Tax Attorney in Chicago, IL

Federal IRS representation for Chicago individuals and businesses — audits, back taxes, liens, levies, payroll-tax disputes, commodities-trader audits, and U.S. Tax Court litigation right here at the Kluczynski Federal Building. We also coordinate Illinois Department of Revenue matters under Form 2848 Power of Attorney where they sit alongside a federal case.

Reviewed by Parham Khorsandi, Esq. — California Bar #266658. Last reviewed: May 25, 2026.

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If you owe back taxes in Chicago, here is what shapes your 2026 case

Illinois keeps its 4.95% flat personal income tax under 35 ILCS 5/201 — the graduated-rate constitutional amendment failed at the ballot in November 2020, and the flat structure has held since. Corporate income tax sits at 7%, with the 1.5% personal property replacement tax pushing the combined rate to roughly 9.5%. Sales tax in the City of Chicago hits 10.25% (6.25% state, 1.75% Cook County, 1.25% city, 1% RTA) — among the highest combined rates in the country. What did not change: the Illinois Independent Tax Tribunal still requires a petition within 60 days of a final Notice of Deficiency, and the IRS retains its ten-year Collection Statute Expiration Date under IRC § 6502.

If you have received an IRS CP504, LT11, or Statutory Notice of Deficiency, or if the Illinois Department of Revenue has issued a Notice of Tax Liability or Notice of Deficiency with proposed tax, penalty, and interest, the deadline to act is short. We pull your IRS account transcripts, calculate your CSED, file Form 2848 Power of Attorney with the IRS and Form IL-2848 with the Illinois DOR, and put administrative brakes on collection while the case is built.

Federal tax representation for Chicago taxpayers

Victory Tax Lawyers, LLP is a California-Bar-admitted tax-resolution law firm based in Los Angeles. Our federal practice runs nationwide: the Internal Revenue Service accepts our Form 2848 Power of Attorney in every state, and the U.S. Tax Court — a single federal tribunal with jurisdiction over IRS deficiency cases — holds regular trial sessions in Chicago at the John C. Kluczynski Federal Building. From our Robertson Boulevard office in Los Angeles, we represent Chicago residents and Illinois-domiciled businesses in IRS audits, collection cases, Tax Court petitions, Offers in Compromise under IRC § 7122, Installment Agreements under IRC § 6159, lien discharges under IRC § 6325, levy releases under IRC § 6343, and Trust Fund Recovery Penalty defenses under IRC § 6672.

For Illinois state tax matters — the 4.95% flat personal income tax, the parallel 7% corporate rate plus 1.5% replacement tax, the 6.25% state sales tax (with Cook County and City of Chicago add-ons that push combined sales tax to 10.25%), withholding-tax assessments, and contested matters headed to the Illinois Independent Tax Tribunal — we file Form IL-2848 with the Department of Revenue and handle the administrative track directly. For formal litigation in the Illinois Independent Tax Tribunal or the Illinois state courts, we refer to locally admitted Illinois counsel under a co-counsel arrangement. The federal layer is where most metro-Chicago commodities-trader, business-owner, and multi-state cases live, and that is where our engagement carries the load.

Chicago sits at the intersection of global derivatives markets (CME Group, Cboe Global Markets, the former Chicago Board of Trade pits), Big-Law partner economics (Sidley Austin, Mayer Brown, Kirkland & Ellis, Winston & Strawn, McDermott Will & Emery, Jenner & Block all headquartered or anchored in the Loop), airline-crew payroll (United Airlines headquartered at Willis Tower), academic medical centers (Northwestern Memorial, Rush, University of Chicago Medicine), and tightly knit Latino and Polish-American communities in Pilsen, Logan Square, Avondale, and the broader Polish Triangle. Each demographic carries its own tax issue — IRC § 1256 mark-to-market trader cases, § 199A QBI exclusions for service partners, multi-state flight-crew sourcing under 49 U.S.C. § 40116, 1099 physician self-employment, and FinCEN Form 114 (FBAR) for accounts held in Poland, Mexico, and the Caribbean. The federal procedures are uniform; the facts are Chicago-specific.

Your tax rights as a Chicago taxpayer

Two parallel rights frameworks apply when you owe tax. Federal rights come from the Internal Revenue Code and IRS Publication 1, the Taxpayer Bill of Rights. State rights come from the Illinois Income Tax Act (35 ILCS 5/), the Illinois Department of Revenue Law of the Civil Administrative Code (20 ILCS 2505/), and the Illinois Taxpayers' Bill of Rights Act (20 ILCS 2520/). Knowing both is the difference between a clean resolution and a missed 60-day Illinois Independent Tax Tribunal deadline that turns into a state tax lien recorded against your Cook County property.

Right to representation

IRC § 7521(b)(2) and (c) give you the right to be represented by an attorney, CPA, or Enrolled Agent during any IRS examination or interview. Once Form 2848 is on file, the IRS must deal with us first, not you. Illinois mirrors this through Form IL-2848 Power of Attorney filed with the Department of Revenue.

Right to U.S. Tax Court review

IRC § 6213(a) gives you 90 days from a Statutory Notice of Deficiency to petition the U.S. Tax Court without paying the tax first. Miss the 90 days and the federal assessment becomes final. The Tax Court holds regular trial sessions in Chicago at the Kluczynski Federal Building.

