DEPARTMENT OF STATE REVENUE
0420060153P.LOF
Letter of Findings Number: 06-0153P
Sales Tax
For the Years 2002-2004
NOTICE: Under
IC 4-22-7-7, this document is required to be published in the Indiana Register and is effective on its date of publication. It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register. The publication of this document will provide the general public with information about the Department's official position concerning a specific issue.
ISSUE
I. Tax Administration - Ten Percent Negligence Penalty
The taxpayer protests the imposition of the ten percent negligence penalty.
STATEMENT OF FACTS
The taxpayer is in the business of providing water services. After an audit, the Indiana Department of Revenue, hereinafter referred to as the "department," assessed additional sales tax, interest, and penalty for the tax period 2002-2004. The taxpayer protested the imposition of the ten percent negligence penalty. The taxpayer was given ample opportunity to schedule a hearing on the protest and/or submit additional information. Since the taxpayer did neither, this Letter of Findings is based on the information in the file.
I. Tax Administration - Ten Percent Negligence Penalty
DISCUSSION
The taxpayer protests the imposition of the ten percent negligence penalty pursuant to IC § 6-8.1-10-2.1. Indiana Regulation
45 IAC 15-11-2(b) clarifies the standard for the imposition of the negligence penalty as follows:
Negligence, on behalf of a taxpayer is defined as the failure to use such reasonable care, caution, or diligence as would be expected of an ordinary reasonable taxpayer. Negligence would result from a taxpayer's carelessness, thoughtlessness, disregard or inattention to duties placed upon the taxpayer by the Indiana Code or department regulations. Ignorance of the listed tax laws, rules and/or regulations is treated as negligence. Further, failure to read and follow instructions provided by the department is treated as negligence. Negligence shall be determined on a case by case basis according to the facts and circumstances of each taxpayer.
During the period of the audit, the taxpayer ignored the law and departmental instructions for the payment of Indiana sales taxes. The taxpayer did not maintain adequate documentation on its exempt customers. Also, it did not report and remit the sales taxes paid by a major commercial customer. These breaches of the taxpayer's duty constitute negligence.
FINDING
The taxpayer's protest is denied.
Posted: 08/30/2006 by Legislative Services Agency
DIN: 20060830-IR-045060311NRA
Composed: May 04,2024 9:18:41AM EDT
A
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