Taxpayer is an Indiana business. As the result of an audit,
the Indiana Department of Revenue ("Department") issued proposed
assessments for sales tax, use tax, ten percent negligence penalties, and
interest for the tax years 2004 through 2010.
…
The Department issued proposed assessments for sales tax,
interest, and the ten percent negligence penalties for each tax year in
question. Taxpayer protests the imposition of penalties and requests a waiver
of those penalties. Taxpayer states that it was unaware that its activities
were taxable transactions and that it had a duty to collect and remit sales tax
as a retail merchant, since it was founded as a service provider and there were
initially no sales of tangible personal property. Also, Taxpayer points out
that this was its first audit. Taxpayer believes that these factors establish
grounds for waiver of the ten percent penalties.
…
In this case, Taxpayer incurred deficiencies which the
Department determined were due to negligence under 45 IAC
15-11-2(b), and so was subject to penalties under IC § 6-8.1-10-2.1(a)(4).
After review of the documentation and analysis provided in the protest process,
Taxpayer has affirmatively established that its failure to pay the deficiencies
was due to reasonable cause and not due to negligence, as required by 45 IAC
15-11-2(c). However, the Department takes this opportunity to inform
Taxpayer that it is now aware of its sales tax collection and remittance
responsibilities and waiver of penalty is unlikely for any future failures to
meet those responsibilities.
