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As noted, the Department issued a proposed penalty assessment for the months in question. Taxpayer, in turn, protests the imposition of penalties and requests a waiver of those penalties. In its protest letter, Taxpayer's representative states:
[W]e discovered that [Taxpayer] sales tax for April 2012, May 2012, and June 2012 had been filed incorrectly and that the wrong amount had been paid. After recalculating the sales tax for those months we submitted an amendment notice via the INTax website.
Taxpayer uses an accounting firm to calculate its sales tax. In its protest letter, Taxpayer's representative states that the "error was caused by the actions of a new employee who misread the Excel sheet that we use to compute the sales tax amount."
Penalty waiver is permitted if the taxpayer shows that the failure to pay the full amount of the tax was due to reasonable cause and not due to willful neglect. IC § 6-8.1-10-2.1.
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In the present case, Taxpayer argues that its failure to properly remit sales tax for three months was due to an error by a new employee at Taxpayer's accounting firm. Taxpayer further argues that "the employee involved found their error and corrected it without prompting from [the Department]...." A review of the Department's records shows that Taxpayer has a good payment history with the Department. Based upon Taxpayer's argument and information, the Department finds that Taxpayer has established it exercised ordinary business care and prudence under 45 IAC 15-11-2 (c). Thus the penalty should be waived.
