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Pursuant to Section 3-4-265 of the Municipal Code of Chicago, Business Taxpayers Assistance Ordinance, taxpayers and tax collectors may disclose any taxes, fees or surcharges due the City, provided certain minimal qualifications are met. The program is designed to encourage self-compliance by allowing taxpayers and tax collectors an opportunity to resolve undisclosed tax and certain non-tax debts without penalty.
Under this program a taxpayer or tax collector must calculate and remit the amounts due for any of the tax or non-tax debts that are to be paid or remitted to the Department of Finance. The discloser must determine the amount it owes for the four-year period immediately prior to the date on which it applies to participate in the program. The discloser must remit, or enter a payment agreement to pay, the full amount of tax and interest it computes to be due. The discloser must also register with the Department and pay all previous deficiencies and/or delinquencies that may have existed before its disclosure. The discloser waives its right to an administrative hearing and to claims for refund or credit, and agrees not to initiate or join any lawsuits for the payments made under the program.
In exchange for voluntarily disclosing and paying or remitting the tax and non-tax debts, the Department agrees to waive all penalties and half of the interest that would otherwise apply. The Department also agrees not to assess the discloser for periods prior to the disclosed four-year period for the taxes disclosed. Should the Department subsequently audit the discloser for the periods, and less than a 10% tax variation is determined in what the discloser remitted as the tax due, the discloser will be liable for the full amount of tax, late penalty and interest due on the additional amount determined. Moreover, if said tax variation is 10% or more, the Department may revoke the terms and conditions of the agreement, assess all applicable penalties, and extend the audit to include all periods open under the statute of limitations.
To qualify for this program, a discloser must not be under audit or investigation. If a discloser has received a written notice relating to an audit or investigation for a tax or taxes, it is prohibited from participating in the program for those taxes. The discloser must also warrant that the taxes being disclosed are not the subject of an audit or investigation by the Department involving a person or entity involved in a prior bulk sale with the discloser, and also that it has not received a Delinquency Notice with respect to the disclosed taxes. The discloser cannot disclose for the tax and period for which it has been issued a Deficiency Notice by the City, but must pay such amounts as part of its disclosure for other periods or taxes.
Taxpayers, tax collectors, and their representatives who wish to file a voluntary disclosure application should do so online using Chicago Business Direct. If the application is approved, the discloser will have 30 days in which to register, calculate, and pay the amounts due, unless granted an extension. The Department will verify the accuracy of the calculations and once the amount due has been confirmed an agreement will be prepared for the discloser's signature. A copy of the fully executed agreement will be provided to the discloser upon fulfillment of all terms of the agreement. If you have any questions regarding the voluntary disclosure program, please contact Emily Kearney at 312-747-3837.