Right to Illinois Independent Tax Tribunal review

35 ILCS 1010/1-45 gives you 60 days from a final Illinois DOR Notice of Deficiency to petition the Illinois Independent Tax Tribunal — an independent administrative tribunal established by statute in 2013 and seated at 160 N LaSalle Street, Room S-1000, Chicago. The 60-day window is tighter than the federal 90-day Tax Court deadline. Jurisdiction generally covers protests where the amount at issue exceeds $15,000.

Collection Due Process

IRC § 6320 (lien) and IRC § 6330 (levy) give you a 30-day window to request a CDP hearing once the IRS files a Notice of Federal Tax Lien or issues a Final Notice of Intent to Levy. A timely CDP filing halts collection and preserves judicial review in the U.S. Tax Court.

Right to settle for less than owed

Federally, IRC § 7122 authorizes Offers in Compromise based on doubt as to liability, doubt as to collectibility, or effective tax administration. Illinois runs a parallel Offer-in-Compromise process under 35 ILCS 5/911.2 and the Board of Appeals procedure (20 ILCS 2505/2505-65), with hardship and insolvency standards similar to the federal program. Both regimes require all returns filed before consideration.

Right to recover fees

IRC § 7430 allows recovery of administrative and litigation costs if the IRS takes a position that is not substantially justified and the taxpayer prevails. The threshold is high, but real, especially in audit reconsideration and Innocent Spouse cases under IRC § 6015.

How Victory Tax Lawyers helps Chicago taxpayers

Offer in Compromise under IRC § 7122

We file Form 656 with Form 433-A(OIC) or 433-B(OIC), document the Reasonable Collection Potential, and negotiate doubt-as-to-collectibility offers when full collection is not feasible within the remaining CSED. For Chicago taxpayers, a federal OIC does not resolve Illinois state liability; we run a parallel Illinois OIC or Board of Appeals petition with the Illinois DOR where the state debt is real.

Installment Agreements under IRC § 6159

Streamlined IAs (under $50,000), partial-pay IAs under IRC § 6159(d), and full-pay agreements. We push for partial-pay structures where the IRC § 6502 ten-year CSED will extinguish the balance before payoff — an under-used resolution path for taxpayers between $50,000 and $250,000 in federal debt. Illinois runs its own state installment-agreement program through MyTax Illinois.

Lien discharge, subordination, and withdrawal

When a Notice of Federal Tax Lien blocks a Chicago property sale or refinance, we file Form 14135 (discharge), Form 14134 (subordination), or Form 12277 (withdrawal). NFTLs filed with the Cook County Recorder of Deeds encumber title; the IRS procedures under IRC § 6325 set the cure path. Timing must align with the closing on a Lincoln Park, Lakeview, or Gold Coast transaction.

Levy release under IRC § 6343

Wage levies, bank levies, and accounts-receivable levies. We document economic hardship under IRC § 6343(a)(1)(D) and Treasury Reg. § 301.6343-1(b)(4), and where the levy is procedurally defective, we challenge it through Collection Due Process or Appeals. Illinois state levies follow a parallel track under 35 ILCS 5/1109 and the Department of Revenue Law.

Audit defense and U.S. Tax Court litigation

Correspondence audits, office audits, and field examinations — including sensitive issues like cryptocurrency, foreign accounts under FinCEN Form 114 (FBAR) for Polish and Mexican bank accounts, S-corporation reasonable-compensation, IRC § 1256 trader-status audits, and § 475(f) mark-to-market elections. If the audit closes unfavorably, we petition the U.S. Tax Court within the 90-day IRC § 6213(a) window. Chicago trial sessions are held at the Kluczynski Federal Building.

Penalty abatement under IRC § 6651 and IRM 20.1.1

First-Time Abate administrative relief, reasonable-cause abatement, and statutory exceptions for failure-to-file and failure-to-pay penalties. On accuracy-related penalties under IRC § 6662, we document substantial authority or adequate disclosure to defeat the assessment. Illinois penalties under 35 ILCS 735/3 follow a separate reasonable-cause analysis.

Twelve types of Chicago tax matters we handle

Federal cases for Chicago residents and businesses, framed against the Illinois DOR overlay where it matters.

IRC § 1256 commodities trader audits

CME Group, Cboe Global Markets, and the legacy Chicago Board of Trade make Chicago the commodities-derivatives capital of the world. Section 1256 contracts (regulated futures, foreign currency contracts, dealer equity options) are marked to market at year-end with a fixed 60/40 long-term/short-term split. Mistakes on the Form 6781 calculation, wash-sale errors under § 1091, and the trader-versus-investor classification under § 475(f) drive most of our trader cases.

Trust Fund Recovery Penalty

IRC § 6672 imposes personal liability on officers, partners, and check-signers for unpaid employment-tax withholding. Chicago restaurant, hospitality, construction, and trucking owners are the most frequent targets. The IRS uses Form 4180 interviews to identify responsible persons.

Big-Law partner self-employment

Equity partners at Sidley Austin, Mayer Brown, Kirkland & Ellis, Winston & Strawn, McDermott Will & Emery, and Jenner & Block receive K-1 distributions subject to self-employment tax at 15.3% on top of federal income tax and Illinois 4.95%. The IRC § 199A Qualified Business Income deduction excludes specified service trades or businesses (law, accounting, health) above threshold income, which surprises partners who expected the 20% deduction.

