HOW TO AVOID SUSPENSION OF PROFESSIONAL LICENSE DUE TO UNPAID ILLINOIS TAXES
Illinois professional licenses can become suspended or revoked, related to unpaid Illinois income tax. This article is about how to deal with the Illinois Department of Revenue, and how handle suspension of professional licenses to enforce Illinois tax collection.
This also focuses on how people with tax liens and professional licenses in Illinois deal with the Department of Financial and Professional Regulation (DFPR). It is DFPR that regulates licenses for professional such real estate brokers, dentists, public accountants, and veterinaries, for example. In some cases, this article could also apply to LLC’s as well.
How Illinois Tag-Teams Its Licensees to Collect Tax
This is how it works: When Illinois state taxes are owed, the Illinois Department of Revenue (IDOR) will send notices, invoices, and demands by multiple written communication. The state may even use outside collectors.
The liability is usually no secret. If Illinois must take more aggressive measures, there is usually enough warning. But when that time comes, the state is given much authority over its tactics to collect tax.
The tax lien is one of those tactics. Routinely, when an amount of tax remains unpaid, after several demands for payment, Illinois DOR will issue a state tax lien. This lien is to protect Illinois’ ability to collect the debt.
In addition, parallel with Illinois’ issue of a state tax lien, another tactic is the professional license suspension. Similar to DOR’s written communications, DFPR will also issue multiple letters. The Illinois DFPR will contact that person if he, she or the business holds a professional license. The message is clear: the state is attempting to collect a debt.
If the co-sponsored demands for payment remains unresponded, DFPR will file a Petition for the suspension of that person’s license. Eventually, an Order for Suspension could be issued by a judge.
Fortunately, that Order will allow 60 days for the licensee to remedy the problem. Within that 60 days, it gives you the opportunity to either resolve payment of the tax liability with the Department of Revenue or Request a Hearing with DFPR. Either way, after 2 months, if not enough action is taken, the real estate broker’s license will become sidelined. And that broker or agent cannot make another sale until the tax problem is corrected.
Do This to Avoid Professional License Suspension
If you think that the process has been unfair, or you prefer to challenge any pending license suspension or revocation, you may request a hearing with Illinois Financial & Professional Regulations. You make any protest or appeal through an attorney.
Your other avenue to retain your license is to resolve your tax liability with Illinois Dept. of Revenue. You do have a few options in doing so, and they do not require full payment of the tax to avoid suspension:
• Installment agreements allow for full satisfaction of the tax liability.
• Offer-in-Compromise allow for partial payment of a liability to Illinois.
• If the liability is incorrect, you can request a re-determination of the amount of tax liability.
• Discharge of the Tax in Bankruptcy may be another option.
Any of these options can be instrumental in preserving your license without suspension. If your professional work permit has already been suspended, these options still provide a path to reinstatement. After revocation, the path is much more difficult, but still requires some method of satisfying the tax.
Temporary Restraining Order (TRO) for Protection
The Illinois Department of Revenue has a Board of Appeals. This Board has the authority to allow a protective order, the Temporary Restraining Order, against Illinois state agencies. In emergency cases, the power of the Board may be invoked by filing Illinois’ Form BOA-1, Board of Appeals Petition, to avoid a hardship on the licensee.
The TRO is used to halt collection enforcement (including levies, including license suspensions) while the collection alternative method is being considered. The DOR temporary restraining order is extremely useful in protecting a business owner.
Ultimately, there are several actions any licensee in such an emergency situation should desire:
1) Issue of a temporary restraining order, to stop the enforcement by suspension;
2) An immediate review and determination of the tax payment option requested;
3) Prompt communication to DOR of the tax case resolution; and
4) Prompt communication to DFPR of the satisfaction, to remedy the licensing issue.
The process is not simple, and not always expedient. To avoid unnecessary delays or problems, much care should be taken to correctly pursue this process.
J. Anton Collins (Attorney, Former IRS) is a Chicago area-based tax lawyer with Tax Law Offices and Business Tax Settlement Corp.