I just paid $48.88 to the State of Illinois, a penalty for my supposed late payment of my 2010 taxes.
I mailed my 2010 forms and payments to both the federal government and state government the same day: March 14th (they need to be postmarked by March 15th because I’m an S-Corp).
Miraculously the Federal government — not one to cut corporations any slack deadline-wise — got its forms+payments on-time. It’s just Illinois that says I was late.
Illinois mailed me a notice of penalty while I was traveling last month (Hawaii, Seattle, San Francisco) for $18.88. By the time I got back to my mail this month, I had another notice in which they raised the penalty to $48.88.
Nice rate of increase there. I suspect Illinois hoped they could issue me another penalty increase next month for the entirety of their state deficit.
When I founded Red Shed Software Company I always mailed my tax payments using USPS Certified Mail. Three times I was issued bogus late payment penalties which I was able to defeat with my postal receipt. I learned this technique from my mother, who also used to get issued bogus late payment penalties.
For the last eight years or so the bogus penalties failed to materialize. About four years ago I decided paying the extra ~$3.00 per letter for a postal receipt was no longer necessary.
Apparently the governments are back to their old tricks, so I recommend you learn from my encounter and start paying for Certified Mail.
Money-wise I still came out ahead paying this penalty since sending things via Certified Mail runs me about $30/year. That’s $120 in savings over my four years of filing returns naked.
It’s quite possible this was a fluke and the governments won’t issue me a bogus penalty for many years to come, rendering my insurance a pure waste. But cold numbers don’t represent the emotional payback I feel when I’m able to refute the government’s claims with a piece of paper issued by itself.
