Not more than once every two years, the village may conduct an audit of a taxpayer’s books and records. Any request for a proposed audit pursuant to any locally imposed and administered tax shall comply with the notice requirements of this subchapter.
(A) Information required. Each notice shall contain the following information:
(1) The tax;
(2) The time period of the audit; and
(3) A brief description of the books and records to be made available for the auditor, in the format maintained by the taxpayer in the ordinary course of its business. The information that may be requested by the Local Tax Administrator, or third party provider, includes:
(a) In an electronic format, used by the taxpayer in the ordinary course of its business, the database used by the taxpayer to determine the amount of tax due to the village; provided, however, that, if the village requests customer-specific billing, usage, and load shape data from a taxpayer that is an electric utility and has not provided the electric utility with the customers’ verifiable authorization required by § 16-122 of the Public Utilities Act, being 220 ILCS 5/16-122, then the electric utility shall remove from the database all customer-specific billing, usage, and load shape data before providing it to the village; and
(b) In a format used by the taxpayer in the ordinary course of its business, summary data, as needed by the village, to determine the unit consumption of utility services by providing the gross therms, kilowatts, minutes, or other units of measurement being taxed within the village’s jurisdiction and the gross revenues collected and the associated taxes assessed.
(4) The identity of the village representative, or third party provider, who will be conducting the audit, together with the written authorization, if applicable.
(5) For audits to be conducted by third party providers, no contact may be made by the third party provider until the Local Tax Administrator’s authorization is received by the taxpayer.
(B) Time for conducting audit.
(1) The audit shall be conducted at a time selected by the Local Tax Administrator, but in no event sooner than 60 days after the date of the notice described in division (A) above; provided, that if the taxpayer notifies the Local Tax Administrator within 30 days of receiving the notice that it is cooperating with audits for three or more municipalities, or municipalities with cumulatively more than 100,000 customers, the audit shall be conducted no sooner than 90 days.
(2) Any audit shall be conducted during normal business hours, and if the date and time selected by the Local Tax Administrator is not agreeable to the taxpayer, another date and time may be requested by the taxpayer within 30 days after the originally designated audit and during normal business hours.
(3) The taxpayer may request an extension of time to have an audit conducted. The audit shall be conducted not less than seven days nor more than 30 days from the date the notice is given, unless the taxpayer and the Local Tax Administrator agree to some other convenient time. In the event the taxpayer is unable to comply with the audit on the date in question, the taxpayer may request another date within the 30 days, approved in writing, that is convenient to the taxpayer and the Local Tax Administrator.
(C) Taxpayer’s books and records.
(1) Every taxpayer shall keep accurate books and records of the taxpayer’s business or activities, including original source documents and books of entry denoting the transactions which had given rise or may have given rise to any tax liability, exemption, or deduction. All books shall be kept in the English language and shall be subject to and available for inspection by the village.
(2) It is the duty and responsibility of every taxpayer to make available his or her books and records for inspection by the village. If the taxpayer (or tax collector) fails to provide the documents necessary for audit within the time provided, the Local Tax Administrator may issue a tax determination and assessment based on the Tax Administrator’s determination of the best estimate of the taxpayer’s liability.
(3) The auditor or third party provider must sign a commercially reasonable confidentiality agreement upon request by the taxpayer.
(D) Audit closure report. Upon the completion of the audit, the Local Tax Administrator must issue an audit closure report to the taxpayer with the results of the audit. If an underpayment is determined by the audit, the taxpayer must submit a written response within 60 days after the date the audit closure report was postmarked stating that it has corrected the error or stating the reason that the error is inapplicable or inaccurate. The municipality then has 60 days after the receipt of the taxpayer’s response to review and contest the conclusion of the taxpayer. If the parties are unable to agree on the disposition of the audit findings within 120 days after the notification of the underpayment to the taxpayer, then either party may submit the matter for appeal as outlined in § 32.08.
(E) Overpayments. If an audit determines there has been an overpayment of a locally imposed and administered tax, written notice of the amount of overpayment shall be given to the taxpayer by the Local Tax Administrator and the auditor, if different, within 30 days of the village’s determination of the amount of overpayment. The audit closure report may satisfy this requirement if it is timely delivered.
(F) Payment to improper entity. In the event a tax payment was submitted to the incorrect local governmental entity, the Local Tax Administrator shall notify the local governmental entity imposing such tax.
(Ord. 10-7, passed 8-17-2010)