Evansville, IN    Indianapolis, IN
    Indianapolis, IN

JON K. FINK,                                                           )
    Petitioner,                                                             )
    v.                                                                      )   Cause No. 82T10-0002-TA-29
INDIANA DEPARTMENT OF                                                       ) 
STATE REVENUE,                                                              )
STATE OF INDIANA, JOHN DOE 1,                                               )
JOHN DOE 2, JOHN DOE 3, and                                                 )
JOHN DOE 4,                                                                 )
    Respondents.                                                            )    


June 25, 2004

    Jon K. Fink (Fink) appeals the final determination of the Indiana Department of State Revenue (Department) which assessed him, as a corporate officer, with the unpaid withholding, sales, and food and beverage tax liabilities of Sir Beef, Inc. (Sir Beef) for the 1990 through 1994 tax years (years at issue). The matter is currently before the Court on the parties’ cross motions for summary judgment. While the parties raise numerous issues in their summary judgment motions, the Court finds the following issue dispositive: whether the Department complied with the notice provision in Indiana Code § 6-8.1-5-1 when it initially assessed Sir Beef. See footnote

    Fink was president and sole shareholder of Sir Beef. From November 1990 through March 1995, the Department generated thirty-nine proposed assessment notices to Sir Beef indicating amounts due for unpaid taxes. From May 1991 to April 1993, the Department generated twelve returned check notices to Sir Beef. In 1994, Sir Beef filed Chapter 7 bankruptcy and was subsequently dissolved.
On March 18, 1999, the Department, in order to collect Sir Beef’s unpaid tax liabilities, sent Fink proposed assessment notices and the returned check notices. Fink subsequently protested the assessment; on November 22, 1999, the Department issued a Letter of Findings denying Fink’s protest. On February 17, 2000, Fink originated an original tax appeal. Fink filed a motion for partial summary judgment on January 5, 2001. The Department filed its cross motion for summary judgment on April 5, 2001. The Court conducted a hearing on the parties’ motions on June 28, 2001. Additional facts will be supplied as necessary.

Standard of Review

This Court reviews the Department’s final determinations de novo. Ind. Code Ann. § 6-8.1-5-1(h) (West 2003). Therefore, the Court is not bound by either the evidence presented or the issues raised at the administrative level. Snyder v. Indiana Dep't of State Revenue, 723 N.E.2d 487, 488 (Ind. Tax Ct. 2000), review denied.
In addition, a motion for summary judgment will be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). Cross motions for summary judgment do not alter this standard. Snyder, 723 N.E.2d at 488.

Fink claims that the Department’s attempt to collect Sir Beef’s tax liabilities from him violate his procedural due process rights because “[b]y allowing the Department to press decades old tax claims against parties i[t] alleges are responsible officers, [the Department] destroys any meaningful opportunity to be heard notwithstanding what notice may or may not have been afforded.” (Pet’r Mot. for Summ. J., Designation of Evidentiary Materials and Mem. of Law in Supp. of Mot. for Summ. J. at 2.) The Department claims, however, that Fink’s due process rights have not been violated because “notice to the corporation satisfies the requirement of procedural due process to the corporate officer.” (Respts’ Br. in Opp’n to Mot. for Summ. J. and Cross Mot. for Summ. J. at 4.)
The Indiana Supreme Court has held that “[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice[.]” Ball v. Indiana Dep't of State Revenue, 563 N.E.2d 522, 524 (Ind. 1990) (quoting Mullane v. Central Hanover Bank, 339 U.S. 306, 314-15 (1950)). In turn, notice must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Id. Consequently, the Court explained that “[w]here the Department fully complies with I[ndiana Code §] 6-8.1-5-1 and provides [a] corporation with notice of [a tax] assessment, personal notice to the responsible officer then in charge is not required because
persons serving the corporation have direct and immediate control of the internal corporate processes dealing with [funds held in trust. Therefore], it may be safely assumed that they are aware of the responsible officer statute which is the source of their potential personal liability and that they are aware of and privy to corporate correspondence relating to their corporate duties including notices of assessment sent to the corporation.

