the first time, or who should bear the expense of the interim interest, which is essentially
the cost of the Department’s original failures. The taxpayer argues that nothing in the
Articles of Agreement precludes the Department from being made to bear the expense of
its own mistakes.
The taxpayer maintains that under Illinois law, the Department should bear the
cost of the erroneous audit. According to the Illinois Taxpayer Bill of Rights, the
Department has the duty “[t]o abate taxes and penalties assessed based upon erroneous
written information or advice given by the Department.” 20 ILCS 2520/4(c). The
taxpayer claims that it was assessed additional interest as a result of the erroneous advice
that the Department gave during the first audit. In the taxpayer’s view, the Bill of Rights
supports a finding that the Department is responsible for the interim interest.
In addition, the Bill of Rights states that the Department has the duty “[t]o pay
interest to taxpayers who have made overpayments at the same rate as interest charged on
underpayments.” 20 ILCS 2520/4(h). The taxpayer asserts that the State of Illinois, like
all IFTA jurisdictions, charges 1% on underpayments. The taxpayer maintains that the
Department should pay the taxpayer 1% interest on the $69,090.26 that the taxpayer
overpaid to Illinois during the audit period.
The Department argues that pursuant to Article XII, ¶R1260 of the Articles of
Agreement, Illinois must receive written approval from another jurisdiction to waive
interest for that jurisdiction. Only West Virginia has agreed to waive the interest that
accrued in this matter. The Department states that it has no authority to abate the interest
without approval from the other jurisdictions.