Airline crew state-source income

United Airlines is headquartered at Willis Tower; American Airlines also operates a major Chicago hub. Federal law (49 U.S.C. § 40116) limits state taxation of flight-crew wages to the state of residence and any state where the employee spends more than 50% of scheduled flight time. Audits frequently assert non-resident Illinois liability that the federal statute preempts.

Notice of Federal Tax Lien

NFTLs filed with the Cook County Recorder of Deeds (or the DuPage, Lake, Will, or Kane County recorders for suburban Chicagoland) encumber title and trigger CDP rights under IRC § 6320. A parallel Illinois state tax lien may be recorded by the DOR under 35 ILCS 5/1101.

IRS bank or wage levy

Bank levies on accounts held at Northern Trust, BMO Harris, Chase, Wintrust, Byline Bank, or any Illinois-chartered bank. Wage levies hit Chicago employers within days of CP90 or LT11 issuance — we move on Form 12153 CDP requests and Form 433-F hardship submissions concurrently.

Passport revocation under IRC § 7345

A seriously delinquent tax debt (over $62,000 for 2025, indexed annually) triggers State Department certification and passport hold. With O'Hare International serving as one of the busiest U.S. airports, this hits frequent business travelers and the Polish-American community visiting family abroad hard. We file the IRC § 7345(e) action to reverse the certification.

FBAR and FATCA non-disclosure

FinCEN Form 114 for foreign accounts over $10,000 aggregate. Chicago's Polish-American population (the largest Polish community outside of Poland) and Mexican-American population in Pilsen, Little Village, and Cicero make Streamlined Filing Compliance Procedures a frequent engagement for accounts at PKO Bank Polski, Bank Pekao, Banamex, and BBVA Mexico.

Real-estate § 1031 exchanges

Lincoln Park, Lakeview, Gold Coast, and West Loop investors swapping appreciated property under IRC § 1031. Failures to use a qualified intermediary, missed 45-day identification windows, and missed 180-day exchange completion deadlines turn deferred gain into recognized gain. The 2017 Tax Cuts and Jobs Act limited § 1031 to real property only — personal-property exchanges no longer qualify.

Innocent Spouse Relief

IRC § 6015 relief for spouses jointly liable on a return where the other spouse's items caused the deficiency. We file Form 8857 with a clean factual record — common in divorces involving Chicago small-business owners and commodities traders where one spouse handled the Schedule C or Form 6781 reporting.

Sports-gambling W-2G assessments

Illinois legalized sports wagering in 2019, and DraftKings, FanDuel, Caesars, and BetMGM all operate Chicago-area sportsbooks. Form W-2G reports winnings of $600+ at 300:1 odds (and $1,200+ on slot/bingo, $5,000+ on poker tournaments), with federal withholding under IRC § 3402(q) at 24%. Gambling losses deduct only against winnings on Schedule A, never below zero.

Unfiled returns and SFR substitutes

When the IRS files a Substitute for Return under IRC § 6020(b), the assessed tax is almost always overstated. Filing the correct original return is the first move — it routinely reduces the balance. Illinois runs a parallel substitute-return process under 35 ILCS 5/904, and the DOR uses federal return matching to issue Illinois Notices of Tax Liability whenever a federal SFR posts.

Nine common causes of tax debt for Chicago taxpayers

Patterns we see repeatedly in Chicago-based engagements. None of them are unusual — all of them are resolvable.

1. Commodities trader misclassification

A CME or Cboe trader treating Schedule D capital gains as IRC § 1256 contracts without a clean § 475(f) election, or vice versa, generates downstream wash-sale issues, AMT under § 55, and underwithheld estimated payments. The 60/40 split makes the math forgiving when done right and brutal when done wrong.

2. Self-employment underpayment

Law-firm partners, 1099 physicians at Northwestern and Rush, consultants, and Schedule C operators file with no estimated-tax payments. The first IRS CP14 lands the following spring with penalties under IRC § 6654 and parallel Illinois penalty under 35 ILCS 735/3-3.

3. Business closure

When an LLC or S-corp closes with unpaid Form 941 payroll-tax balances, IRC § 6672 follows the responsible officer personally — well after the entity is dissolved. Illinois pursues a parallel responsible-officer claim under 35 ILCS 735/3-7.

4. Divorce and joint-return fallout

A jointly-filed return tied to a now-former spouse's understatement leaves both parties liable until Innocent Spouse relief under IRC § 6015 is granted. Cook County divorce filings track the federal record.

5. Identity theft and fraudulent returns

A return filed in your name with refund redirected. Form 14039 opens the IRS identity-theft case; the assessment must be corrected, not just protested.

6. Cryptocurrency CP2000 surprise

Exchanges issue Form 1099-DA (introduced 2025), and the IRS computer matches reported gains. Missed basis records turn into ordinary-income assessments at the full sale price. Chicago has a large retail and prop-trader crypto population that crosses over with the futures community.

7. Late-filed or unfiled returns

Failure-to-file under IRC § 6651(a)(1) compounds at 5% per month, capped at 25%. After three years, refunds are barred under IRC § 6511. Illinois imposes a parallel 2% per month late-filing penalty under 35 ILCS 735/3-3.

