The Indiana Department of Revenue ("Department") issued a proposed assessment for 2011 Financial Institution Tax ("FIT"), which included a proposed penalty.
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Turning to Taxpayer's protest, Taxpayer's protest letter states in relevant part:
[Taxpayer] did not file a return in Indiana until late 2011 when it was audited and tax was assessed. Part of the audit agreement was that any penalties due for late payment of the 2009-2011 returns which were not under audit would be abated. I have attached a copy of the agreement.
Once an agreement was signed, [Taxpayer] began filing outstanding returns and timely paying estimated tax payments. There was no liability in 2011 until the audit was settled and payments were timely made the next quarter. Every effort was made to follow the agreement and make adequate payments with the information available at that time. Due to extenuating circumstances, I ask that you abate the penalty of $81,093.
Taxpayer references a settlement agreement that Taxpayer entered into with the Department. Since Taxpayer invokes the settlement agreement in its protest, the Department will address it to the extent necessary in this Letter of Findings.
The settlement agreement states that in order to avoid penalty for 2011 that Taxpayer has to pay all estimated Financial Institution Tax on or before a specific date–October 15, 2011. Taxpayer did not make its first estimated payment for FIT until almost two months after the due date. Taxpayer did not receive approval for electronic fund transfer ("EFT") payments until ten days after the due date (October 25, 2011), and did not make the actual payment until December 14, 2011.
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Taxpayer has not demonstrated reasonable cause for the payment not being made until December. Consequently, the penalty will not be waived.
