Proposed Abolition of Illinois Tribunal Would Alter Tax Protests

Illinois taxpayers will be treated fairly during the administrative process if the governor’s proposal to eliminate the Independent Tax Tribunal becomes law, the director of the state’s revenue department said Wednesday.

Governor JB Pritzker’s plan to zero out the tribunal’s funding and move appeals back within the Illinois Department of Revenue’s administrative process “hasn’t received much attention at all” because Tuesday’s primary election was on everyone’s minds, Illinois Department of Revenue Director David Harris said. Taxpayer advocates have been more focused on Pritzker’s proposal to adopt a social media tax like Chicago’s, which was hit with its first legal challenge last week.

Pritzker’s proposed budget for fiscal year 2027, which was released Feb. 18, would merge the duties of the tribunal back into the department “as part of a statewide organizational realignment to streamline state operations.” That would reinstate the status quo before the tribunal was created in 2012.

The proposal would substantially change taxpayers’ abilities to protest liabilities, Harris said at the ABA-IPT Advanced Tax Seminars in New Orleans.

Currently, taxpayers can challenge assessments over $15,000 at the tribunal and no payment is due until the resolution of the case.

If the tribunal is folded back into the the department, the taxpayer would go through the normal administrative remedies: audit, informal conference board, and administrative hearings, Harris said. Or the taxpayer could go straight to court, but would first have to pay the tax bill in protest, he said.

Harris was a member of the Illinois House of Representatives sitting on the revenue committee when the tribunal was created, a process he called “somewhat contentious.”

The business community lobbied for the tribunal because they were concerned they weren’t getting a fair shake when the entire dispute process was internal to the department, Harris said. “It does not mean that they were not handled equitably,” he said.

Now it’s up to the legislature to decide whether the tribunal—which received $711,000 in last year’s budget—should be eliminated, Harris said.

The department generally prefers to reach agreements with taxpayers rather than litigate, Harris said on a panel of state revenue officials.

“We avoid going to court unless we absolutely think we are right,” which was the case in a recent income tax dispute with PepsiCo where the department prevailed at multiple courts, he said.