20080430-IR-045080259NRA Letter of Findings Number: 07-0023 Sales and Use Tax For the Calendar Years 2003 and 2004

DEPARTMENT OF STATE REVENUE

04-20070023.LOF

Letter of Findings Number: 07-0023

Sales and Use Tax

For the Calendar Years 2003 and 2004

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 It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register.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(d); 45 IAC 15-11-2

The taxpayer protests the negligence penalty.

STATEMENT OF FACTS

The negligence penalty was assessed on a sales and use tax audit for the calendar years 2003 and 2004. The taxpayer is an international corporation with a plant in Indiana.

I. Tax Administration – Penalty

DISCUSSION

The taxpayer requests the penalty be abated as the taxpayer has a self-assessing use tax system where the taxpayer has paid over $100,000 in use tax per year to the State of Indiana.

The Department points out the taxpayer has a 38% error rate in the payment of use tax. The taxpayer had a liability in the sales and use tax audit of about $120,000. The Department feels this is an error that is a negative factor in the abatement decision

regarding the penalty protest.

The regulation which references the penalty factors is 45 IAC 15-11-2(b) which states:

Negligence, on behalf of a taxpayer is defined as the failure to use such reasonable care, caution, or diligence as would be expected of an ordinary reasonable taxpayer. Negligence would result from a taxpayer's carelessness, thoughtlessness, disregard or inattention to duties placed upon the taxpayer by the Indiana Code or department regulations. Ignorance of the listed tax laws, rules and/or regulations is treated as negligence. Further, failure to read and follow instructions provided by the department is treated as negligence. Negligence shall be determined on a case by case basis according to the facts and circumstances of each taxpayer.

The Department finds the taxpayer was inattentive to tax duties. Inattention is negligence and negligence is subject to penalty. As such, the taxpayer's penalty protest is denied.

FINDING

The taxpayer's penalty protest is denied.

CONCLUSION

The penalty protest is denied as the taxpayer had a 38% error rate in use tax collection, and, the audit assessment of $120,000 is material.

Posted: 04/30/2008 by Legislative Services Agency

DIN: 20080430-IR-045080259NRA

Composed: Nov 01,2016 12:21:48AM EDT

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