Taxpayer filed its sales tax returns and/or made its tax
payments one to four days late for a few tax periods. Taxpayer was assessed
penalties and interest for the December 2008, November 2010, December 2010,
February 2011, and December 2011 tax periods. Taxpayer requests abatement of
the penalties for these periods. Taxpayer's protest was untimely for the
December 2008 tax period and, therefore, cannot be protested.
...
45 IAC 15-11-2(b)
clarifies the standard for the imposition of the negligence penalty as follows:
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 shall waive the negligence penalty imposed
under IC 6-8.1-10-1
if the taxpayer affirmatively establishes that the failure to file a return,
pay the full amount of tax due, timely remit tax held in trust, or pay a
deficiency was due to reasonable cause and not due to negligence. In order to
establish reasonable cause, the taxpayer must demonstrate that it exercised
ordinary business care and prudence in carrying out or failing to carry out a
duty giving rise to the penalty imposed under this section.
Taxpayer has provided sufficient information to establish
that its failure to pay the deficiency in this instance was not due to
Taxpayer's negligence, but was due to reasonable cause as required by 45 IAC 15-11-2(c).
While Taxpayer's current circumstances show that Taxpayer acted with reasonable
cause, Taxpayer should be on notice that should these circumstances arise
again, penalty waiver may not be warranted.
