The Department issued a proposed a assessment for penalty due to Taxpayer's failure to timely file its October 2013 sales tax return. Taxpayer protests the imposition of penalty and requests a waiver of that penalty.
The Department refers to IC § 6-8.1-10-2.1(d), which states:
(d) If a person subject to the penalty imposed under this section can show that the failure to file a return, pay the full amount of tax shown on the person's return, timely remit tax held in trust, or pay the deficiency determined by the department was due to reasonable cause and not due to willful neglect, the department shall waive the penalty.
. . . .
Next, the Department refers to
45 IAC 15-11-2(b), which states:
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.
45 IAC 15-11-2(c) provides in pertinent part:
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.
In this case, the Department determined that Taxpayer did not properly file its October 2013 sales tax return. The Department imposed penalty under IC § 6-8.1-10-2.1. As a result of the protest process, Taxpayer has affirmatively established that it acted reasonably, as required by IC § 6-8.1-10-2.1(d) and
45 IAC 15-11-2(b). The penalty will be waived. However, the Department takes this opportunity to notify Taxpayer that, since it is now aware of the proper filing procedures, such a waiver will not be allowed in the case of any similar future occurrence.