Taxpayer is an S corporation doing business in Indiana.
Taxpayer was assessed penalty and interest for the late payment of non-resident
shareholder pass-through withholding tax which was paid after the due date of
January 20, 2012. Taxpayer was also assessed penalty for the late filing of
forms WH-3s and WH-18s submitted after the due date of February 28, 2012.
Taxpayer timely filed its IT-20S by the April 15, 2012 date.
...
Taxpayer argues that it is entitled to abatement of the
penalty for late payment of withholding tax.
...
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 has provided sufficient information and
documentation to show that it did not willfully neglect timely payment of its
tax. Taxpayer's protest of the imposition of the penalty is sustained.
Taxpayer also protests the imposition of interest, however
the Department may not waive interest as provided by IC § 6-8.1-10-1(e).
...
Taxpayer protests the imposition of the penalty on
Taxpayer's failure to timely file forms WH-3 and WH-18.
...
In this instance, Taxpayer has established that it qualifies
for waiver of the penalty.
