PETITIONER APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
CLIFFORD R. EIBECK STEVE CARTER
West Harrison, IN ATTORNEY GENERAL OF INDIANA
TED J. HOLADAY
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
CLIFFORD R. EIBECK, )
v. ) Cause No. 49T10-0210-TA-126
INDIANA DEPARTMENT OF )
STATE REVENUE, )
ON APPEAL FROM A FINAL DETERMINATION OF
THE INDIANA DEPARTMENT OF STATE REVENUE
December 5, 2003
Clifford R. Eibeck (Eibeck) appeals the final determination of the Indiana Department of
State Revenue (Department) which assessed a tax on his personal income for the
2000 tax year. The issue for the Court to decide is whether
Eibecks pension income is subject to Indianas adjusted gross income tax under Indiana
Code § 6-3-1-1 et seq. For the following reasons, the Court AFFIRMS
the Departments final determination.
FACTS AND PROCEDURAL HISTORY
Eibeck, an Indiana resident, filed an individual state income tax return for the
2000 tax year. On his return, Eibeck declared zero income. The
Department subsequently assessed Eibeck for unpaid taxes on pension income he received in
See footnote Eibeck protested the assessment, and the Department conducted an administrative hearing
on July 25, 2002. On August 8, 2002, the Department issued a
Letter of Findings denying Eibecks protest.
On October 25, 2002, Eibeck initiated an original tax appeal. This Court
heard the parties oral arguments on July 11, 2003. Additional facts will
be supplied as necessary.
ANALYSIS AND OPINION
Standard of Review
This Court reviews the Departments final determinations de novo and is therefore 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.
Eibeck contends that the Department erroneously taxed the pension income he received in
2000. More specifically, Eibeck claims that Title 26 of the United States
Code (Title 26)
See footnote is not law. To support his argument, he submitted
various articles obtained via the internet.See footnote Eibeck also emphasizes that Title 26
has not been enacted into positive law. Accordingly, he argues Indianas taxation
scheme is not law and thus, his pension income has been erroneously taxed.See footnote
As this Court has explained:
[The fact that] Title 26 is not positive law simply means one must
go to the appropriate volume of the
United States Statutes at Large to
be certain of the content of any given statute codified within Title 26.
The statutes in the volumes of the United States Code, the United
States Code Service, and the United States Code Annotated are meant to contain
the same language as the United States Statutes at Large, but unless Congress
takes affirmative steps, the language in the various Codes is only prima facie
evidence of the law.
Richey v. Indiana Dep't of State Revenue, 634 N.E.2d 1375, 1377 (Ind. Tax.
Ct. 1994) (emphases in original). Because Title 26 is not positive law
does not mean that Indianas tax laws are unenforceable. Rather, the distinction
between positive and nonpositive law simply means that Congress has not reenacted the
valid public laws contained in the United States Statutes at Large, which were
then codified in the United States Code under Title 26, into law in
the codified form.
See J. Myron Jacobstein, et al. Legal Research Illustrated
150-59 (6th ed. 1994) (discussing enactment, codification, and publication of federal laws).
At any rate, under the Indiana Constitution, [t]he general assembly may levy and
collect a tax upon income, from whatever source derived, at such rates, in
such manner, and with such exemptions as may be prescribed by law.
Ind. Const. art. X, § 8. As this Court has previously stated,
[t]he constitutional legitimacy of the general assemblys decision to tax income is beyond
dispute. The right to tax is a crucial attribute of sovereignty.
Snyder, 723 N.E.2d at 488 (quoting Richey v. Indiana Dep't of State Revenue,
634 N.E.2d 1375, 1376 (Ind. Tax. Ct. 1994) (citing MCulloch v. Maryland, 17
U.S. (4 Wheat.) 316, 428, 4 L.Ed. 579 (1819))). Under its authority,
the Indiana General Assembly enacted the Adjusted Gross Income Tax Act of 1963
(the Act). See Ind. Code § 6-3-1-1 et seq.
The Act defines adjusted gross income, in the case of individuals, as the
term is defined in Section 62 of the Internal Revenue Code (26 U.S.C.
§ 62) with certain modifications. See Ind. Code § 6-3-1-3.5. Thus,
adjusted gross income is, in the case of an individual, gross income minus
. . . [certain] deductions[.] 26 U.S.C. § 62. Similarly, the
Act incorporates the definition of gross income as found in Section 61(a) of
the Internal Revenue Code. See Ind. Code § 6-3-1-8. Therefore, gross
income is all income from whatever source derived, including (but not limited to)
. . . pensions. 26 U.S.C. § 61(a)(11).
The foremost goal of statutory construction is to determine and give effect to
the true intent of the legislature. Caylor-Nickel Clinic, P.C. v. Indiana Dep't
of State Revenue, 569 N.E.2d 765, 768 (Ind. Tax. Ct. 1991) (citations omitted),
affd, 587 N.E.2d 1311 (Ind. 1992). To determine the legislatures intent, the
words of a statute must be read in their plain, ordinary, and usual
sense. Id. Both the Indiana Code and United States Code clearly
define adjusted gross income as a taxpayers gross income minus certain deductions.
See Ind. Code § 6-3-1-3.5; 26 U.S.C. § 62. Pensions are unambiguously
included within the definition of gross income. See Ind. Code § 6-3-1-8; 26
U.S.C. § 61(a)(11). Consequently, Eibecks pension income was subject to Indianas adjusted
gross income tax.
For the reasons stated above, the Court AFFIRMS the Departments final determination.
Footnote: Eibeck claimed zero federal and state taxable income; yet, Eibecks Form 1099-R
for 2000 indicates he received $11,965.85 of taxable pension income. (Respt Ex.
A at 4, 6, 8.) The Department assessed a tax liability on
that pension income in the amount of $532.01 including penalties and interest.
(Respt Ex. C at 3.)
Footnote: Title 26 of the United States Code (the Internal Revenue Code) codifies
federal law governing taxation.
Footnote: Eibeck submitted articles titled Internal Revenue Code is not Law and Income
Tax History and Purpose of the Amendment without documenting the source other
than stating he found them conducting a google search. It appears that
neither article originated from an official taxing authority such as the Internal Revenue
Service. (Petr Exs. 3 & 5.)
Footnote: Eibeck refers to the preface of the United States Code which States:
Titles of the United States Code which have been enacted into positive law
are legal evidence of the general and permanent laws, while nonpositive law titles
only establish prima facie the laws of the United States (1 USCS §
See Petr Ex. 8.)
Eibeck does not contend that the language contained in the codified version
of Title 26 is inconsistent with language found in the
United States Statutes
Interestingly, Eibeck asserts that because he claimed zero income on his federal
tax return and received a federal tax refund, he was required to claim
zero income on his state return because Indianas individual income tax form (IT-40)
instructs taxpayers to enter their federal adjusted gross income from their federal returns
on the state form. (
See, e.g., Respt Ex. A at 4.)
However, it must be remembered that tax forms are used merely as an
aid for taxpayers in calculating their taxable income in accordance with the income
tax laws. Therefore, calculating Indianas adjusted gross income begins with federal taxable
income as defined by Section 61(a) of the United States Code, not as
what a taxpayer reports on its federal tax form. See Cooper Indus.,
Inc. v. Indiana Dep't of State Revenue, 673 N.E.2d 1209, 1213 (Ind. Tax