20110223-IR-045110067NRA Letters of Findings Number: 03-20100654P; 03-20100655P; 04-20100656P Sales Tax, Withholding Tax, and Wireless Prepaid Tax-Penalty For the Periods August 2010 and September 2010

DEPARTMENT OF STATE REVENUE

03-20100654P.LOF

03-20100655P.LOF

04-20100656P.LOF

Letters of Findings Number: 03-20100654P; 03-20100655P; 04-20100656P Sales Tax, Withholding Tax, and Wireless Prepaid Tax-Penalty For the Periods August 2010 and September 2010

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 It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register.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.

ISSUE

I. Tax Administration–Penalty.

Authority: IC § 6-8.1-10-2.1; IC § 6-8.1-10-5.

Taxpayer protests the imposition of the one hundred percent penalty for remitting dishonored tax payments.

STATEMENT OF FACTS

Taxpayer was assessed a ten-percent penalty for four dishonored tax payments. The Indiana Department of Revenue ("Department") later issued a one hundred percent penalty for the dishonored payments. Taxpayer protested the imposition of the penalty on the payments. Additional facts will be supplied as necessary.

I. Tax Administration–Penalty.

DISCUSSION

Taxpayer protests the imposition of penalties for remitting subsequently-dishonored payments.

Under IC § 6-8.1-10-5, a person who issues a check or other payment draft upon which the Department is unable to obtain payment–in whole or in part–is subject to penalties based on the amount upon which the Department is unable to collect. IC § 6-8.1-10-5 (a) provides for a ten-percent penalty. Under IC § 6-8.1-10-5 (b), the Department is required to then give the person ten days in which to pay the tax and penalty, or the penalty increases to one hundred percent. However, the penalties can be waived upon a showing of reasonable cause.

Taxpayer noted that the payments in question were the first payments Taxpayer made via electronic funds transfer. Taxpayer made a minor error in submitting the payments in question. While errors do not automatically justify penalty waiver, Taxpayer provided information demonstrating how the error occurred and that the error was the result of reasonable cause for purposes of IC § 6-8.1-10-5. However, the eventual tax payment was still remitted after the statutory deadline and thus is subject to late payment under IC § 6-8.1-10-2.1.

FINDING

Taxpayer's protest is sustained with regard to the dishonored payment penalty. Taxpayer is subject to the ten-percent late payment penalty.

Posted: 02/23/2011 by Legislative Services Agency

DIN: 20110223-IR-045110067NRA

Composed: Nov 01,2016 1:05:15AM EDT

A PDF version of this document.