NOTICE: IC 4-22-7-7 permits the publication of this document in the Indiana Register. The publication of this document provides the general public with information about the Indiana Department of Revenue's official position concerning a specific set of facts and issues. The "Holding" section of this document is provided for the convenience of the reader and is not part of the analysis contained in this determination.

Business was not entitled to a refund because it failed to demonstrate that it timely filed the claim for refund.

I. Withholding Tax - Claim for Refund - Statute of Limitations.

Authority: IC 6-8.1-9-1; 45 IAC 15-9-2.

Taxpayer protests the refund denial concerning the tax it withheld and remitted in 2017.

Taxpayer is a company doing business in Indiana. Taxpayer employs Indiana residents to conduct its business. Taxpayer withholds tax on wages it paid to its employees and remits the withholding tax, as statutorily required, to the Indiana Department of Revenue ("Department").

In 2022, Taxpayer requested a refund of the tax it remitted to the Department during 2017. The Department reviewed and denied the request because the request was untimely.

Taxpayer protested the refund denial, stating the following:

Taxpayer elected the option of "Final determination without a hearing." This Final Order Denying Refund results.

I. Withholding Tax - Claim for Refund - Statute of Limitations.

In 2022, Taxpayer requested a refund of withholding tax, which it remitted in 2017. The Department denied Taxpayer's refund on the ground that the refund claim was not timely.

In general, if a taxpayer believes that it has overpaid the tax, the taxpayer is required to timely file a claim for a refund with the Department under IC 6-8.1-9-1. IC 6-8.1-9-1(a), in relevant part, states:

Thus, when a taxpayer determines it overpaid tax, for example in a situation like this, the taxpayer must file a refund request form stating the overpayment as prescribed by the Department to claim a refund within the three years of (1) the due date of the return or (2) the date of payment. IC 6-8.1-9-1(a); 45 IAC 15-9-2. The taxpayer also must clearly state "the amount of the refund," "detailed explanation of the basis of the claim such that the department may determine its correctness," "the tax period for which the overpayment is claimed," and "the year and date of the overpayment." 45 IAC 15-9-2(d).

In this instance, Taxpayer requested the refund of tax it withheld and remitted in 2017. Upon initial review of Taxpayer's filing, the Department denied Taxpayer's request. The Department explained, in part:

Taxpayer in this instance did not provide any verifiable documents to substantiate that its refund request was timely. Taxpayer believes that it was entitled to the refund because it requested the refund "as soon as it was known the overpayment [] existed." But Taxpayer did not reference any statutory authority to support its protest concerning the application of the three-year statute of limitations. Taxpayer merely asserted that it "is a small business and, unfortunately, has experienced some turnover of key accounting personnel over the last few years, and a change in payroll providers/systems, and was never made aware that this overpayment . . . ."

As noted above, the Department has "no legal method of generating a claim for refund." 45 IAC 15-9-2. As an agency in charge to enforce the Indiana law, the Department is bound by the statutory requirements under IC 6-8.1-9-1 and 45 IAC 15-9-2. Therefore, given the totality of the circumstances, in the absence of other verifiable supporting documents and legal authority, the Department must deny Taxpayer's refund claim because the claim was untimely.

Taxpayer's protest is respectfully denied.

May 19, 2023