the Department from collecting liabilities not
covered by the report or
from conducting an audit or investigation and making an assessment for
additional tax, penalty, or
interest for any tax or period not covered by the report.
(Source: P.A. 92-456, eff. 8-21-01.)
(20 ILCS 2510/2510-30)
Sec. 2510-30. 
		Rules. 
		To implement the certified audit project, the
Department shall have
authority to adopt rules
including, but not limited to:
(1) The availability of the certification program     required for participation in the project;
(2) The requirements and basis for establishing just     cause for approval or rejection of participation by taxpayers;
(3) Procedures for assessment, collection, and     payment of liabilities or refund of overpayments and provisions for taxpayers to obtain informal and formal review of certified audit results;
(4) The nature, frequency, and basis for the     Department's review of certified audits conducted by qualified practitioners, including the requirements for documentation, work-paper retention and access, and reporting; and
(5) Requirements for conducting certified audits and     for review of agreed-upon procedures.
(Source: P.A. 92-456, eff. 8-21-01.)