IL SB2194

Amends the Department of Revenue Law to authorize the Department to adopt rules requiring electronic filing of returns and documents administered by the Department, effective January 1, 2014.

Prohibits individual taxpayers from being required to file electronically under the Illinois Income Tax Act (except as expressly provided in that Act) or under the Watercraft Use Tax Act, Aircraft Use Tax Act, Vehicle Code Section 3-1002, or Use Tax Act Section 10.

Requires the Department to grant waivers of electronic filing requirements for taxpayers lacking internet access, with waivers valid for up to 2 years and renewable indefinitely for 2-year periods.

Establishes penalties for failure to comply with electronic filing requirements: $25 for information returns; $100-$200 or 2-4% of tax liability for income tax returns (amount increases January 1, 2017); and $30 or 3% of payment amount for electronic payment failures (applies only to payments exceeding $1,000).

Provides that electronic filing penalties do not apply if the taxpayer demonstrates reasonable cause, and that electronic filing penalties do not override existing failure-to-file or failure-to-pay penalties under the Uniform Penalty and Interest Act.