I recently had a situation with a client where their 1st Quarter 2022 payroll tax returns were completed incorrectly. We discovered the error in late April and immediately completed an amendment.
The client received a demand letter from the Department a couple of months later requesting the amount that was due on the original IL-941. It was obvious that they had not yet processed the amendment which would clear up any amounts that were due and owing, so we advised them to be patient.
We assumed that nothing serious would happen for at least two years. This has been our experience with the Illinois Department of Revenue (IDOR). If there is some sort of problem, they send a series of letters that normally cover a couple of years.
The first letters ask for an amount. Subsequent letters grow more alarming in tone until they begin threatening a levy.
In this particular instance, the amendment would have handled the situation well before any threats of a levy would occur. But that isn’t what happened in this case.
After sending just two letters, IDOR levied the client’s account for the amount that they thought they were due. This happened inside a period of four months.
We got on the phone with the Department who said they would look into it. A couple of weeks later we discovered that they were yet to process the amendment. It was either lost or is still waiting to be processed in their impossibly long backlog.
When we finally got the correct agent on the phone we found out that IDOR has radically changed their collection process.
1 – The computer randomly chooses cases to levy.
2 – Time is not a factor. It could be two months or two years before a levy is put through on an automated basis.
3 – The amount that they think you owe is irrelevant in their determination to levy. It could be $25, $25,000, or whatever that is taken from your account.
4 – As long as you are 30 days outside of the initial demand letter, you’re fair game.
Let me leave you with this.
When I finally got on the phone with the agent in charge of the case she was completely apologetic. She said that the Department would process a complete refund.
She also said that this was something that the collection division had put into place over a year ago. Of course, they never told anyone about this new reality.
I asked her how we would need to deal with cases like this from now on. She responded by saying that we would need to call immediately when a letter went out.
I asked how anyone could expect that, given the hour and a half it took for me to get her on the phone. She basically said, “Well Chris, I don’t know what else to tell you.”
And here we are.
It’s one thing for the Department to be aggressive in collections and yet another for them to not timely process amendments and be impossible to get on the phone. I would have no problem with them being aggressive in collections, if they were just as aggressive in handling a solution to a problem.
That certainly doesn’t seem to be the case.
Be advised. If you get a collection letter from the state, you need to get that to us when it is received. We are going to need to get on it immediately.
The reasonable days of letting the process correct itself are now a thing of the past.
We’re all going to get through this. Let’s get through it together.
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