Ball, 563 N.E.2d at 524. Thus, “notice to the corporation satisfies the due process requirement of notice and opportunity to be heard in that it is reasonably calculated to afford the responsible officer actual notice of the corporation’s potential liability and his own potential liability.” Id.
It follows, then, that if Sir Beef timely received notice of assessments from the Department, See footnote Fink’s procedural due process rights of notice and the opportunity to meaningfully respond are not jeopardized. Indeed, once Sir Beef received notice, it had a meaningful opportunity to respond by either protesting the assessment or paying the assessment and filing a claim for refund (per statute). See A.I.C. § 6-8.1-5-1(c); Ind. Code Ann. § 6-8.1-9-1(a) (West 1995) (amended 2003). Because Fink’s liability is derivative in nature, “[o]nce the assessment against the corporation becomes conclusive by the failure to present objections thereto the officer is bound by the oscitancy of his corporation.” Ball v. Indiana Dep't of State Revenue, 525 N.E.2d 356, 358 (Ind. Tax Ct. 1988) (internal citation and quotations omitted), aff’d, 563 N.E.2d 522 (Ind.1990)). Consequently, the issue in determining whether Fink’s due process rights have been violated turns on whether Sir Beef timely received the proposed notice of assessments from the Department. See footnote
Fink asserts that “the passage of time has destroyed [his] ability to establish or refute whether [notice was provided to Sir Beef] and that the designated evidence “submitted by the [D]epartment does[ not] establish that the notices were sent.” (Pet’r Resp. in Opp’n to Resp’ts Cross Mot. for Summ. J. at 3.) While the Department submitted copies of the proposed assessments and returned check notices addressed to Sir Beef and dated between November 1990 and March 1995, the accompanying certification only verifies that they are copies of notices on file, it does not verify whether they were actually mailed. ( See Respts’ Designation of Facts and Evid., Ex. B, Ex. C .)
Without knowing whether the Department actually mailed the notices, See footnote the Court finds that a genuine issue of material fact exists as to whether the Department timely mailed assessment notices to Sir Beef.

Accordingly, because proof of timely mailing the proposed assessments to Sir Beef is an evidentiary prerequisite to finding Fink liable for the unpaid tax liabilities, See footnote the parties’ motions for summary judgment are DENIED. The Court will schedule a trial date on this matter in a separate order.
SO ORDERED this 25th day of June, 2004.


         Thomas G. Fisher, Judge
     Indiana Tax Court


Robert R. Faulkner
Attorney at Law
400 Court Street
P.O. Box 4208
Evansville, IN 47724

Steve Carter
Attorney General of Indiana
By: John Snethen
Deputy Attorney General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, Indiana 46204-2770

Footnote: Indiana Code § 6-8.1-5-1 provides that “[i]f the department reasonably believes that a person has not reported the proper amount of tax due, the department shall make a proposed assessment of the amount of the unpaid tax[.] . . . The department shall send the person a notice of the proposed assessment through the United States mail.” Ind. Code Ann. § 6-8.1-5-1(a) (West 1995) (emphasis added).

Footnote: “[T]he department may not issue a proposed assessment . . . more than (3) three years after the latest of the date the return is filed . . . or the due date of the return; or [] in the case of a return filed for the state gross retail or use tax . . . the end of the calendar year which contains the taxable period for which the return is filed.” Ind. Code Ann. § 6-8.1-5-2(a) (West 1995) (amended 2002, eff. 1-1-03). “If a person files a fraudulent, unsigned, or substantially blank return, or if a person does not file a return, there is no time limit within which the department must issue its proposed assessment.” A.I.C. § 6-8.1-5-2(d).

Footnote: If Sir Beef did not timely receive the Department’s notices, the Department’s actions against Fink may be barred. See A. I. C. § 6-8.1-5-2(a).

Footnote: The Department’s Records Custodian certified “that the attached records are, in fact, certified copies of documents or information on file with the [Department].” (Respts’ Designation of Facts and Evid., Ex. B at 1, Ex. C at 1.) If the Department establishes that the notices were timely mailed to Sir Beef, Sir Beef is presumed to have received them. Carter v. Review Bd. of Indiana Dep’t of Employment & Training Servs., 526 N.E.2d 717, 718-19 (Ind. Ct. App. 1988) (stating that where an administrative agency sends notice through the regular course of mail, a presumption (rebuttable) arises that such notice is received), review denied.

Footnote: Proof of timely mailing will also resolve an alternative claim raised by Fink: that the Department’s attempt to collect the unpaid tax amounts from him is barred by the doctrine of laches. “Laches” is an equitable defense to stop another person from asserting a claim he would normally be entitled to assert. Storm, Inc. v. Indiana Dep't of State Revenue, 663 N.E.2d 552, 557 (Ind. Tax Ct. 1996). Because “laches involves delay in bringing a case, not delay in resolving a case[,]” see id. (footnote omitted), if the Department timely mailed notices to Sir Beef its actions against Fink would not be barred by laches because it timely asserted its claim against Sir Beef. See A.I.C. § 6-8.1-5-2(a).