Source: http://www.in.gov/legislative/iac/20121226-IR-045120640NRA.xml.html
Timestamp: 2014-08-21 20:01:13
Document Index: 688195726

Matched Legal Cases: ['§ 6', '§ 6', '§ 6654', '§ 6', '§ 6', '§ 6654', '§ 6654', '§ 6', '§ 6']

01-20120433P.LOF
Letter of Findings Number: 01-20120433P
I. Individual Income Tax – Negligence Penalty.
Authority: IC § 6-8.1-5-1; 45 IAC 15-11-2.
Taxpayers protest the assessment of a penalty for late filing and payment of individual income tax.
II. Individual Income Tax – Estimated Tax Penalty.
Authority: IC § 6-3-4-4.1; I.R.C. § 6654.
Taxpayers protest the assessment of a penalty for failure to remit sufficient estimated tax payments.
III. Individual Income Tax – Interest.
Taxpayers protest the imposition of interest on their tax liability.
Taxpayers are individuals residing in Indiana. For 2009, one of the Taxpayers had wages withheld for New York State income taxes as opposed to Indiana income taxes. Taxpayers filed their 2009 Indiana income tax return, which reflected an underpayment. The Department imposed penalty and interest based on the underpayment. Separately, the Department imposed a penalty for failure to make sufficient estimated tax payments for the 2009 tax year. Taxpayers protested the assessments, the Department conducted an administrative hearing, and this Letter of Findings results. Further information will be supplied as necessary.
Taxpayers protest the assessment of a penalty for failure to remit Indiana individual income tax in a timely manner.
In this particular case, Taxpayers have provided evidence that its failure to timely pay taxes was the result of a unique, one-time occurrence beyond Taxpayers' control. Taxpayers' filing and payment history shows a consistent pattern of timely filing and payment of taxes except for the year at issue. Based on the circumstances present in this case, Taxpayers have provided sufficient information to demonstrate that their failure to timely remit taxes was due to reasonable cause.
Taxpayers protest the imposition of the ten percent penalty on Taxpayers' failure to make sufficient estimated tax payments as required pursuant to IC § 6-3-4-4.1, which provides for a ten-percent penalty for failure to make sufficient estimated payments during the tax year.
Under IC § 6-3-4-4.1(a) and (b), a taxpayer is required to make estimated payments equal to a percentage of the current year's Indiana income tax liability or the prior year's Indiana income tax liability if the taxpayer determines that the taxpayer's tax liability not otherwise paid by withholding was greater than $1,000. The percentage requirements for the minimum estimated tax payments are set forth in I.R.C. § 6654(d)(1)(B). The estimated tax payments must be made in four installments, on the dates specified by I.R.C. § 6654(c). Failure to make sufficient estimated tax payments is subject to a ten (10) percent penalty in the amount of the underpayment.
With regard to the tax year in question, Taxpayers have provided sufficient information to conclude that the penalty for failure to remit timely estimated tax payments should not be imposed.
Taxpayers protest the imposition of interest with respect to its late payment of tax. For taxes unpaid by the due date for payment, IC § 6-8.1-10-1(b) provides for the imposition of interest. Notwithstanding Taxpayers' circumstances, IC § 6-8.1-10-1(e), provides that the Department cannot waive interest even if reasonable cause otherwise exists for penalty waiver.
Taxpayers' protest is sustained on the negligence penalty. Taxpayers' protest is sustained with regard to the estimated tax penalty. Taxpayers' protest of interest is denied.
Composed: Aug 21,2014 4:01:13PM EDT