INDIANA TAX COURT
IRWIN MORTGAGE CORPORATION, f/k/a )
INLAND MORTGAGE CORPORATION, )
v. ) Cause No. 49T10-0203-TA-29
INDIANA BOARD OF TAX REVIEW, )
MARION COUNTY TREASURER, )
MARION COUNTY AUDITOR, )
MARION COUNTY BOARD OF REVIEW AND )
WASHINGTON TOWNSHIP ASSESSOR, )
ORDER ON MOTIONS TO DISMISS AND JUDGMENT ENTRY
September 30, 2002
Irwin Mortgage Corporation (Irwin) appeals the Indiana Board of Tax Reviews (Indiana Board)
final determination that it did not have the authority to decide whether Irwin
owed a penalty for the late payment of an installment of property taxes
that were due on May 12, 1997 or whether the statute that sets
forth the penalty is constitutional. The Indiana Board and County Treasurer, the
Marion County Auditor, and the Marion County Property Tax Assessment Board of Appeals
(collectively Local Officials) have filed motions to dismiss Irwins appeal. The Court
restates the issue in this case as whether Irwins claims are properly before
For the reasons stated below, the Court GRANTS the Indiana Boards and the
Local Officials motions to dismiss.
FACTS AND PROCEDURAL HISTORY
Irwin is a mortgage company that maintains escrow accounts on behalf of its
customers for property tax payments. On May 12, 1997, a property tax
installment was due to be paid to the County Treasurers office. Irwin
prepared the tax payment checks to be given to UPS on May 12,
1997 for delivery to the County Treasurer, but the checks never made it
to UPS because the Irwin employee responsible for making the payments was absent
from work on May 12. On May 13, Irwin hand delivered the
tax payment to the County Treasurers office. At that point, the County
Treasurers office advised Irwin that the personal delivery of the payment on May
13 was considered delinquent. As a result of the delinquent payment, the
County Treasurers office imposed a penalty of 10% of the delinquent tax payment
on Irwin pursuant to Indiana Code Section 6-1.1-37-10. Irwin paid the 10%
On January 5, 1998, Irwin filed a claim for refund with the Marion
County Auditor seeking a refund of the penalty pursuant to Indiana Code Section
6-1.1-26-1. The Auditor denied the claim for refund.
On January 27, 1998, Irwin appealed to the State Board of Tax Commissioners
(State Board) via a 131 Petition for Review. The State Board held
a hearing. On January 28, 2002, the Indiana BoardSee footnote issued its final
determination stating that it did not have the authority to decide whether the
Treasurer properly imposed the penalty on Irwin.
On March 12, 2002, Irwin filed its original tax appeal with this Court.
On May 13, 2002, the Indiana Board filed a motion to dismiss
Irwins appeal pursuant to Indiana Trial Rule 12(B)(6) for failure to state a
claim upon which relief may be granted. On May 31, 2002, the
Local Officials also filed a motion to dismiss pursuant to Indiana Trial Rule
12(B)(6). On June 26, 2002, the Court held a hearing on
the motions to dismiss. Additional facts will be provided as necessary.
ANALYSIS AND OPINION
Standard of Review
This Court will give final determinations of the Indiana Board great deference when
the Indiana Board acts within the scope of its authority. See Freudenberg-NOK
General Partnership v. State Bd. of Tax Commrs, 715 N.E.2d 1026, 1028-29 (Ind.
Tax Ct. 1999)(setting forth standard of review in State Board cases), review denied.
Accordingly, this Court reverses final determinations of the Indiana Board only when
they are unsupported by substantial or reliable evidence, are arbitrary, capricious, or constitute
an abuse of discretion, are unconstitutional, do not follow proper legal procedure, or
exceed statutory authority. Ind. Code § 33-3-5-14.8(e). The burden of showing
that the Indiana Boards action was invalid is on the party asserting the
invalidity. Ind. Code § 33-3-5-14.8(b).
The Court first looks to whether the Indiana Board was statutorily empowered to
determine whether the County properly assessed Irwin a ten percent penalty
See footnote for the
late payment of the property tax installment. The Indiana Board stated in
its final determination that it did not have the statutory power to decide
whether the penalty was properly imposed on Irwin. Therefore, the Indiana Board
and Local Officials now argue that this case should be dismissed pursuant to
Indiana Trial Rule 12(B)(6), for failure to state a claim upon which relief
can be granted.