8. Real-estate sale without estimated tax

A Lincoln Park brownstone, Lakeview condo, or Gold Coast property sale generating substantial capital gain, with no Form 1040-ES payment, produces a tax bill the next April. Investor flips taxed at ordinary-income rates — not capital-gain — under the dealer-status rules of IRC § 1221.

9. Illinois Use Tax on out-of-state purchases

35 ILCS 105/3 imposes a 6.25% Use Tax on goods purchased out of state (online retailers, travel-while-shipping, vehicles bought across state lines) and brought into Illinois for use. The DOR enforces aggressively through Form ST-44 and vehicle-registration cross-matching; many Chicago taxpayers discover the liability years late.

Eight tax liabilities that pull in Chicago taxpayers

Federal authority alongside the Illinois statute where there is a parallel.

Failure to file federal return

IRC § 6651(a)(1) imposes 5%/month, max 25%, plus interest under IRC § 6601. The Illinois mirror is 35 ILCS 735/3-3 imposing a 2%/month late-filing penalty capped at 20% of unpaid state tax.

Failure to file Illinois state return

35 ILCS 735/3-3 imposes a late-filing penalty separate from the federal penalty. The Illinois DOR may issue a Notice of Tax Liability under 35 ILCS 735/904 triggering protest rights and, if the amount exceeds $15,000, an Illinois Independent Tax Tribunal petition window.

Federal § 7122 Offer in Compromise eligibility

All federal returns must be filed (IRC § 7122(d) compliance) and the offer must reflect Reasonable Collection Potential. The non-refundable $205 application fee may be waived for low-income certified offers.

Illinois Retailers' Occupation Tax delinquency

35 ILCS 120/ (the Retailers' Occupation Tax Act) imposes penalties on unpaid state sales tax (6.25% state + Cook County 1.75% + Chicago 1.25% + RTA 1% = 10.25% combined in the City). Personal liability for responsible persons under 35 ILCS 735/3-7 pierces the corporate veil for trust-fund sales tax.

Trust Fund Recovery Penalty

IRC § 6672 imposes 100% personal liability on responsible persons for unpaid trust-fund employment tax. Illinois applies a similar responsible-person rule to withheld state income tax under 35 ILCS 735/3-7.

Accuracy-related penalty

IRC § 6662 imposes 20% on substantial-understatement or negligence; IRC § 6663 imposes 75% on fraud. Defense is built on substantial authority, adequate disclosure, or reasonable cause.

Illinois Use Tax assessment

35 ILCS 105/ imposes a 6.25% Use Tax on out-of-state purchases brought into Illinois. The DOR pursues unreported Use Tax through ST-44 audits, vehicle-registration cross-matching, and out-of-state retailer reporting. Voluntary disclosure programs under 35 ILCS 745/ can resolve historical exposure on favorable terms.

Transferee liability

IRC § 6901 lets the IRS pursue a transferee — a person who received property from a delinquent taxpayer — for the transferor's unpaid tax, up to the value of the transferred property. Illinois pursues a parallel transferee theory under common-law fraudulent-conveyance principles incorporated into 740 ILCS 160/.

What resolution can look like

Debt reduced

An accepted IRC § 7122 Offer in Compromise can resolve six-figure balances for cents on the dollar where Reasonable Collection Potential supports the offer. The acceptance rate sits around 33% nationally; preparation determines the outcome.

Penalties abated

First-Time Abate removes a single year of failure-to-file or failure-to-pay penalties for taxpayers with a clean three-year compliance record. Reasonable-cause abatement under IRM 20.1.1 reaches further when supported by documentation.

Lien released or withdrawn

Once a debt is paid in full, the IRS releases the Notice of Federal Tax Lien within 30 days per IRC § 6325(a). On an Installment Agreement of $25,000 or less, lien withdrawal under Form 12277 can be requested to clear title with the Cook County Recorder of Deeds.

Sample tax-resolution outcomes

Anonymized client matters drawn from our $100M+ aggregate tax-relief record across 2,000+ resolved cases.

Year	Tax debt	Resolution	Final outcome
2024	$152,296	IRC § 6159 Installment Agreement	Accepted at $25/month, partial-pay
2024	$138,296	Streamlined Installment Agreement	Accepted at $25/month
2023	$130,555	Partial-Pay Installment Agreement	Accepted at $50/month
2023	$128,206	IRC § 6159 Installment Agreement	Accepted at $25/month
2022	$116,451	Partial-Pay Installment Agreement	Accepted at $50/month

Past results do not guarantee future outcomes. Each tax case is unique. Results depend on the specific facts of the matter, including the taxpayer's financial condition, compliance history, and the discretion of the Internal Revenue Service and the Illinois Department of Revenue.

Why Victory Tax Lawyers for a Chicago federal-tax case

Victory Tax Lawyers is California-Bar-admitted, not Illinois-Bar-admitted. That distinction matters — and it does not block our work. The U.S. Tax Court is a federal court with nationwide jurisdiction; an attorney admitted to that court may petition and try cases at any of its trial locations, including Chicago at the Kluczynski Federal Building. IRS administrative practice runs on Form 2848 Power of Attorney, which is accepted from any attorney in good standing with any state bar plus an active Centralized Authorization File number. Most of our Chicago clients never need a separately admitted Illinois attorney because the case is, at its core, federal.

