Taxpayer is a company doing business in Indiana. For the period ending December 31, 2011, Taxpayer was required to remit Indiana employee withholding taxes on March 15, 2012. However, Taxpayer's tax preparer remitted Indiana employee withholding tax on April 5, 2012, twenty days after the deadline. The Indiana Department of Revenue ("Department") assessed interest and a ten-percent penalty for the late payment of employee withholding tax.
...
Taxpayer argues that it is entitled to abatement of the penalty for the late payment of employee 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 requests abatement because it claims to have a clean filing history and because the filing deadline for the return is, in Taxpayer's opinion, confusing. However, for the period ending December 31, 2010, Taxpayer or Taxpayer's preparer also remitted employee withholding taxes on behalf of Taxpayer after the statutory deadline. For that period, the Department abated Taxpayer's penalty, and therefore an abatement based on having a clean history and for confusion on the filing deadline is not warranted.
Taxpayer has also not proved that this was not negligence, and the preparer, standing in Taxpayer's shoes, did not exercise "ordinary business care and prudence." Therefore, the penalty was properly imposed.
...
The Department assessed interest on the late payment of withholding tax. Taxpayer requested that the Department waive interest.
IC § 6-8.1-10-1(a) provides, in relevant part, as follows:
If a person... fails to pay the full amount of tax... by the due date for the return or the payment, or incurs a deficiency upon a determination by the department, the person is subject to interest on the nonpayment.
Pursuant to IC § 6-8.1-10-1(e), the Department does not have the authority to waive the interest.
