Taxpayer made payments weekly through an automatic electronic funds transfer. Two of the electronic funds transfers were returned for insufficient funds. The Department assessed a penalty according to IC § 6-8.1-10-5, which states:
(a) If a person makes a tax payment with a check, credit card, debit card, or electronic funds transfer, and the department is unable to obtain payment on the check, credit card, debit card, or electronic funds transfer for its full face amount when the check, credit card, debit card, or electronic funds transfer is presented for payment through normal banking channels, a penalty of ten percent (10 percent) of the unpaid tax or the value of the check, credit card, debit card, or electronic funds transfer, whichever is smaller, is imposed.
. . .
(d) If the person subject to the penalty under this section can show that there is reasonable cause for the check, credit card, debit card, or electronic funds transfer not being honored, the department may waive the penalty imposed under this section.
(Emphasis added)
Taxpayer shows that there was reasonable cause for the electronic transfers not being honored. The payments were satisfied within a few days after they were returned. Additionally, Taxpayer does not have a history of making payments with insufficient funds and quickly paid the amount due.