For administrative work before the Illinois Department of Revenue — protests, audit responses, OIC submissions, and installment-agreement requests — we file Form IL-2848 Power of Attorney and handle the matter remotely. When a case must move to the Illinois Independent Tax Tribunal (the independent administrative tribunal authorized under 35 ILCS 1010/ and seated at 160 N LaSalle Street in Chicago) or an Illinois state court, we coordinate with locally admitted Illinois counsel under a co-counsel arrangement. The federal portion of the engagement, which is usually the larger exposure, stays with us.

What distinguishes our firm: a California-Bar-admitted managing attorney with active U.S. Tax Court admission, an Enrolled Agent on staff for IRS administrative work, a 5.0 / 72-review Google rating, and $100M+ in cumulative tax relief secured across 2,000+ resolved matters. No marketing claim of being an Illinois-licensed firm — we are not. A factually accurate offer of federal tax representation, available to any Chicago taxpayer, at the same standard we apply to a Los Angeles client. Our 100% remote workflow runs through a secure document portal — you never have to drive to Robertson Boulevard.

Our seven-step process for Chicago clients

Free consultation

A 30-minute call with a tax attorney to scope your matter, identify deadlines, and decide whether engagement is the right move.

Engagement letter

A written scope, fee structure, and conflict check. Flat fees for administrative resolution; hourly or hybrid for litigation.

Form 2848 and CAF

We file the federal Power of Attorney with the IRS and Form IL-2848 with the Illinois DOR, register on the CAF system, and step in as the contact of record.

Transcript and CSED analysis

We pull IRS account transcripts via Form 8821, calculate each year's CSED under IRC § 6502, and identify tolling events.

Strategy memo

A written summary: the resolution path (OIC, IA, CNC, audit response, CDP, Tax Court), the timeline, and the realistic outcome range.

Filing and negotiation

We file the operative document — Form 656, Form 433-A(OIC), Form 9423, Form 12153, or an Illinois Independent Tax Tribunal petition through local counsel — and handle every IRS and Illinois DOR contact.

Compliance monitoring

After resolution we monitor compliance through the OIC five-year terms or the IA term, file future returns, and prevent default.

Two collection clocks: federal CSED and Illinois's 20-year lien rule

The IRS has ten years from the date of assessment to collect a federal tax under IRC § 6502. After the Collection Statute Expiration Date, the debt is extinguished by operation of law. The clock pauses (“tolls”) when an Offer in Compromise is pending, when a Collection Due Process petition is filed, during bankruptcy, when an installment agreement is requested, and when the taxpayer is outside the United States for six months or more.

Illinois runs a parallel state collection rule. Under 35 ILCS 5/911, the Illinois DOR must issue a Notice of Deficiency within three years of the return's due date (six years for omissions exceeding 25% of gross income, no limit for fraud or unfiled returns). Once an Illinois tax lien is recorded under 35 ILCS 5/1101, it remains a lien on the taxpayer's real and personal property for 20 years — far longer than the federal ten-year CSED. Many Chicago taxpayers carry a federal CSED that will expire well before the Illinois lien is released. Pull both records and know both dates before agreeing to any payment plan or amended return that could restart a clock.

Chicago tax authorities and venues

A working knowledge of the tribunals, agencies, and field offices in metro Chicago is what separates an answered Notice from a wage levy. Below is the working list our firm uses on every Chicago matter.

Internal Revenue Service — Chicago TAC

The federal tax authority, at irs.gov. The Chicago Taxpayer Assistance Center operates at 230 S Dearborn Street, Chicago IL 60604, inside the John C. Kluczynski Federal Building. Appointments required.

U.S. Tax Court — Chicago trial sessions

The U.S. Tax Court holds regular trial sessions in Chicago at the John C. Kluczynski Federal Building, 230 S Dearborn Street. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline runs from the IRS Statutory Notice of Deficiency under IRC § 6213(a).

Illinois Department of Revenue

The state tax authority, at tax.illinois.gov. Springfield headquarters with a Chicago Regional Office at the James R. Thompson Center, 100 W Randolph Street, Suite 7-100, Chicago IL 60601. Administers the 4.95% flat personal income tax, the 7% corporate income tax plus 1.5% replacement tax, the 6.25% state sales tax, withholding tax, and Use Tax under 35 ILCS 105/.

Illinois Independent Tax Tribunal

The independent administrative tribunal established by statute in 2013, authorized under 35 ILCS 1010/ and seated at 160 N LaSalle Street, Room S-1000, Chicago IL 60601. Hears disputes between taxpayers and the Illinois Department of Revenue where the amount in controversy exceeds $15,000. 60-day petition deadline from a final Notice of Deficiency. Decisions are appealable to the Illinois Appellate Court.

Cook County Treasurer

The county tax-collection authority for Chicago. Office at 118 N Clark Street, Room 112, Chicago IL 60602. Page: cookcountytreasurer.com. Administers Cook County property-tax billing and collection. Federal NFTLs affecting Cook County property are recorded with the Cook County Clerk.

Cook County Assessor

The county assessment authority. Office at 118 N Clark Street, Room 320, Chicago IL 60602. Page: cookcountyassessor.com. Sets the assessed value of Chicago property — the starting point for the county tax bill. Property-tax appeals run through the Cook County Board of Review and (on further appeal) the Illinois Property Tax Appeal Board.

