I'm writing this article because of a crucial due date that a new client of mine missed (prior to becoming my client).
This Illinois company was audited by the Illinois Department of Employment Security (IDES)-we were not their attorneys at that time. After auditing the Company, the IDES auditor reclassified the workers to employee status.
STRICT DUE DATE FOR PROTESTING TAX BILL: This Illinois company (while not yet my client) received the Notice of Determination & Assessment which is the multi-page tax bill that arrives in the mail weeks after the Company has been audited by the IDES.
The strict due date for protesting the Determination & Assessment is 20 days from the date of mailing of the Notice of Determination & Assessment. Unfortunately, that is not much time for the Company to swing into action if they wish to protest and go to a Hearing.
Routinely, when a Company calls me after receiving the Determination & Assessment, I immediately ask what the date of mailing of the Determination & Assessment is (because I want to make sure they get their protest in before the due date passes). The IDES does not accept excuses like the company was shut down for a week and didn't get their mail or that the owner was away on vacation. No excuses are accepted. If the Company misses the due date, the opportunity to protest is gone!
This Company missed (unintentionally) the due date for protesting, and therefore I had to give them the bad news that the Assessment would therefore be considered final, due and owing.
PROTESTING IS EASY BUT IT MUST BE TIMELY: All that's needed is a simple, quickly written protest, but it must be timely filed with the IDES. If the Company does not timely protest, the Company loses ALL RIGHTS OF PROTEST, and the Assessment by law becomes final, due and owing.
If the Company changes its mind in the future and decides it doesn't want a hearing, the Company can always withdraw. So, if in doubt, protest. It is a quick and easy process.
IF COMPANY TIMELY PROTESTS, IT DOESN'T HAVE TO PAY (BUT BEWARE, INTEREST ACCUMULATES): When a Company timely protests the Assessment, the Company does not have to also pay the Assessment at that time. (Of course, the Company can choose to both protest and pay in full.)
However, interest does continue to pile up on any unpaid amount. The IDES interest rate is unfortunately a whopping 24% per year. This interest rate is set by law. If the Company loses at the eventual IDES Hearing, then the Company must pay the Assessment plus accumulated interest unless the Company wishes to protest further (called "filing Objections"-again, a relatively quick and easy process).
For assistance with IDES audits, hearings, and independent contractor agreements (or for consultations on limiting your liability in the use of independent contractors), contact Attorney Nancy E. Joerg, who enjoys a nationwide reputation in working with companies who use Independent Contractors of all types. Nancy Joerg can be reached at Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email her at [email protected].