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The Tax Practice of IIT Chicago-Kent College of Law
The Tax Practice of IIT Chicago-Kent College of Law

312-906-5041

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installments, Illinois tax debt, Chicago Tax AttorneysIf you have a tax controversy with the State of Illinois and owe more than you are able to pay, you can apply for an installment payment plan through the State's website. The Illinois Department of Revenue is significantly less transparent about its processes than the IRS, and it accepts significantly fewer installment payment plan requests.

Filing Your Installment Payment Request

The form you need in order to petition for an installment plan is Form CPP-1. If you owe more than $5,000, you will also have to fill out either Form EG-13-I (for an individual), or Form EG-13-B (for a business).

What Happens Next?

Well, that's the frustrating part…it can be difficult to say for sure. Someone in the Illinois Department of Revenue office looks over your request, and he or she decides whether or not they are going to work with you. There is no publicly-available information about precisely how that decision is made, but we do know there are certain factors that will cause the state to refuse your request:
  • If the Illinois Department of Revenue decides you can actually pay the full amount, it will require you to do so;
  • If the Department decides you could pay the full amount if you secured a loan for that amount, it will require you to do so (essentially a payment plan, but you pay a bank rather than the State, and Illinois gets its money up front);
  • If the Department decides you can't really be trusted to pay installments, it may honor your request and put a lien on your property and assets that it has the right to exercise if you don't make every payment on time and in full. This can wreak havoc on your financial reputation;
  • If your request is, in any way, improperly drafted, the Department may return it to you and ask for further information, or it may simply deny it out-of-hand; or
  • If the Department decides your word is good enough, it might just honor your request without a lien…but even if it does, the Department reserves the right to add a lien to the arrangement at any time, for any reason, as it sees fit.

How to Maximize Your Chances of Acceptance

Because the precise mechanisms of the decision-making process are not fully known, the best advice available is fairly basic. First, offer as large of a down payment as you can afford (this is good practice in the long run anyway, as interest still accrues on any remaining balance as you make payments) – 20 percent or more is recommended. Second, make your payments as large as you can tolerate, but do not exceed a 24-month arrangement. The closer to your pain point you get, the more likely the Department is to recognize an honest effort and be willing to work with you.  And if an installment arrangement with the State fails, consider filing an offer in compromise… For further information on State of Illinois installment agreements or any other IRS or Illinois tax issue, contact one of the skilled Chicago tax lawyers at Chicago-Kent Tax Clinic. To schedule a free consultation, call our office today at 312-906-5041.
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