City of Chicago Department of Finance

The municipal revenue authority at 333 S State Street, Chicago IL 60604. Administers the City of Chicago amusement tax, lease-transaction tax (cloud-software tax), personal-property lease tax, parking tax (one of the highest in the country at 22% on weekday off-street parking), restaurant tax, and hotel accommodations tax separate from county property tax and state sales tax.

U.S. District Court — Northern District of Illinois, Chicago

Refund suits filed after payment of tax and exhaustion of administrative remedies under IRC § 7422 may be brought in the U.S. District Court (N.D. Ill., Eastern Division, Everett McKinley Dirksen Federal Building, 219 S Dearborn Street) or the U.S. Court of Federal Claims in Washington, D.C.

IRS Independent Office of Appeals

The administrative-appeals body within the IRS that resolves cases without litigation. Chicago cases run through the Appeals offices serving the Midwest region. Filings: Form 9423 (collection appeal) and Form 12153 (CDP). Page: irs.gov/appeals.

Taxpayer Advocate Service — Chicago

An independent organization within the IRS that helps when normal channels stall. The Chicago TAS office serves taxpayers across northern Illinois. Page: taxpayeradvocate.irs.gov.

Speak with a tax attorney about your Chicago matter

Free consultation, attorney-client privileged, no obligation. If a Notice of Deficiency, a Final Notice of Intent to Levy, or an Illinois DOR Notice of Tax Liability is in front of you, the deadline to respond is real and short — call today.

Call (800) 883-8301 Free Consultation

Frequently asked questions — Chicago tax

Does Illinois have a state income tax?

Yes. Illinois has a 4.95% flat personal income tax under 35 ILCS 5/201. The graduated-income-tax constitutional amendment failed at the November 2020 ballot, so the flat structure has held. Corporate income tax is 7%, with an additional 1.5% personal property replacement tax that pushes the combined corporate rate to 9.5%. Chicago residents pay no city income tax. Sales tax in the City of Chicago reaches 10.25% (6.25% state + 1.75% Cook County + 1.25% city + 1% Regional Transportation Authority) — one of the highest combined sales-tax rates in the country.

Where is the closest U.S. Tax Court trial location to Chicago?

The U.S. Tax Court holds regular trial sessions in Chicago itself at the John C. Kluczynski Federal Building, 230 S Dearborn Street. A taxpayer anywhere in northern Illinois can request the Chicago trial location when filing the Tax Court petition. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline from the IRS Statutory Notice of Deficiency under IRC § 6213(a) is jurisdictional — a single day late and the federal assessment becomes final.

What is the Illinois Independent Tax Tribunal and what is its deadline?

The Illinois Independent Tax Tribunal is an independent administrative tribunal established by the Illinois General Assembly in 2013 (effective January 1, 2014), authorized under 35 ILCS 1010/ and seated at 160 N LaSalle Street, Room S-1000, Chicago IL 60601. It hears disputes between taxpayers and the Illinois Department of Revenue in matters where the amount at issue exceeds $15,000. The petition deadline is 60 days from a final DOR Notice of Deficiency — tighter than the federal 90-day Tax Court deadline. Decisions are appealable to the Illinois Appellate Court. Victory Tax Lawyers refers Illinois Independent Tax Tribunal litigation to locally admitted Illinois counsel; we handle the federal portion and DOR administrative work directly.

What is Illinois's collection statute of limitations?

35 ILCS 5/911 gives the Illinois DOR three years from a return's due date to issue a Notice of Deficiency (six years for omissions exceeding 25% of gross income, no limit for fraud or unfiled returns). Once an Illinois tax lien is recorded under 35 ILCS 5/1101, the lien remains in place against the taxpayer's real and personal property for 20 years — substantially longer than the federal ten-year CSED under IRC § 6502. Pulling both records is the first step before agreeing to any payment plan that might restart a clock.

Can I be audited by both the IRS and the Illinois DOR for the same year?

Yes. The IRS and the Illinois Department of Revenue operate independently and share information through the IRS-state exchange program. A federal audit adjustment is routinely reported to Illinois under the state's federal-change reporting rule (35 ILCS 5/506), and vice versa. We coordinate the two audits to prevent inconsistent positions on the federal record from costing you on the Illinois return. Because Illinois maintains a 4.95% flat rate, a federal adjustment now produces a predictable state follow-on calculation.

Does Illinois offer an Offer in Compromise equivalent to the federal program?

Yes, through two paths. The Illinois DOR accepts Offers in Compromise on doubt-as-to-collectibility grounds under 35 ILCS 5/911.2 administrative procedure. Separately, the Illinois Board of Appeals (authorized under 20 ILCS 2505/2505-65) considers requests for relief from final assessments based on financial hardship or doubt as to the underlying liability. All Illinois returns must be filed before consideration, and a financial-disclosure package is required. We typically run an Illinois OIC or Board of Appeals petition in parallel with the federal Offer where both debts are real.

I'm a commodities trader at CME or Cboe — what tax issues should I worry about?

Three things sit on top of every CME or Cboe trader file we open. First, the IRC § 1256 mark-to-market rules apply to regulated futures, foreign-currency contracts, and dealer equity options — reported on Form 6781 with a fixed 60% long-term / 40% short-term character split, regardless of holding period. Second, the IRC § 475(f) trader-status election can convert capital gains and losses into ordinary income and exempt the trader from the § 1091 wash-sale rule — powerful when used right, expensive when misapplied. Third, the IRS audits trader-status claims aggressively for substantial-activity, frequency, and continuity. Documentation drives outcome.

