Illinois Administrative Code › Title 86 - REVENUE › Part 700 - UNIFORM PENALTY AND INTEREST ACT › Subpart C - PENALTIES › Section 700.340 - Personal Liability Penalty (UPIA Section 3-7)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
Any officer or employee of any
				taxpayer subject to the provisions of a tax Act administered by the Department
				who has control, supervision or responsibility of filing returns and making
				payment of the amount of any trust tax imposed in accordance with that Act and
				who willfully fails to file the return or make the payment to the Department or
				willfully attempts in any other manner to evade or defeat the tax shall be
				personally liable for a penalty equal to the total amount of tax unpaid by the
				taxpayer including interest and penalties thereon.
(UPIA Section
				3-7(a))
b) The term willful "has
				generally been defined as involving intentional, knowing and voluntary acts or,
				alternatively, reckless disregard for obvious or known risks. [Relevant] cases
				specifically find that according other corporate creditors preferential
				treatment over governmental tax obligation constitutes wilful behavior.
				Further, they find that, in a civil action, wilful conduct does not require bad
				purpose or intent to defraud the government." (Department of Revenue v.
				Heartland Investments, Inc., 106 Ill. 2d 19 (1985))
c)
The Department shall issue a
				notice of penalty liability for the amount claimed by the Department pursuant
				to this Section. Procedures for protest and review of a Notice of Penalty
				Liability issued pursuant to this Section and assessment of the penalty shall
				be the same as those prescribed for protest and review of a Notice of Tax
				Liability or a Notice of Deficiency, as the case may be, and the assessment of
				tax liability under the Act imposing that liability.
(UPIA Section
				3-7(b))
d)
The personal
				liability imposed by UPIA Section 3-7 survive the dissolution of a partnership
				or corporation.
(UPIA Section 3-7(c))
e)
In addition to any other remedy
				provided for by the laws of this State, and provided that no hearing or
				proceeding for review is pending, any Section of a tax Act that provides a
				means for collection of taxes shall in the same manner and to the same extent
				provide a means for the collection of the penalty imposed by this
				Section.
(UPIA Section 3-7(d))
f)
Officer or employee of any
				taxpayer includes a partner of a partnership, a manager or member of a limited
				liability
company
, and a member of a registered limited
				liability partnership.
(UPIA Section 3-7(e))
g)
A trust tax is any tax for which
				an amount is collected or withheld by a taxpayer from another person, and any
				tax for which an amount is required to be collected or withheld by a taxpayer
				from another person, regardless of whether it is in fact collected or
				withheld.
(UPIA Section 3-7(f))
h)
The personal liability imposed by
				this Section is in addition to liability incurred by a partner of a partnership
				or limited liability partnership resulting from the issuance of a notice of tax
				liability issued to the partnership or limited liability partnership.
(UPIA Section 3-7(g))
i)
In
				addition to any other basis for imposition of liability under the UPIA,
				including under subsection (a), any person who collects, withholds, or receives
				a tax, or any amount represented to be a tax, from another person holds the
				amount so collected or withheld in special trust for the benefit of the
				Department and is liable to the Department for the amount so withheld or
				collected plus accrued interest and penalty on that amount. For purposes of
				this subsection (i), "person" has the same definition as provided in ROTA
				Section 1.
(UPIA Section 3-7(h)) Under ROTA Section 1,
"person" means any natural individual, firm, partnership, association,
				joint stock company, joint adventure, public or private corporation, limited
				liability company, or a receiver, executor, trustee, guardian or other
				representative appointed by order of any court.