Source: http://www.in.gov/legislative/iac/20140528-IR-045140151NRA.xml.html
Timestamp: 2014-11-28 00:49:06
Document Index: 656052558

Matched Legal Cases: ['§ 6', '§ 6', '§ 6', '§ 6', '§ 6', '§ 1361', '§ 1366', '§ 62', '§ 6', '§1361', '§ 6', '§ 6', '§ 6', '§1366']

01-20130646.LOF
Letter of Findings Number: 01-20130646
Authority: IC § 6-3-1-3.5(a); IC § 6-3-1-10; IC § 6-3-2-1; IC § 6-3-2-2.8; IC § 6-8.1-5-1(c); Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); 45 IAC 3.1-1-66; 26 U.S.C. § 1361; 26 U.S.C. § 1366; 26 U.S.C. § 62.
Taxpayers protest the imposition of adjusted gross income tax.
Taxpayers reported an overpayment on their 2011 Form IT-40. Taxpayers elected to have this overpayment applied to their next year's tax liability. The Department's adjustment of the Taxpayers' Indiana adjusted gross income reduced the Taxpayers' reported overpayment. The amount the Department reduced Taxpayers' overpayment represents the Department's proposed assessment of tax. Taxpayers protest the Department's proposed assessment of tax. An administrative hearing was held, and this Letter of Findings results. Additional facts will be provided as needed.
Taxpayers protest the Department's proposed assessment of tax. All tax assessments are prima facie evidence that the Department's claim for the tax is valid, and the taxpayer bears the burden of proving that any assessment is incorrect. IC § 6-8.1-5-1(c); Dep't of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep't of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). The issue before the Department is whether Taxpayers have met their burden to prove the Department's proposed assessment of tax is incorrect.
Except in specific circumstances, corporations electing subchapter S status pursuant to section 1361 of the Internal Revenue Code ("S corporations") are exempt from the Indiana adjusted gross income tax. 26 U.S.C. §1361, IC § 6-3-2-2.8, 45 IAC 3.1-1-66; See also IC § 6-3-1-10, IC § 6-3-2-1(b). For Indiana income tax purposes, the adjusted gross income of S corporations is passed through to its shareholders, and "shareholders are taxed on their distributive shares of income at the individual income tax rate." 45 IAC 3.1-1-66; see also 26 U.S.C §1366. Shareholders, including Indiana resident individuals, are taxed on their distributive shares of income at the individual income tax rate. Id.
DIN: 20140528-IR-045140151NRA
Composed: Nov 27,2014 7:49:18PM EST