I work for United Airlines and live in another state — am I taxed by Illinois?

Federal law — 49 U.S.C. § 40116(f) — preempts state taxation of flight-crew wages except in the crew member's state of residence and any state where the crew member performs more than 50% of scheduled flight time. United is headquartered at Willis Tower, but a flight attendant or pilot domiciled in Florida, Texas, or Nevada (no-income-tax states) cannot be taxed by Illinois on wages earned outside Illinois airspace. Audits that assert Illinois liability against non-resident crew often fail when the federal preemption is properly raised.

Can a California-Bar-admitted attorney represent me in Chicago?

For federal IRS matters — yes. The IRS accepts Form 2848 Power of Attorney from any attorney in good standing with any state bar. The U.S. Tax Court is a single federal court with nationwide jurisdiction; an attorney admitted to that court may represent a taxpayer at any Tax Court trial location, including Chicago. For Illinois DOR administrative work, we file Form IL-2848 Power of Attorney and handle the matter remotely. For formal litigation in the Illinois Independent Tax Tribunal or an Illinois state court, we co-counsel with locally admitted Illinois attorneys. Most engagements — audit defense, OIC, IA, levy release, Tax Court — are federal and stay entirely with our firm.

I have a Polish or Mexican bank account — do I have to report it?

Yes, if the aggregate value of all foreign financial accounts you own or have signature authority over exceeded $10,000 at any point during the calendar year. FinCEN Form 114 (FBAR) is due April 15 with an automatic extension to October 15. Non-willful failure to file carries up to a $10,000 civil penalty per violation; willful failure can reach the greater of $100,000 or 50% of account balances. The IRS Streamlined Filing Compliance Procedures — both Domestic and Foreign — offer a path to bring accounts at PKO Bank Polski, Bank Pekao, Banamex, BBVA Mexico, and similar institutions into compliance with substantially reduced penalty exposure. Chicago's Polish-American and Mexican-American communities make this a frequent engagement.

What if I have unfiled returns going back several years?

The IRS Voluntary Filing Compliance policy and IRM 5.1.11.6 generally require the last six years of returns to bring a taxpayer back into compliance. Filing prior-year returns is the first step before any OIC, IA, or CNC request — IRC § 7122(d) compliance is a prerequisite for a federal Offer. Refunds claimed on returns filed more than three years after the original due date are time-barred under IRC § 6511(b)(2). Illinois follows a parallel filing-compliance posture; the DOR may issue a substitute Notice of Tax Liability under 35 ILCS 5/904 when a taxpayer fails to file.

Can the IRS levy my Chicago bank account or wages?

Yes — after a Final Notice of Intent to Levy (CP90 or LT11) and expiration of the 30-day Collection Due Process window under IRC § 6330, the IRS may levy bank accounts at Northern Trust, BMO Harris, Chase, Wintrust, Byline Bank, or any Illinois-chartered institution and serve wage levies on Chicago employers. A timely Form 12153 CDP request halts collection while the case is reviewed by Appeals. After a CDP determination, the taxpayer has 30 days to petition the U.S. Tax Court under IRC § 6330(d)(1). Illinois issues parallel state levies under 35 ILCS 5/1109 that work similarly through bank and employer service.

I'm a Big-Law partner — why did I owe so much tax this year?

Equity partners at Sidley Austin, Mayer Brown, Kirkland & Ellis, Winston & Strawn, or any Chicago-based AmLaw 100 firm receive Schedule K-1 distributions rather than W-2 wages. There is no employer withholding, so the entire federal tax liability (up to 37% marginal), the 3.8% Net Investment Income Tax under IRC § 1411 where applicable, the 15.3% self-employment tax on partnership earnings under IRC § 1402, and the 4.95% Illinois flat rate all fall on quarterly Form 1040-ES estimated payments. The IRC § 199A qualified-business-income deduction phases out for specified service trades and businesses (law, accounting, health, consulting) above income thresholds, removing a deduction many newly-promoted partners expect.

What is the difference between a federal Notice of Deficiency and an Illinois DOR Notice of Tax Liability?

A federal Statutory Notice of Deficiency (the “90-day letter”) is the IRS's final pre-assessment notice; it triggers the 90-day U.S. Tax Court petition deadline under IRC § 6213(a). An Illinois DOR Notice of Deficiency under 35 ILCS 5/904 triggers a 60-day window to petition the Illinois Independent Tax Tribunal (where the amount exceeds $15,000) or to file a written protest with the DOR (under that threshold). Both notices are time-critical, but the Illinois clock is shorter and the jurisdictional threshold matters. Missing either deadline forfeits the right to pre-payment hearing — you can still pursue post-payment remedies (federal refund suit under IRC § 7422 or Illinois refund claim under 35 ILCS 5/909), but the procedural posture changes dramatically.

How long does a federal Offer in Compromise take to process?

An IRS Offer in Compromise typically takes six to twelve months from filing to a final decision. The IRS deems an Offer accepted if not rejected within 24 months under IRC § 7122(f). While the OIC is pending, IRC § 6331(k) bars most levies, and the CSED is tolled. Rejected offers carry a 30-day Appeals window. A well-documented Offer with a complete Form 433-A(OIC) or 433-B(OIC) financial package moves faster than one returned for incompleteness. An Illinois OIC or Board of Appeals petition typically runs four to nine months on a parallel track.

