Taxpayer operates a gas station/convenience store in Indiana and hires several employees. In 2012, the Indiana Department of Revenue ("Department") audited Taxpayer's records for the tax years 2010 and 2011. The audit determined that Taxpayer failed to withhold any county income tax on wages it paid to several employees. As a result, the Department assessed additional county withholding tax pursuant to IC § 6-3-4-8.
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The Department assessed additional county withholding tax on the ground that Taxpayer failed to remit the withholding tax on the wages it paid to several employees. Taxpayer, to the contrary, claimed that it was not liable for the withholding tax because its employees paid the tax when they filed their individual income tax returns for the tax years at issue.
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In this instance, Taxpayer claimed that it was not liable for the withholding tax because its employees reported and paid the county income tax when they filed their individual income tax returns for the 2010 and 2011 tax years. However, Taxpayer did not refer to any statute or regulation authority to support its claim.
As discussed above, Taxpayer bears the burden to prove that the Department's assessment is incorrect. Thus, given the totality of the circumstances, in the absence of other supporting documentation, the Department is not able to agree that Taxpayer met its burden of proof to demonstrate that the proposed assessment is wrong.
