The Illinois Retail Merchants Association said Monday that it had obtained emails showing that municipal officials illegally shared local businesses tax information with an outside company that makes money auditing businesses on behalf of local governments.
Illinois Retail Merchants Association President and CEO Rob Karr read off emails the association acquired from local officials that shared tax information from local businesses with Chicago-based auditing firm Azavar. In a series of FOIA requests, Karr’s organization found officials from Elgin, Lockport, Homer Glen and Rockford being solicited by Azavar to participate in potentially illegal sharing of local businesses sales tax data to allow Azavar to do audits to potentially recover sales tax revenue a business would owe the local government.
“Sharing this information is outside of the law,” Karr said. “We wouldn’t do this to our individual taxpayers. Why would we do this to our businesses?”
In the emails, city officials were instructed by Azavar employees to turn over documents to the firm via a compact disc.
“Please do not copy us on the email, as we are still working with IDOR to be able to contact them directly on behalf of our clients,” Azavar Vice President Scott Shamberg wrote in an email to Lockport Finance Director Erik Brown.
Azavar President Jason Perry refused to comment on the emails.
Business tax information is generally regarded as confidential and municipal officials often go to lengths to make sure it is kept secret. Sharing such information could be costly for the local officials. According to the Illinois Department of Revenue, releasing information shared with the local officials via their reciprocal agreement on exchange of information is punishable with up to a $7,500 fine.
IDOR warned Rockford's mayor in 2015 about the practice after an Azavar official requested some local business tax information from IDOR on the city's behalf.
A pending bill would allow businesses to share business tax information legally with firms like Azavar. State Rep. Chris Welch, D-Westchester, said via Twitter on Monday that he would fight for his bill’s passage.
“Business groups in Springfield have hired some powerful lobbyists to stop several of my bills that help local municipalities and working families across Illinois,” he said.
The bill, similar to a version that failed to make it out of the state Senate in 2016, sets up another battle between lawmakers who want to help shore up local government budgets and others concerned that the sensitive information can be used against local businesses.
“This bill would expose their private tax information to a third party that is incentivized to find new tax liabilities,” said Mark Grant, president of the National Federation of Independent Business’ Illinois chapter.