Will hiring a tax attorney stop IRS collection action immediately?

Once Form 2848 is on file, the IRS routes all communication through the attorney and stops contacting the taxpayer directly. Active levies are not automatically lifted by the POA filing alone — release requires either a financial showing under IRC § 6343, a CDP filing under IRC § 6330, or an installment-agreement / OIC submission that triggers the IRC § 6331(k) collection bar. We move on those concurrently when a levy is in place. Illinois state collection follows a similar pattern: a Form IL-2848 routes state contact, and a pending Illinois OIC or installment agreement pauses enforcement.

I won money on DraftKings or FanDuel in Illinois — what do I owe?

Illinois legalized sports wagering in 2019. Form W-2G reports winnings of $600 or more at 300:1 odds (and other thresholds for slot machines, bingo, keno, and poker tournaments). The federal backup-withholding rate under IRC § 3402(q) is 24% on reportable winnings; Illinois imposes a separate withholding requirement at the state's 4.95% rate. Gambling losses deduct only against gambling winnings under IRC § 165(d) and only if the taxpayer itemizes on Schedule A — losses can never reduce gambling income below zero. Illinois does not allow a gambling-loss deduction against state income, which often surprises Chicago bettors.

About the author

This page was written and reviewed by Parham Khorsandi, Esq., Managing Attorney of Victory Tax Lawyers, LLP. Cal Bar #266658. Admitted to practice before the United States Tax Court. Mr. Khorsandi has resolved over 2,000 federal tax matters and secured more than $100 million in tax relief for clients across all 50 states.

Page last reviewed: May 25, 2026. Editorial standard: every federal-statute citation links to law.cornell.edu (Legal Information Institute, Cornell Law School). Every Illinois statute citation references the Illinois Compiled Statutes maintained by the Illinois General Assembly. Every administrative authority links to its primary .gov source. Material changes to the law are reflected within 30 days of effective date.

Attorney Advertising. This page is provided by Victory Tax Lawyers, LLP for general informational purposes only. Nothing on this page constitutes legal advice, creates an attorney-client relationship, or substitutes for consultation with a licensed attorney about your specific tax matter. Prior results described or referenced do not guarantee a similar outcome. Each tax case turns on its individual facts, applicable law, and the discretion of the Internal Revenue Service, the Illinois Department of Revenue, the U.S. Tax Court, the Illinois Independent Tax Tribunal, or other adjudicating body.

Victory Tax Lawyers, LLP is California-Bar-admitted with its principal office at 1100 S. Robertson Blvd., Los Angeles, CA 90035. The firm represents clients in federal tax matters nationwide via Form 2848 Power of Attorney and admission to the United States Tax Court. The firm is not admitted to practice in the courts of the State of Illinois; where an Illinois state-court appearance or Illinois Independent Tax Tribunal litigation is required, the firm associates with locally admitted counsel.

IRS Circular 230 Disclosure: The discussion of U.S. federal tax issues on this page is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed under the Internal Revenue Code or for promoting, marketing, or recommending to another party any tax-related matters addressed. For specific tax advice, consult independent tax counsel.

Authorities cited on this page

26 U.S.C. § 7122 — Federal Offer in Compromise
26 U.S.C. § 6159 — Installment Agreements
26 U.S.C. § 6321 — Federal Tax Lien
26 U.S.C. § 6325 — Lien Release and Discharge
26 U.S.C. § 6331 — Levy and Distraint
26 U.S.C. § 6343 — Release of Levy
26 U.S.C. § 6502 — Collection Statute Expiration
26 U.S.C. § 6213 — Tax Court Petition Window
26 U.S.C. § 6320 — CDP for Liens
26 U.S.C. § 6330 — CDP for Levies
26 U.S.C. § 6651 — Failure-to-File and Failure-to-Pay
26 U.S.C. § 6672 — Trust Fund Recovery Penalty
26 U.S.C. § 6015 — Innocent Spouse Relief
26 U.S.C. § 7345 — Passport Revocation
26 U.S.C. § 1256 — Mark-to-market commodities contracts
26 U.S.C. § 475 — Trader mark-to-market election
26 U.S.C. § 1031 — Like-kind real-property exchanges
49 U.S.C. § 40116 — State taxation of air-carrier wages
35 ILCS 5/201 — Illinois flat-rate personal and corporate income tax
35 ILCS 5/904 — Illinois Notice of Tax Liability
35 ILCS 5/911 — Illinois assessment statute of limitations
35 ILCS 5/911.2 — Illinois Offer in Compromise authority
35 ILCS 5/1101 — Illinois tax lien
35 ILCS 5/1109 — Illinois levy authority
35 ILCS 105/ — Illinois Use Tax Act
35 ILCS 120/ — Illinois Retailers' Occupation Tax Act
35 ILCS 735/3-3 — Illinois late-filing penalty
35 ILCS 735/3-7 — Illinois responsible-officer liability
35 ILCS 1010/ — Illinois Independent Tax Tribunal Act
20 ILCS 2505/2505-65 — Illinois Board of Appeals
20 ILCS 2520/ — Illinois Taxpayers' Bill of Rights Act