A motion made pursuant to Trial Rule 12(B)(6) tests the legal sufficiency of
Musgrave v. State Bd. of Tax Commrs, 658 N.E.2d 135,
140 (Ind. Tax Ct. 1995). The Court will grant a Trial Rule
12(B)(6) motion only if it appears that the petitioner is not entitled to
relief under any circumstances. Id.
As stated in Whetzel v. Department of Local Government Finance, the State Board
was a creation of the Legislature and therefore only had those powers conferred
by statute. Whetzel v. Dept of Local Govt Finance, 761 N.E.2d 904,
908 (Ind. Tax Ct. 2002). The Indiana Board, as the successor to
the State Board, was also created by the legislature and is also limited
to statutorily enumerated powers. In statutory construction, it is just as important
to recognize what the statute does not say as it is to recognize
what it does say. City of Evansville v. Zirkelbach, 662 N.E.2d 651,
654 (Ind. Ct. App. 1996), trans. denied. Consequently, the Indiana Board could
only decide whether Irwin owed the penalty if it was statutorily empowered to
make such a decision. The Indiana Board is empowered to review appeals
(1) the assessed valuation of tangible property;
(2) property tax deductions;
(3) property tax exemptions; or
(4) property tax credits;
that are made from a determination by an assessing official or a county
property tax assessment board of appeals to the Indiana board under any law.
Ind. Code § 6-1.5-4-1(a) (West 2001).
This Court decided this same issue in Whetzel, although that case involved the
State Board. Whetzel, 761 N.E.2d at 908. Similar to Whetzel, here
the statute grants power to the Indiana Board to review only appeals concerning
matters enumerated therein. The statute does not grant any power to the
Indiana Board to review penalties imposed by the County Treasurer for the late
payment of property taxes. Consequently, the Indiana Board did not have the
authority to decide Irwins appeal of the penalty imposed for late payment of
the property tax installment.
Irwin asserts that the Courts holding in Whetzel can be distinguished from this
case because Whetzel did not deal with the constitutionality of Indiana Code Section
6-1.1-37-10. Irwin points out that in Whetzel, the taxpayer only challenged whether
the penalty imposed was illegal. See Whetzel, 761 N.E.2d at 906.
In the present case, Irwin challenges both the propriety of the County Treasurers
imposition of the penalty and the constitutionality of the statute before the Indiana
Board. However, the Court notes that with the exception of the constitutionality
issue, Irwins case is four square with Whetzel. Therefore, Whetzel controls, and
the Indiana Board properly decided that it was without authority to review the
propriety of the County Treasurers late penalty.
Irwin attempts to save its case from dismissal, arguing that its case is
properly before this Court because Indiana Code Section 6-1.1-37-10 is unconstitutional
See footnote and only
this Court can decide the constitutionality of a tax statute. Irwin contends
State v. Sproles supports its proposition because there the Indiana Supreme Court
held that challenges to the tax law lie within the exclusive jurisdiction of
the Tax Court. State v. Sproles, 672 N.E.2d 1353, 1356 (Ind. 1996).
Irwins reliance on Sproles in this case is misplaced. Whether the
Indiana Board or any other administrative agency has the authority to review the
constitutionality of a statute should not be reached until the agency has determined
whether it has jurisdiction over an appeal brought under the statute alleged to
See footnote Here, the Indiana Board did not have any authority to
decide anything regarding the appropriateness of a penalty for late payment of taxes
and consequently neither does this Court. Therefore, Irwins constitutional claim is not
properly before this Court. Accordingly, the Court GRANTS the Indiana Boards and
Local Officials motions to dismiss.
Irwins remedy in Court, if any, lies with the Marion County courts of
general jurisdiction and not the Tax Court.See footnote For the foregoing reasons, Court
GRANTS the Indiana Boards and Local Officials motions to dismiss because the Indiana
Board did not have the authority to decide whether the County Treasurer properly
assessed Irwin with a penalty for late payment of the property tax installment
and because Irwins constitutional challenge is not properly before this Court.
