You can't escape the tax man. At least in IL

[broku518]

Hello.

Not sure if this is known to people, but wanted to share my experience.
I purchased mk4 kit (no tax collected) in 2017. Finished build in 2018.
Submitted paperwork for title and registration couple weeks ago. Well today I got a letter from IRS that I need to pay a late filling fee plus daily interest.

Not a huge deal, couple hundred bucks, but still suprise.

Don't delay your sales tax, at least in Illinois.

[Alig2]

Yup, I just got nailed for $250, was expecting it, just too bad it won’t really get put to good use by the state.

[FLPBFoot]

Thanks Broku518

Got my kit in April this year so will make sure I file that as a purchase when I do my taxes in early 2019.

Steve

[wareaglescott]

The fact that you filed just a couple weeks ago and already got a letter from the IRS is quite amazing to me. I thought it took them 6-9 months to do anything!!

[broku518]

Thanks Broku518

Got my kit in April this year so will make sure I file that as a purchase when I do my taxes in early 2019.

Steve

Hi Steve,
From the letter it looks like you need to pay/stamp the tax this year.

IRS....'you filed your return late. It was due by January 31, 2018 but was postmarked on May 18, 2018.'

fees:
-late payment penalty
-late filling penalty
-interest

[Just puttering]

What would the IRS have anything to do with sales tax?

Also, if sales tax is due when you register the car, that is the date it is due! You should have no late fee???

If it was worth it you could try mentioning that, although it probably would not help.

[broku518]

What would the IRS have anything to do with sales tax?

Also, if sales tax is due when you register the car, that is the date it is due! You should have no late fee???

If it was worth it you could try mentioning that, although it probably would not help.

Right, totally agree. But with Illinois IRS common sense goes out of window. I was told sales tax must be paid when purchased, not at later time. Which can be years or never...

IMHO, they just want their $$ share and move on.

[Clover]

Yup, sales tax is due when the purchase is made, not when the car is registered. Registration is just a way that make sure you paid your taxes. Sorry.

[skidd]

I got burned by the TaxMan too.
The lady at the counter told me I owed her for the tax value of the car. Which at least she only calculated to be $1300 (price of the base kit).
I told her, I "built" the car, not bought it.
She wasn't having it. Showed her pics of the kit arriving in PIECES!! and me BUILDING it.
Didn't care.
I asked to speak to the Supervisor.
Nada.. he didn't care either.
So.. I just forked over the taxes (just under $1k), and walked way mostly smiling since It was after all registered and I could drive it legally!!
Then, when I went home, did lots more research, and found some info about Texas NOT needed to collect tax on a "built" car.
Granted, it's not exactly crystal clear in it's wording.
Now , I just need to decide if I want to contest the tax, or just write it off as a lesson learned. (leaning to the latter)

[Just puttering]

Contest the tax and then be on the states radar! First thought, do anything you can to go un-noticed!

[FLPBFoot]

Hi Steve,
From the letter it looks like you need to pay/stamp the tax this year.

IRS....'you filed your return late. It was due by January 31, 2018 but was postmarked on May 18, 2018.'

fees:
-late payment penalty
-late filling penalty
-interest

Thanks for the info. Guess I better get on with finding the right forms and getting it paid.

Did you buy your engine separate and at a later time? Pay taxes on it too?

Thanks

[broku518]

Thanks for the info. Guess I better get on with finding the right forms and getting it paid.

Did you buy your engine separate and at a later time? Pay taxes on it too?

Thanks

It is form ST-44. Yes, you need to include receipts for the kit and the major components...engine, tranny, rear end. Don't worry about counting every screw and rivet.

I got the kit and drive train like a month apart. It was all brand new. Not sure about the process for a donor parts.

[Clover]

Contest the tax and then be on the states radar! First thought, do anything you can to go un-noticed!

There is no radar to be on and audit selection is automated, so there is no risk to for contesting it. Only potential gain. Having said that, I doubt you win if you do contest. Without a tax attorney, your chances are low and there is no way it makes sense financially to hire a tax attorney.

[Gumball]

Just to clarify - it's not the IRS, but rather the Illinois Department of Revenue.

From what I understand, all sales tax must be paid on the kit and accompanying parts before the Illinois Secretary of State will move forward with your registration. To avoid penalties and interest, I think the state tax code requires you to pay the sales tax on things in the tax year in which they were brought into Illinois. If you paid tax on out-of-state purchases, then you need to show that on the proper forms and, if that tax is lower than the Illinois tax, you have to pay the difference. I'm not sure if Illinois goes to the other state to seek reimbursement for the other part of the tax, though, or if they just write it off.

But yeah, no escaping the tax man..... especially here in the Land of Lincoln.

[FLPBFoot]

Just to clarify - it's not the IRS, but rather the Illinois Department of Revenue.

From what I understand, all sales tax must be paid on the kit and accompanying parts before the Illinois Secretary of State will move forward with your registration. To avoid penalties and interest, I think the state tax code requires you to pay the sales tax on things in the tax year in which they were brought into Illinois. If you paid tax on out-of-state purchases, then you need to show that on the proper forms and, if that tax is lower than the Illinois tax, you have to pay the difference. I'm not sure if Illinois goes to the other state to seek reimbursement for the other part of the tax, though, or if they just write it off.

But yeah, no escaping the tax man..... especially here in the Land of Lincoln.

If it is less than $600 in tax you can wait until filing season for the year you purchased it. If it is more than $600 in tax due they you have 30 days to get it paid.

[FLPBFoot]

It is form ST-44. Yes, you need to include receipts for the kit and the major components...engine, tranny, rear end. Don't worry about counting every screw and rivet.

I got the kit and drive train like a month apart. It was all brand new. Not sure about the process for a donor parts.

Thanks. Yeah I found ST-44. I didn't see that you need to attach copies of the invoices. I'll add those in with the form and check. How much was your late fee and interest? I paid FFR March 10, 2018 but didn't get delivery until April 10, 2018. Payment will go out today. Not sure if they look at payment or taking possession?

Thanks again

Steve

[broku518]

Thanks. Yeah I found ST-44. I didn't see that you need to attach copies of the invoices. I'll add those in with the form and check. How much was your late fee and interest? I paid FFR March 10, 2018 but didn't get delivery until April 10, 2018. Payment will go out today. Not sure if they look at payment or taking possession?

Thanks again

Steve
I happen to mail everything to Springfield for title and registration. It is processed all at the same time. I imagine you don't need the receipts if you only pay the tax.

link: http://www.cyberdriveillinois.com/departments/vehicles/title_and_registration/apply_custom_rod.html

You can call Allan @217-558-2406 for more info or details. He is the one handling my application. Very helpful person.

my tax came to be: 2395.00
late payment fee: 239.50
late filling fee: 47.90
interest: 28.08