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Personal liability laws help state taxpayers

Published: Wednesday, Sept. 11, 2013 5:14 p.m. CDT

CHICAGO – A new law to fight fraud and protect workers and taxpayers from businesses that cheat on their taxes and rob the state of money used to pay unemployment insurance benefits has led to a significant increase in the amount of money voluntarily paid to the Illinois Department of Employment Security.

Dubbed the personal liability legislation, lawmakers enabled IDES to hold personally liable the owners of businesses who knowingly cheat on their payroll taxes. The shift from penalizing a business to personal liability led to the increased compliance and is part of Gov. Pat Quinn’s agenda to protect workers and make Illinois one of the top states for business.

“This issue touches every taxpayer. Employers who cheat on their taxes push those costs onto honest workers, honest businesses owners and honest taxpayers,” IDES Director Jay Rowell said. “Shirking these responsibilities and misclassifying workers to pay them less cheats our unemployment insurance program, hurts our economy and undermines legitimate businesses owners.” 

Twenty-nine employers who previously did not pay unemployment insurance have paid $14.9 million and 21 employers committed to paying $18.7 million. The dollars reflect a 30 percent increase in collections since the law began in 2012. Additionally, IDES, this year, has identified 1,300 businesses that misclassified nearly 9,000 workers to avoid paying taxes on $2.3 million in wages. 

– Northwest Herald

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