DEPARTMENT OF STATE REVENUE
03-20080571P.LOF
Letter of Findings: 08-0571P
Withholding Tax
For the Tax Year Ending December 31, 2005
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 It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register.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 the document will provide the general public with information about the Department's official position concerning a specific issue.
ISSUE
I. Withholding Tax - Twenty-Percent Penalty.
Authority: IC § 6-8.1-5-1; IC § 6-8.1-10-2.1.
The taxpayer seeks a reduction of the twenty-percent penalty for failure to file Form WH-1s and remit withholding tax on its non-resident shareholders.
STATEMENT OF FACTS
The taxpayer is an S corporation. The taxpayer failed to file Form WH-1s and withhold tax on its non-resident shareholders for the year ending December 31, 2005. The taxpayer was assessed a twenty-percent penalty pursuant to IC § 6-8.1-10-2.1(h). Taxpayer protests that the penalty was based on an erroneous amount of tax.
I. Withholding Tax - Twenty-Percent Penalty.
DISCUSSION
The taxpayer argues that it is entitled to a partial abatement of the twenty-percent penalty for failure to file Form WH-1 and remit withholding tax on its non-resident shareholders. In particular, Taxpayer argues that its Indiana income was less than half the amount upon which the Department based its penalty assessment.
Under IC § 6-8.1-5-1(b) (now (c)), "The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made." An assessment – including the penalty – is presumptively valid.
The taxpayer has provided sufficient information to conclude that its 2005 Indiana-source income was $313,470, and therefore the penalty should have been $2,132.
FINDING
The taxpayer's protest is sustained. The penalty is reduced to $2,132.
Posted: 12/17/2008 by Legislative Services Agency
DIN: 20081217-IR-045080916NRA
Composed: May 05,2024 9:56:19PM EDT
A
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