DEPARTMENT OF STATE REVENUE
01-20090543P.LOF
Letter of Findings Number: 09-0543P
Individual Income Tax – Penalty and Interest
For the Period 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 It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register.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 this document will provide the general public with information about the Department's official position concerning a specific issue.
ISSUES
I. Tax Administration–Estimated Tax Penalty.
Authority: IC § 6-3-4-4.1.
Taxpayer protests the imposition of a proposed penalty assessment.
II. Tax Administration–Interest.
Authority: IC § 6-8.1-10-1.
Taxpayer protests the imposition of interest on a proposed assessment.
STATEMENT OF FACTS
Taxpayer is an individual. The Indiana Department of Revenue ("Department") issued a proposed assessment of use tax for 2005 and interest for tangible personal property upon which Taxpayer had not paid sales tax at the time of purchase. Taxpayer protested the interest.
Taxpayer separately protested a penalty assessment. Based on Taxpayer's correspondence, Taxpayer apparently protested what he thought was a penalty on the use tax. However, the penalty was for failure to make sufficient estimated tax payments during 2005.
The Department sent a letter to Taxpayer stating that Taxpayer could request a hearing by replying to the letter within twenty (20) days of the date of the letter. Taxpayer did not reply to the Department's letter. Due to Taxpayer's failure to reply, this Letter of Findings is written based on the information in Taxpayer's protest file and other Department records relating to Taxpayer.
I. Tax Administration–Estimated Tax Penalty.
DISCUSSION
Taxpayer protests the imposition of a penalty. Based on Taxpayer's correspondence, Taxpayer apparently protested what he thought was a penalty on the use tax. After further review of the file, the penalty was for failure to make sufficient estimated tax payments during 2005.
IC § 6-3-4-4.1 imposes a penalty for failure to pay estimated taxes during a taxable year. The imposition of the penalty against Taxpayer was proper. However, Taxpayer paid the penalty in 2006 with his original income tax return. Thus, the penalty assessed in 2009 was improper.
FINDING
Taxpayer's protest is sustained with respect to the penalty assessment issued in 2009.
II. Tax Administration–Interest.
DISCUSSION
Taxpayer also protests the imposition of interest on the use tax imposed as a result of the Department's audit. With regard to interest, IC § 6-8.1-10-1(e) provides that the Department cannot waive interest. Thus, Taxpayer's protest of the interest assessed is denied.
FINDING
Taxpayer's protest is denied.
CONCLUSION
Taxpayer's protest is sustained with respect to the proposed penalty assessment issued in 2009. Taxpayer's interest protest is denied.
Posted: 11/25/2009 by Legislative Services Agency
DIN: 20091125-IR-045090880NRA
Composed: May 04,2024 6:05:51AM EDT
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