ATTORNEY FOR PETITIONER: ATTORNEYS FOR RESPONDENTS:
ROBERT R. FAULKNER STEVE CARTER
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Evansville, IN Indianapolis, IN
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
JON K. FINK, )
v. ) Cause No. 82T10-0002-TA-29
INDIANA DEPARTMENT OF )
STATE REVENUE, )
STATE OF INDIANA, JOHN DOE 1, )
JOHN DOE 2, JOHN DOE 3, and )
JOHN DOE 4, )
ORDER ON PARTIES CROSS MOTIONS
FOR SUMMARY JUDGMENT
NOT FOR PUBLICATION
June 25, 2004
Jon K. Fink (Fink) appeals the final determination of the Indiana Department of
State Revenue (Department) which assessed him, as a corporate officer, with the unpaid
withholding, sales, and food and beverage tax liabilities of Sir Beef, Inc. (Sir
Beef) for the 1990 through 1994 tax years (years at issue). The
matter is currently before the Court on the parties cross motions for summary
judgment. While the parties raise numerous issues in their summary judgment motions,
the Court finds the following issue dispositive: whether the Department complied with
the notice provision in Indiana Code § 6-8.1-5-1 when it initially assessed Sir
FACTS AND PROCEDURAL HISTORY
Fink was president and sole shareholder of Sir Beef. From November 1990
through March 1995, the Department generated thirty-nine proposed assessment notices to Sir Beef
indicating amounts due for unpaid taxes. From May 1991 to April 1993,
the Department generated twelve returned check notices to Sir Beef. In 1994,
Sir Beef filed Chapter 7 bankruptcy and was subsequently dissolved.
On March 18, 1999, the Department, in order to collect Sir Beefs unpaid
tax liabilities, sent Fink proposed assessment notices and the returned check notices.
Fink subsequently protested the assessment; on November 22, 1999, the Department issued a
Letter of Findings denying Finks protest. On February 17, 2000, Fink originated
an original tax appeal. Fink filed a motion for partial summary judgment
on January 5, 2001. The Department filed its cross motion for summary
judgment on April 5, 2001. The Court conducted a hearing on the
parties motions on June 28, 2001. Additional facts will be supplied as
ANALYSIS AND OPINION
Standard of Review
This Court reviews the Departments final determinations de novo. Ind. Code Ann.
§ 6-8.1-5-1(h) (West 2003). Therefore, the Court is not bound by either
the evidence presented or the issues raised at the administrative level. Snyder
v. Indiana Dep't of State Revenue, 723 N.E.2d 487, 488 (Ind. Tax Ct.
2000), review denied.
In addition, a motion for summary judgment will be granted only when there
is no genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. Ind. Trial Rule 56(C).
Cross motions for summary judgment do not alter this standard. Snyder, 723
N.E.2d at 488.
Fink claims that the Departments attempt to collect Sir Beefs tax liabilities from
him violate his procedural due process rights because [b]y allowing the Department to
press decades old tax claims against parties i[t] alleges are responsible officers, [the
Department] destroys any meaningful opportunity to be heard notwithstanding what notice may or
may not have been afforded. (Petr Mot. for Summ. J., Designation of
Evidentiary Materials and Mem. of Law in Supp. of Mot. for Summ. J.
at 2.) The Department claims, however, that Finks due process rights have
not been violated because notice to the corporation satisfies the requirement of procedural
due process to the corporate officer. (Respts Br. in Oppn to Mot.
for Summ. J. and Cross Mot. for Summ. J. at 4.)
The Indiana Supreme Court has held that [a]n elementary and fundamental requirement of
due process in any proceeding which is to be accorded finality is notice[.]
Ball v. Indiana Dep't of State Revenue, 563 N.E.2d 522, 524 (Ind.
1990) (quoting Mullane v. Central Hanover Bank, 339 U.S. 306, 314-15 (1950)).
In turn, notice must be reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity
to present their objections. Id. Consequently, the Court explained that [w]here
the Department fully complies with I[ndiana Code §] 6-8.1-5-1 and provides [a] corporation
with notice of [a tax] assessment, personal notice to the responsible officer then
in charge is not required because
persons serving the corporation have direct and immediate control of the internal corporate
processes dealing with [funds held in trust. Therefore], it may be safely
assumed that they are aware of the responsible officer statute which is the
source of their potential personal liability and that they are aware of and
privy to corporate correspondence relating to their corporate duties including notices of assessment
sent to the corporation.
Ball, 563 N.E.2d at 524. Thus, notice to the corporation satisfies the
due process requirement of notice and opportunity to be heard in that it
is reasonably calculated to afford the responsible officer actual notice of the corporations
potential liability and his own potential liability. Id.
