Taxpayer is a company doing business in Indiana. Taxpayer made a payment for withholding taxes to the Indiana Department of Revenue ("Department"); Taxpayer's payment was not honored by Taxpayer's bank. As a result of this, the Department issued a 100 percent penalty assessment against Taxpayer. Taxpayer filed a protest regarding the 100 percent penalty assessment.
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Taxpayer argues that it is entitled to abatement of the penalty for late payment of employee withholding tax. Taxpayer in its protest letter states in relevant part:
I would like the 100 [percent] penalty that was charged to be reduced to the standard 10 [percent] fee.
On May 15th I sent in a payment on my payment plan for April & September 2012 withholding. Unbeknownst to me it was returned by my bank. I immediately sent out another check on June 7th. On June 10th the Department issued me 2 notices of returned payment. I did not read them as thoroughly as I should have because I had already sent in a replacement check. If I had I would have seen there was a 10 [percent] fee added to the amounts that I paid. Unfortunately, I only repaid the original amount that was returned and as a result I was charged a 100 [percent] penalty.
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Taxpayer has not established reasonable cause for the payment not being honored. At the hearing, Taxpayer stated that it was in litigation with another company, and that Taxpayer's bank account was frozen due to the litigation. Additionally, Taxpayer stated in the protest letter that the Department's notice was not thoroughly read. Taxpayer, under IC § 6-8.1-5-1(c) bears the burden of proof; in the case at hand, Taxpayer has not met that burden.
