Tuesday, May 13, 2014

Revenue Finds Taxpayer Failed to Keep Records Sufficient to Show Assessment of Additional Sales and Use Tax was Incorrect

Excerpts of Revenue's Determination follow:

Taxpayer is a company doing business in Indiana. Taxpayer was audited by the Indiana Department of Revenue ("Department"). As a result of the audit, the Department determined that Taxpayer owed additional sales and use tax.

Under IC § 6-8.1-5-4(a):

Every person subject to a listed tax must keep books and records so that the department can determine the amount, if any, of the person's liability for that tax by reviewing those books and records. The records referred to in this subsection include all source documents necessary to determine the tax, including invoices, register tapes, receipts, and canceled checks.

Taxpayer made various assertions that it could provide records relating to the transactions that the Department claimed to be taxable. At the hearing, the Department requested any records available to substantiate Taxpayer's claims. However, the Department did not receive any documents or records from Taxpayer. Due to the lack of information provided to the Department, Taxpayer has not met its statutory burden of demonstrating that the Department's assessment is wrong.