Taxpayer is a company doing
business in Indiana. For the period ending May 31, 2012, Taxpayer was required
to remit Indiana employee withholding taxes on June 20, 2012. However, Taxpayer
remitted Indiana employee withholding tax on June 21, 2012, one day after the
deadline. The Indiana Department of Revenue ("Department") assessed
interest and a ten-percent penalty for the late payment of the employee
withholding tax. Taxpayer protested these assessments.
Taxpayer argues that it is
entitled to abatement of the penalty for late payment of employee withholding
tax.
...
Departmental
regulation 45 IAC 15-11-2(b) defines negligence as
"the failure to use such reasonable care, caution, or diligence as would
be expected of an ordinary reasonable taxpayer." Negligence is to "be
determined on a case-by-case basis according to the facts and circumstances of
each taxpayer." Id.
IC § 6-8.1-10-2.1(d) allows
the Department to waive the penalty upon a showing that the failure to pay the
deficiency was based on "reasonable cause and not due to willful
neglect." Departmental regulation 45 IAC 15-11-2(c) requires that 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...."
Taxpayer makes batch
payments through its bank. Taxpayer can set the date that payments are made.
For the payment of the withholding tax for the month ending May 30, 2012,
Taxpayer's employee set the pay date as the wrong date. Taxpayer states that a
simple clerical error was made. However, this fits the definition of
negligence, and thus a negligence penalty is warranted.
Taxpayer states that
Taxpayer has not been delinquent with submitting payments in the past. However,
Taxpayer has had multiple late tax payments for previous periods. Based on its
history of late payments in conjunction with the circumstances of the current
late payment, Taxpayer has not provided sufficient information to justify
penalty waiver.
Taxpayer also protests the
imposition of interest, however the Department may not waive interest as
provided by IC § 6-8.1-10-1(e).
