Taxpayer operates a gas station and convenience store in
Indiana. The Indiana Department of Revenue (the "Department")
conducted a sales and use tax audit of Taxpayer for the tax years 2009 through
2011. As a result of the Department's audit, Taxpayer was assessed additional
sales tax, penalty, and interest (the "Liabilities"). Taxpayer
entered into a payment plan with the Department to fulfill the Liabilities.
Taxpayer timely protested the assessment of the negligence penalties which were
included in the payment plan.
...
Indiana law requires Taxpayer to demonstrate that it had
reasonable cause for not collecting and remitting the sales tax due. In order
to establish reasonable cause, Taxpayer must demonstrate that it exercised
"ordinary business care and prudence" in conducting the duties from
which the additional tax and penalty arose. 45 IAC
15-11-2(c).
The Department assessed Taxpayer the 10 percent negligence
penalty because Taxpayer had a significant amount of fuel purchased that was
unaccounted for in Taxpayer's records. It is these large discrepancies in
Taxpayer's records that resulted in significant adjustments to gasoline and
diesel fuel sales for the audit periods. Taxpayers are required to keep books
and records sufficient to allow the Department to determine a taxpayer's tax
liabilities. IC § 6-8.2-5-4(a).
Taxpayer has not made an affirmative showing of reasonable
cause for not maintaining proper records or an explanation of the discrepancies
pointed to in the audit. Therefore, the Department finds that Taxpayer has not
made an affirmative showing of reasonable cause for not collecting and not
remitting sales tax for the tax years 2009 through 2011 and therefore the
negligence penalties will not be abated.
