While on vacation I spoke with a good friend of mine from Illinois. A couple of years ago his firm had a sales tax issue with the Illinois Department of Revenue. The Illinois DOR accused his firm of not paying all his sales tax on a timely basis, and after audit accused him and his firm of owing hundreds of thousands of dollars.
The audit apparently lasted months, and in the end the DOR and my friend’s firm couldn’t come to an agreement. The case ended up in court with my friend eventually winning. It was something of a Pyrrhic victory, though: Fighting the case cost him $89,000 (that includes the cost of penalties and interest paid to the Illinois DOR and attorney’s fees).
My friend was noting that he had read my blog post on being penny wise and pound foolish. After this case occurred everything he sends to a government agency is sent via certified mail, return receipt requested. Yes, the original issue with the Illinois DOR came about because he couldn’t prove he had timely mailed a sales tax return. He noted that he learned this lesson the hard way.
It’s your choice, but my friend likes the idea of not paying $88,994.21 needlessly. I urge you to use certified mail, return receipt requested (or timely file electronically). It really is a no brainer.
