Taxpayer is an Indiana business filing as an S corporation.
Taxpayer operates several related businesses. As the result of an audit, the
Indiana Department of Revenue ("Department") determined that Taxpayer
had not collected and remitted county income tax for several of its employees
during the tax years 2009 and 2010. The Department issued proposed assessments
for the withholding tax.
...
Taxpayer protests the imposition of withholding tax for the
tax years 2009-10. Taxpayer states that it does not dispute that it had the
obligation to withhold county income tax on wages which it paid to its
employees. Taxpayer does protest the amount which is due. At hearing, Taxpayer
stated that the Department should conduct a review of the approximately 160
employees to determine if they self-reported county withholding tax on their
individual income tax returns. The Department notes that the burden of proving
a proposed assessment wrong rests with the person against whom the proposed
assessment is made, as provided by IC § 6-8.1-5-1(c).
The relevant regulation is 45 IAC
3.1-1-97, which states in relevant part:
Employers who make payments of wages subject to the Adjusted
Gross Income Tax Act, and who are required to withhold Federal taxes pursuant
to the Internal Revenue Code (U.S.C. Title 26), are required to withhold from
employees' wages Adjusted Gross and County Adjusted Gross Income Tax.
Therefore, employers such as Taxpayer are required to
withhold adjusted gross and county adjusted gross income tax from payments of
wages made to its employees.
Taxpayer has provided no documentation of any kind in
support of its protest. Taxpayer states that it would be burdensome for it to
do the research in support of its protest and states that the Department could
do the research in Taxpayer's place. The Department declines Taxpayer's offer
to prove the proposed assessments wrong and reminds Taxpayer that it is
Taxpayer's position to prove the proposed assessments wrong. Taxpayer has not
met the burden imposed by IC§ 6-8.1-5-1(c).
