DEPARTMENT OF STATE REVENUE
04-20060256.LOF
Letter of Findings Number 06-0256
Responsible Officer
Sales and Withholding Tax
For Tax Period 1998-2004
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 It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register.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 specific issues.
ISSUE
I. Sales and Withholding Tax -Responsible Officer Liability
Authority: IC § 6-2.5-9-3; IC § 6-3-4-8(g); IC § 6-8.1-5-1(b).
The taxpayer protests the assessment of corporate sales and withholding taxes against him as a responsible officer.
STATEMENT OF FACTS
The taxpayer was associated with a corporation that did not remit the proper amount of sales and withholding taxes to Indiana for the tax period December, 1998 through November, 2004. The Indiana Department of Revenue assessed the outstanding corporate withholding taxes, sales taxes, interest, and penalty against the taxpayer personally. The taxpayer protested the assessment and a requested that a decision be based on the documentation in the file. This Letter of Findings results.
I. Sales and Withholding Tax -Responsible Officer Liability
DISCUSSION
The proposed sales tax liability was issued under authority of IC § 6-2.5-9-3 that provides as follows:
An individual who:
(1) is an individual retail merchant or is an employee, officer, or member of a corporate or partnership retail merchant; and
(2) has a duty to remit state gross retail or use taxes to the department;
holds those taxes in trust for the state and is personally liable for the payment of those taxes, plus any penalties and interest attributable to those taxes, to the state.
The proposed withholding taxes were assessed against the taxpayer pursuant to IC §6-3-4-8(g), which provides that "In the case of a corporate or partnership employer, every officer, employee, or member of such employer, who, as such officer, employee, or member is under a duty to deduct and remit such taxes shall be personally liable for such taxes, penalties, and interest."
Indiana Department of Revenue assessments are prima facie evidence that the tax assessment is correct. The taxpayer bears the burden of proving that the assessment is incorrect. IC § 6-8.1-5-1(b).
The taxpayer admitted that originally he was one of the persons responsible for the payment of corporate trust taxes to Indiana. He argued, however, that he severed his connection with the corporation in 1994 and was not responsible for the payment of trust taxes after that time. He provided substantial documentation indicating that he was not responsible for the payment of corporate trust taxes during the tax period December, 1998 through November, 2004.
FINDING
The taxpayer's protest is sustained.
Posted: 11/29/2006 by Legislative Services Agency
DIN: 20061129-IR-045060527NRA
Composed: Apr 28,2024 11:39:14AM EDT
A
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