Formation and membership of an Indiana limited liability company (LLC) included the Taxpayer. The LLC did not remit the proper amount of withholding tax to Indiana for the tax period from 1999-2011. From 2006 through January 2011, the Indiana Department of Revenue (Department) assessed the outstanding corporate withholding tax, interest, and penalty against the Taxpayer personally.
...DISCUSSION
...
The Department assessed the proposed withholding taxes against the Taxpayer pursuant to IC § 6-3-4-8(g), which provides that "[i]n the case of a corporate or partnership employer, every officer, employee, or member of such employer, who, as such officer, employee, or member is under a duty to deduct and remit such taxes shall e personally liable for such taxes, penalties, and interest."
Taxpayer admitted his membership with the LLC. However, Taxpayer asserted that he did not have any responsibilities in connection with the company, but rather that Taxpayer was a passive investor. Taxpayer further asserted, and provided documentation showing, acquisition of the LLC by another company in 2005. That acquisition severed Taxpayer's connection with the LLC. Taxpayer provided substantial documentation indicating that he was not responsible for the payment of corporate trust taxes during the 2006 through 2011 tax period.
FINDING
The Taxpayer's protest is sustained.
http://www.in.gov/legislative/iac/20120229-IR-045120073NRA.xml.pdf