Thomas G. Fisher, Judge
Indiana Tax Court
Mary Titsworth Chandler
Maureen S. Ward
WOODEN & MCLAUGHLIN
1600 Capital Center South
201 North Illinois Street
Indianapolis, IN 46204
Attorney General of Indiana
By: Robert Wente
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
Andrew P. Seiwert
ASSISTANT CORPORATION COUNSEL
200 East Washington Street, Suite 1601
Indianapolis, IN 46204
The Local Officials asserted as an affirmative defense that this Court
lacked subject matter jurisdiction to decide the narrow issue of whether the Indiana
Board had the
authority to decide whether the taxpayer owed the penalty.
However, at the hearing, this Court noted that it has already decided that
it has jurisdiction over such a case. See Whetzel v. Dept of
Local Govt Fin., 761 N.E.2d 904, 907 (Ind. Tax Ct. 2002)(holding the Tax
Court has subject matter jurisdiction to decide the narrow issue of whether the
State Board had the authority to decide whether the taxpayer owed the same
penalty). This Court notes that it does not have jurisdiction to decide the
issue of whether the County Treasurer properly imposed the late penalty because the
Indiana Board did not make a final determination with regard to that issue.
See id. at 907 n.3; Ind. Code § 33-3-5-2(a)(2).
The legislature abolished the State Board as of December 31, 2001.
P.L. 198-2001, § 119(b)(2). Effective January 1, 2002, the legislature created
the Department of Local Government Finance (DLGF),
Ind. Code § 6-1.1-30-1.1 (West Supp.
2001)(eff. 1-1-02); P.L. 198-2001, § 66, and the Indiana Board of Tax Review
(Indiana Board). Ind. Code § 6-1.5-1-3 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001,
Indiana Code Section 6-1.1-37-10(a) provides in relevant part: If an installment
of property taxes is not completely paid on or before the due date,
a penalty equal to ten percent (10%) of the amount of delinquent taxes
shall be added to the unpaid portion in the year of the initial
Ind. Code § 6-1.1-37-10(a).
Irwin asserts that Indiana Code Section 6-1.1-37-10 violates Article I Section
16 of the Indiana Constitution and the Eighth and Fourteenth amendments to the
United States Constitution.
Footnote: The outcome of this case might have been different if Irwin would
have been claiming that a statute regarding an assessment were unconstitutional and the
Indiana Board would have determined that it did not have jurisdiction because it
did not have authority to decide whether a statute is unconstitutional. Then,
an appeal to the Tax Court would be proper because the Indiana Board
had the authority to decide the non-constitutional issue under the allegedly defective statute.
Footnote: The prosecuting attorneys of this state are specifically charged with the
duty of enforcing the penalty under Indiana Code Section 6-1.1-37-10.
§ 6-1.1-37-13(providing that the prosecuting attorneys of this state shall enforce the penalties
prescribed in Chapter 37 of Article 1.1 of Title 6 of the Indiana
Code). Cf. Ind. Code § 6-1.1-30-14 (providing that the State Board is
generally charged with enforcing penalties under Article 1.1 of Title 6 of the
The Supreme Court has directed the taxpayer to file its case in a
court of general jurisdiction naming the county officials as the defendant in cases
where this Court lacked jurisdiction to decide a case because there was no
final determination by the State Board. See, e.g., State Bd. of Tax Commrs
v. L.H. Carbide Corp., 702 N.E.2d 706, 706-07 (Ind. 1998) (holding that taxpayer
may bring mandamus action in court of general jurisdiction against county officials where
Tax Court did not have jurisdiction because State Board did not make a
final determination because that County Board of Review never acted on or forwarded
the Form 133 Petition for Correction of Errors to the State Board); State
Bd. of Tax Commrs v. Mixmill Mfg., 702 N.E.2d 701, 704-05, 706 (Ind.
1998) (holding that taxpayer may bring mandamus action in court of general jurisdiction
against county officials where the Tax Court did not have jurisdiction because State
Board did not make a final determination because that County Board of Review
never acted on or forwarded the Form 131 Petition for Review of Assessment
to the State Board); cf. Indiana Dept of Revenue v. Deaton, 755 N.E.2d
568, 571-72 (Ind. 2001) (holding that the Department may collect a tax judgment
lien by filing a proceeding supplemental in a court of general jurisdiction).