Where is the Illinois Department of Revenue Taxpayer Ombudsman hiding? Our letter to Illinois Governor Bruce Rauner

Bruce Rauner, Governor

Office of the Governor

207 State House

Springfield, IL 62706

Dear Governor Rauner,

In 2014 CEO.net ranked Illinois as one of the three worst states to do business in.  Here is one comment from CEO.net, “Illinois is rated in the worst category; their taxing scheme is deleterious (harmful) toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion.”

As a Springfield based accountant for very small business I can tell you that things have gone from bad to worse at the Department.

Here are four examples:

A few weeks ago a client stopped by our office just in tears.  Her deceased husband’s business had been turned over to an attorney for collection of a past due balance tax account by the Illinois Department of Revenue.  Does she have to pay the bill?  He died two years ago.  The Department is aware of the death. We attached a death certificate to a previous notice. Why didn’t the Department file a claim against the taxpayer’s estate?  Why didn’t someone associate the dead taxpayer to the accountant forwarded to the attorney for collection.

A client who was a victim of identity fraud, whose social security number was used to obtain a sales tax number in the 1980’s, had her refund of $544.00 applied to a 1989 sales tax liability that she doesn’t owe, never incurred and is not liable for. Ironically the notice issued by the Department directing the client to call the “phone number below for the location your overpayment was applied”…..has no telephone number.  By the way when we contacted the Department, the obviously burdened and frustrated employee, recommended that the only way to clear up the matter was to have our State Representative intervene.  Otherwise it would take at least four to six months to review our inquiry.

A client made a mistake in reporting his payroll tax wages and liabilities.  Our office prepared the necessary amended payroll forms and filed them with both the Internal Revenue Service and the Illinois Department of Revenue.  No problems with the Internal Revenue Service.  The returns were accepted as filed. Not so with the Illinois Department of Revenue.  The Department rejected our amended returns based on our failure to include corrected W-2 forms.  Of course we did include the forms.  No explanation of what happened to them after they reached the Department for processing.

A single parent of two children just had his bank account levied by the Illinois Department of Revenue in the amount of $200.00 to meet his past due liability. I can understand that the state is knee deep in serious financial difficulties, and should collect every dollar owed. But $200.00 is not going to make much of a difference in things in the long run.  I can assure you that the $200.00 makes all the difference to this struggling taxpayer.  Common sense should prevail in all enforced collection issues.  It appears that the chase for tax dollars is clouding the Department’s judgement. Oh and this just in.  I spoke with a client this morning who told me that the Illinois Department of Revenue has levied his bank account for $38.00.  In this case the taxpayer does not owe the State any money.  We are bogged down with the inability of the Department to process any type of amended return or claim for refund efficiently and accurately.   

We can do better.

I read with interest your “Cutting the Red Tape” initiative. Good start on what may be Mission Impossible in the State of Illinois.  Still solutions to the day to day problems such the ones I listed above,  should not be the sole responsibility of our State Representative to solve. No one is acting as an ombudsmen at the Illinois Department of Revenue to help taxpayers such as the Taxpayer Advocate Service does with the Internal Revenue Service.

Ironically the Department regulations make reference to a “Taxpayer Ombudsman.”  I have quoted below from Title 86, Section 205.20 Illinois Department of Revenue Regulations.

Department Responsibilities

The Department of Revenue shall have the following powers and duties to protect the rights of

Taxpayers:

1. To furnish each taxpayer with a written statement of rights whenever such taxpayer

receives a protestable notice, a bill, a claim denial or reduction regarding any tax. Such

statement shall explain the rights of such person and the obligations of the Department

during the audit, appeals, refund and collections processes. All such written taxpayer

contact shall include the phone number of the Taxpayer Ombudsman.

(Section 4 of the Act).

Restoring the office of “Taxpayer Ombudsman” is a good start.  

Thank you for your prompt response.

Donald C. Fuener E.A.

President

Cc:  Sara Wojcicki Jimenez

Illinois is a Horrendus State. It's Like Doing Business In A Third-World Country

Consider these comments concerning Illinois being the 48th worst state to do business in according to CEO Magazine before you vote next week.



“Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding to address and fix the problems have only exacerbated the situation. More conservative states are easier to work in and with.” 

“Illinois is rated in the worst category; their taxing scheme is deleterious toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion. The Illinois House assembly is inept in addressing the hard issues associated with putting the state’s financial condition in order; they are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.”

“Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.”

June 4, 2014 Client Newsletter

Do you know how much marketing money our tax business spent this year?   I bet you would be surprised if I told you $50.00.  Yet we grew our business exponentially this year.  

