Effective January 1, 2018, the Illinois Department of Revenue will begin maintaining its own public registry for notices of tax liens, ending the longstanding practice of recording the liens with the local county recorder’s office. The new laws were enacted as the new State Tax Lien Registration Act, 35 ILCS 750/1-1 et seq., which became law as part of the larger Public Act 100-0022 in July 2017.

The Illinois tax lien registry applies to the filing of state tax liens for real and personal property, tangible and intangible, against parties with unpaid final state tax liabilities. It does not invalidate liens that were previously filed with the local county recorder’s office; however, future-filed state tax liens will not be recorded with the recorder of deeds. The new law provides that the tax lien will be effective upon registration in the online database, without any further requirement of recording in any specific county. The Illinois tax lien must be registered within 3 years from the date of the final tax liability, and will remain effective for 20 years from the date of filing if not sooner released.

What this means for the Illinois taxpayer: Among the several benefits of the new law, Illinois taxpayers will be able to easily access their state tax lien information and obtain a free PDF copy of any filed Notices of Tax Lien and Releases. The Registry will also help third parties more easily conduct due diligence on a person or property before entering into a contract. On the other hand, the Registry could complicate credit reporting issues of those with Illinois tax liabilities, especially where an original tax lien was recorded with the local county recorder and a subsequent release is only posted to the Department’s Registry. Moreover, the Registry may complicate those wishing to conduct due diligence and delay transactions, as third parties seeking information will need to conduct extra searches in both the Department’s tax lien Registry and the local county recorder’s office, since federal tax liens will continue to be recorded locally.

In any case, a tax professional such as a tax attorney can assist those with Illinois (or federal) tax liabilities to resolve their issues to prevent the registration of a state tax lien or obtain a release or subordination of a tax lien. Gensburg Calandriello & Kanter, P.C. has a wealth of experience helping Illinois taxpayers consider their options and obtain the best possible result given the taxpayer’s particular set of circumstances.

Sandra Mertens
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