Behind on Illinois Sales Tax? Set Up a Simple Payment Plan Today
How to Set Up a Simple Sales Tax Payment Plan in Illinois
If you’re an Illinois business owner behind on sales taxes, this will help you.
The Illinois Department of Revenue (IDOR) offers a simple way to catch up on past due sales taxes. It’s called a simple installment agreement, and it’s available for many small businesses without needing a lawyer.
Here’s what you need to know about qualifying, applying, and when you should bring in a tax lawyer for legal help.
What Is a Simple Installment Agreement?
A simple installment agreement is a monthly payment plan through IDOR. If your sales tax debt is $10,000 or less, and you can pay it off in 24 months or less, you may qualify.
This type of agreement is designed to help small businesses resolve tax debt without extra legal costs. You don’t need a lawyer to apply as long as you meet the basic requirements.
How to Apply for a Sales Tax Payment Plan in Illinois
Follow these steps to get started:
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Download Form CPP-1
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Google “IDOR Form CPP-1” or visit tax.illinois.gov
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This one-page form is used to request an installment agreement
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Complete the Correct EG Form
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For business owners, use Form EG-13-B
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For individuals (not businesses), use EEG-13-I
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Make Sure You Qualify
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Total tax debt must be $10,000 or less
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Plan must pay off the debt in 2 years (24 months)
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In rare cases, IDOR may allow 36 months, but you must prove a compelling reason
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When Should You Hire a Tax Lawyer?
There are situations where legal help is your best move:
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You owe more than $50,000 in sales tax
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You can’t pay within 24 months
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You want to make an “Offer in Compromise” (or a “Settlement Offer”)
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You wish to reduce penalties due to a reasonable cause
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You’re dealing with unreported cash sales
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You’ve been audited or are about to be audited
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You’re at risk of license revocation or business closure
In those cases, a tax lawyer can negotiate better terms, protect your legal rights, and help keep your business open. If your case is more complicated than a simple payment plan, a tax lawyer will understand the process of creating an affordable option to pay.
Frequently Asked Questions (FAQ)
Q: How do I know if I qualify for a simple plan?
A: If your total tax debt is $10,000 or less, and you can pay it off in 24 months or fewer, you likely qualify. Illinois will typically approve the agreement depending on the completeness of the information you provide.
Q: What disqualifies me from having a simple plan?
A: You cannot have a plan unless you have filed all your required tax returns. You will not qualify if you currently have another installment agreement, have recently defaulted into a previous agreement, or are currently in bankruptcy. Also, if the Department of Revenue determines that you can fully pay the liability, then the State will require you to do so instead of having an installment plan.
Q: Can I apply online?
A: No. You must fill out the CPP-1 and EG-13-B and submit them to IDOR by mail or fax. The fax number and address are both shown on page 3 of the Form CPP-1.
Q: Will IDOR charge interest during the plan?
A: Yes, interest continues to accrue until the full balance is paid. Illinois uses the current federal underpayment rate.
Q: What if I miss a payment?
A: The state will mail a notice advising you of the missed payment and giving you a reasonable time to catch up with your payments. Otherwise, IDOR may cancel your agreement and take collection actions, like garnishing bank accounts or shutting down your business.
Q: How long does it take to get approved?
A: Most plans are reviewed within a few weeks of submission. Be sure to stay current on new tax filings (example: Form ST-1 returns) while you wait.
Final Thoughts
If you can handle your tax debt with a simple plan, take the steps today. It’s fast, low-cost, and keeps you in good standing with the state.
But if things are more complex or you are unsure what to do next, Tax Law Offices, Inc. can help you. We help Illinois businesses get through tax problems —without losing their Certificates of Registration or business.