How is this possible? Like most small businesses our new business comes from referrals. Yet, like most small business owners, I bet you’re just like us, probably not doing everything you can to get more referrals.

Here are a few useful tips from smallbizcontent.net on how to use referrals to increase your growth .

Ask for referrals. Many entrepreneurs fail to benefit from referrals because they’re simply too shy to ask.

Most satisfied customers are happy to give you referrals–but they won’t think of it if you don’t ask them.

Know the right time to ask. Aim to gather referrals at the completion of a project or upon delivery of a product. The goal is to approach the customer when they are happy with the purchase and the transaction is still fresh in their minds.

Create a system. Set up a procedure for capturing referrals. This can vary depending on your industry. A business-to-business company might ask for referrals during a post-sale phone call or email. A retailer could enclose a card with each purchase that customers can fill out to refer a friend.

Offer a reward. Encourage customers to give referrals by offering incentives, such as a discount on their next purchase, a free month of service or a small gift. Making rewards contingent on whether the referral makes a purchase can encourage higher-quality referrals who are more likely to buy.  We do that, thus the $50.00. However we have found that most clients don’t even want the finder’s fee.  They are glad to pass on our name to their friends, relatives, and colleagues.

Build trust. Customers don’t want their friends bombarded with marketing messages. Make them comfortable providing referrals by explaining how you will use the contact information they provide. Will you send direct mail? Will you contact the person by phone?

Follow up in a timely fashion. If you let referrals languish for months, their value can fade as the relationship between your customer and the prospect changes or your customer becomes less enthusiastic about your business.  Set up a system to contact referrals within two weeks of obtaining them.

Mention the connection, but don’t rely on it. When you contact a referral, be sure to let them know who referred them to you. However, don’t assume that this connection alone will spur the prospect to buy. You need to put forth as much effort as you would with any sale.

Get to know them. Don’t give a “hard sell.” Lay the groundwork for a relationship by offering the referral something useful as an introduction to your business. This could be a whitepaper related to their industry, a free consultation, or a discount on their first purchase.

Provide outstanding service. When you win business from a referral, always provide outstanding service to the new customer. Otherwise, you will make the referring customer look bad for having recommended you, and you might lose not only the new customer’s business, but the old one’s as well.

We spent the Memorial Day weekend in the Detroit, Michigan, suburbs helping my son and his wife move.  Much in the news that weekend was the size of the State of Michigan’s budget surplus. Whether it was a $100 million or $1 billion surplus seemed to be the center of discussion.  In either case, it sure beats the alternative we find here in our home State of Illinois.  The recent Illinois legislative session ended yet again putting off all the tough decisions, deciding that the best course was to kick the can down the road.  How is it that a state like Michigan, with the problems of Detroit worst then you can possibly imagine...they can’t even afford to light or replace their street lights….very eerie at night...manage to generate a surplus, while Illinois seems to just be stagnant?

In our opinion and others in the know it is all about the poor business climate in Illinois.  

A couple of months ago we wrote about the poor economic report card for Illinois’ economy.   Chief Executive Magazine has published in May, an updated ranking of the 2014 best and worst states to do business in.  Guess where Illinois landed?  48.  We did beat New York and California if that is some consolation.

Comments from chiefexecutive.net concerning Illinois’ poor ranking include:

“Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding to address and fix the problems have only exacerbated the situation. More conservative states are easier to work in and with.”

“Illinois is rated in the worst category; their taxing scheme is deleterious toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion. The Illinois House assembly is inept in addressing the hard issues associated with putting the state’s financial condition in order; they are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.”

“Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.”

It is the one CEO comment concerning the Illinois Department of Revenue that really caught our attention.  We have daily contact with the Illinois Department of Revenue.  Talk about an unhappy place. Short staffed, computer systems that aren’t exactly working the way they are suppose to, and a mandate to collect back taxes that that places a priority on collection and not on common sense.  Remember the recent publicity over the closing of the Springfield school supply store Ergadoo?  The audit of their business by the Illinois Department of Revenue over their failure to identify the source of cash sales by non profit customers is the definition of deleterious.  Rather than fight, they closed their store.   

Currently the only way to get any type of response in any of the sticky situations our clients find themselves involved with the Department is by filing a what is called a Board of Appeals Petition.  At a hearing last week, the Board of Appeals administrative law judge lamented that the backlog to hear a case is at least a year, maybe two, phone calls are not returned and their staff of nine is “overwhelmed.”   The problem is and remains to be the fact that it is not going to get any better any sooner.  

Later this month we plan on sending to all tax clients our annual summary that we call “things really smart people, our clients, do such stupid things to their taxes.”   You won’t believe what some of our six figure income clients are telling us about why they can’t pay their taxes.  Stay tuned.   

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