It follows, then, that if Sir Beef timely received notice of assessments from
See footnote Finks procedural due process rights of notice and the opportunity to
meaningfully respond are not jeopardized. Indeed, once Sir Beef received notice, it
had a meaningful opportunity to respond by either protesting the assessment or paying
the assessment and filing a claim for refund (per statute).
§ 6-8.1-5-1(c); Ind. Code Ann. § 6-8.1-9-1(a) (West 1995) (amended 2003). Because
Finks liability is derivative in nature, [o]nce the assessment against the corporation becomes
conclusive by the failure to present objections thereto the officer is bound by
the oscitancy of his corporation. Ball v. Indiana Dep't of State Revenue,
525 N.E.2d 356, 358 (Ind. Tax Ct. 1988) (internal citation and quotations omitted),
affd, 563 N.E.2d 522 (Ind.1990)). Consequently, the issue in determining whether Finks
due process rights have been violated turns on whether Sir Beef timely received
the proposed notice of assessments from the Department.
Fink asserts that the passage of time has destroyed [his] ability to establish
or refute whether [notice was provided to Sir Beef] and that the
designated evidence submitted by the [D]epartment does[ not] establish that the notices were
sent. (Petr Resp. in Oppn to Respts Cross Mot. for Summ. J.
at 3.) While the Department submitted copies of the proposed assessments and
returned check notices addressed to Sir Beef and dated between November 1990 and
March 1995, the accompanying certification only verifies that they are copies of notices
on file, it does not verify whether they were actually mailed. (
Respts Designation of Facts and Evid., Ex. B, Ex. C .)
Without knowing whether the Department actually mailed the notices,
See footnote the Court finds that
a genuine issue of material fact exists as to whether the Department timely
mailed assessment notices to Sir Beef.
Accordingly, because proof of timely mailing the proposed assessments to Sir Beef is
an evidentiary prerequisite to finding Fink liable for the unpaid tax liabilities,
See footnote the
parties motions for summary judgment are DENIED. The Court will schedule a
trial date on this matter in a separate order.
SO ORDERED this 25th day of June, 2004.
Thomas G. Fisher, Judge
Indiana Tax Court
Robert R. Faulkner
Attorney at Law
400 Court Street
P.O. Box 4208
Evansville, IN 47724
Attorney General of Indiana
By: John Snethen
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, Indiana 46204-2770
Indiana Code § 6-8.1-5-1 provides that [i]f the department reasonably believes that
a person has not reported the proper amount of tax due, the department
shall make a proposed assessment of the amount of the unpaid tax[.] .
The department shall send the person a notice of the proposed
assessment through the United States mail. Ind. Code Ann. § 6-8.1-5-1(a) (West
1995) (emphasis added).
[T]he department may not issue a proposed assessment . . . more
than (3) three years after the latest of the date the return is
filed . . . or the due date of the return; or 
in the case of a return filed for the state gross retail or
use tax . . . the end of the calendar year which contains
the taxable period for which the return is filed.
Ind. Code Ann.
§ 6-8.1-5-2(a) (West 1995) (amended 2002, eff. 1-1-03). If a person files
a fraudulent, unsigned, or substantially blank return, or if a person does not
file a return, there is no time limit within which the department must
issue its proposed assessment. A.I.C. § 6-8.1-5-2(d).
If Sir Beef did not timely receive the Departments notices, the Departments
actions against Fink may be barred.
See A. I. C. § 6-8.1-5-2(a).
The Departments Records Custodian certified that the attached records are, in fact,
certified copies of documents or information on file with the [Department]. (Respts
Designation of Facts and Evid., Ex. B at 1, Ex. C at 1.)
If the Department establishes that the notices were timely mailed to Sir
Beef, Sir Beef is presumed to have received them.
Carter v. Review
Bd. of Indiana Dept of Employment & Training Servs., 526 N.E.2d 717, 718-19
(Ind. Ct. App. 1988) (stating that where an administrative agency sends notice through
the regular course of mail, a presumption (rebuttable) arises that such notice is
received), review denied.
Proof of timely mailing will also resolve an alternative claim raised by
Fink: that the Departments attempt to collect the unpaid tax amounts from
him is barred by the doctrine of laches. Laches is an equitable
defense to stop another person from asserting a claim he would normally be
entitled to assert.
Storm, Inc. v. Indiana Dep't of State Revenue, 663
N.E.2d 552, 557 (Ind. Tax Ct. 1996). Because laches involves delay in
bringing a case, not delay in resolving a case[,] see id. (footnote omitted),
if the Department timely mailed notices to Sir Beef its actions against Fink
would not be barred by laches because it timely asserted its claim against
Sir Beef. See A.I.C. § 6-8.1-5-2(a).