Illinois Compiled Statutes
35 ILCS 735/3-8 (2026)
No penalties if reasonable cause exists
✓ current as of May 2026
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(35 ILCS 735/3-8)
(from Ch. 120, par. 2603-8)
Sec. 3-8.
No penalties if reasonable cause exists.
The penalties imposed
under the provisions of Sections 3-3, 3-4, 3-5, and 3-7.5
of this Act shall not apply if the taxpayer shows that his failure to file a
return or pay tax at the
required time was due to reasonable cause. Reasonable cause shall be
determined in each situation in accordance with the rules and regulations
promulgated by the Department. A taxpayer may protest the imposition of a
penalty under Section 3-3, 3-4, 3-5, or 3-7.5 on the basis
of reasonable cause without
protesting the underlying tax liability.
(Source: P.A. 91-803, eff. 1-1-01.)
Notes of Decisions
Cited in 13
cases (5 in the last 5 years), 2002–2026 · leading case: Horsehead Corp. v. Dep't of Revenue, 2019 IL 124155 (Ill. 2019).
Horsehead Corp. v. Dep't of Revenue, 2019 IL 124155 (Ill. 2019). “” 35 ILCS 735/3-8 (West 2016). ¶ 48 The Department’s regulation on what should be considered as reasonable cause to avoid penalties provides, in pertinent part: “b) The determination of whether a taxpayer acted with reasonable cause shall be made on a case by case basis taking…”
Shared Imaging, LLC v. Hamer, 2017 IL App (1st) 152817 (Ill. App. Ct. 2017). “¶ 75 Pursuant to section 3-8 of the Uniform Penalty and Interest Act (35 ILCS 735/3-8 (West 2008)), penalties for the failure to file or pay taxes on or before their due date will not apply if the failure was due to “reasonable cause.”
Shared Imaging, LLC v. Hamer, 2017 IL App (1st) 152817 (Ill. App. Ct. 2017). “¶ 75 Pursuant to section 3-8 of the Uniform Penalty and Interest Act (35 ILCS 735/3-8 (West 2008)), penalties for the failure to file or pay taxes on or before their due date will not apply if the failure was due to “reasonable cause.”
Horsehead Corp. v. Illinois Dep't of Revenue, 2018 IL App (1st) 172802 (Ill. App. Ct. 2018). “¶ 25 Next, Horsehead argues that, should we affirm the tax tribunal’s decision on Horsehead’s use tax liability, the late payment penalties and late filing penalties should be abated because it satisfies the “reasonable cause” exception in section 3-8 of the Uniform Penalty and…”
Horsehead Corp. v. Dep't of Revenue & the Ill. Indep. Tax Tribunal, 2018 IL App (1st) 172802 (Ill. App. Ct. 2018). “¶ 25 Next, Horsehead argues that, should we affirm the tax tribunal's decision on Horsehead's use tax liability, the late payment penalties and late filing penalties should be abated because it satisfies the "reasonable cause" exception in section 3-8 of the Uniform Penalty and…”
Horsehead Corp. v. Dep't of Revenue, 2019 IL 124155 (Ill. 2020). “” 35 ILCS 735/3-8 (West 2016). ¶ 48 The Department’s regulation on what should be considered as reasonable cause to avoid penalties provides, in pertinent part: “b) The determination of whether a taxpayer acted with reasonable cause shall be made on a case by case basis taking…”
PepsiCo, Inc. v. Illinois Dep't of Revenue, 2025 IL App (1st) 230913-U (Ill. App. Ct. 2025). “” 35 ILCS 735/3-8 (West 2008). In this regard, the most important factor is “the extent to which the taxpayer made a good effort to determine the proper tax liability and to file returns and pay the proper liability in a timely fashion.”
Shared Imaging, LLC v. Hamer, 2017 IL App (1st) 152817 (Ill. App. Ct. 2017). “¶ 75 Pursuant to section 3-8 of the Uniform Penalty and Interest Act (35 ILCS 735/3-8 (West 2008)), penalties for the failure to file or pay taxes on or before their due date will not apply if the failure was due to “reasonable cause.”
Midwest Med. Equip. Solutions, Inc. v. Illinois Dep't of Revenue, 2023 IL App (1st) 221518-U (Ill. App. Ct. 2023). “” 35 ILCS 735/3-8 (West 2022). Reasonable cause is determined according to the Department’s rules and regulations on a case-by-case basis.”
TCRG SN4057, LLC v. Illinois Dep't of Revenue, 2024 IL App (1st) 231389-U (Ill. App. Ct. 2024). “” 35 ILCS 735/3-8 (West 2022). - 25 - No. 1-23-1389 ¶ 74 Pursuant to that provision, a Department regulation states that the “determination of whether a taxpayer acted with reasonable cause shall be made on a case by case basis taking into account all pertinent facts and…”
PepsiCo, Inc. v. Dep't of Revenue, 2025 IL App (1st) 230913 (Ill. App. Ct. 2025). “” 35 ILCS 735/3-8 (West 2010). In this regard, the most important factor is “the extent to which the taxpayer made a good faith effort to determine his proper tax liability and to file and pay his proper liability in a timely fashion.”
PepsiCo, Inc. v. Dep't of Revenue, 2026 IL App (4th) 250121 (Ill. App. Ct. 2026). “However, section 3-8 of that same act (35 ILCS 735/3-8 (West 2016)) provides that such penalties “shall not apply if the taxpayer shows that his failure to *** pay tax at the required time was due to reasonable cause.”
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