Updated July 28, 2015
Small Business Unfiled Unpaid Sales Tax Chicago Illinois
Sales tax problems in the small business sector seem to be increasing.
The economy is lousy, collections are worse than you have ever seen them, and you have a sales tax problem. Your sales taxes were due by the twentieth and you’re simply behind. The delivery guy is bringing inventory that you desperately need because you can’t make money from an empty apple cart, and he needs a check. What do you do?
Well, the Illinois Department of Revenue isn’t going to wait forever. This isn’t the sort of thing that your small business can ignore. It’s not going to go away by itself. You will begin getting deficiency letters. If the taxes aren’t filed, and some sort of arrangement is made for their payment, then you will face additional interest, penalties, liens, levies, and audits. Over time the IDOR will simply revoke your sales tax number, which will effectively put you out of business. If you are caught selling retail items in Illinois without a sales tax number, the penalties are severe.
So your small business owes a bunch of Sales Tax and maybe also a bunch of Sales Tax Returns to the Illinois Department of Revenue. What do you do? Bankruptcy will not help you. If you file a bankruptcy on your entity and a personal bankruptcy, it will not do anything to relieve the problem. When you collect sales tax from a customer, its never considered your money in the first place. It doesn’t belong to your entity or to you personally. Just because its in your bank account doesn’t mean that it’s yours. You are the trustee, on behalf of the State of Illinois, to get Springfield their money. If you fail in your duties to get the sales tax money to the state, then there is no relief available in a bankruptcy proceeding.
There are several things that can be done to alleviate this situation. As a highly recommended CPA and EA Firm in Chicago, we have successfully handled dozens of cases. The sales tax returns need to be filed. If we don’t have the money, then it is possible in certain instances, for the State to agree to a payment plan. If that is not possible, then there is a process called Offer and Compromise. Given individual circumstances you can possibly get interest, penalty, even the raw tax reduced.
If you are having problems with your Small Business Unfiled Unpaid Sales Tax Chicago Illinois or have issues with your accounting in general, we would love to help. I enjoy hearing from my readers, and can be contacted at
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.