The Department’s Motion states that two of the claims in
Medco’s Petition must be dismissed pursuant to Trial Rule 12(B)(6) because they
are claims upon which legal relief cannot be granted. First, the Department
asserts that Medco cannot prevail on its claim that the Department was required
to source Medco’s receipts based on two separate advisory letters because those
letters did not bind the Department. (See Resp’t Partial Mot. Dismiss Summ. J.
(“Resp’t Mot.”) ¶¶ 3, 5(a).) Second, the Department argues that Medco cannot
prevail on its claim that it is entitled to a refund because Medco never filed
a claim for refund with the Department. (See Resp’t Mot. ¶¶ 4, 5(b).)
Advisory Letters
Medco’s Petition states that through its representative at
Pricewaterhouse Coopers LLP (PWC), it requested the Department’s written advice
about how it should source its receipts to Indiana. (See Pet’r Pet. ¶ 31, Exs.
C, D.) Medco attached to its Petition the two advisory letters PWC received and
on which it relied to prepare its December 25, 2004, and December 31, 2005
Indiana tax returns. (See Pet’r Pet. ¶¶ 32-35, Exs. C, D.) The two letters
indicate that in requesting the Department’s advice, PWC did not identify Medco
as the taxpayer, but rather referred to it using an assumed name. (See Pet’r
Pet., Exs. C, D.)
As the administrative agency that administers, collects, and
enforces Indiana’s listed taxes, the Department often provides advice to
taxpayers in varying forms. See IND. CODE § 6-8.1-3-3(a) (2003); 45 IND. ADMIN.
CODE 15-3-2(d)(1) (2003). The form in which the advice is provided, as well as
the circumstances in which the advice is binding on the Department, are
outlined in Indiana’s Administrative Code, 45 I.A.C. 15-3-2. For example, the
Department may issue binding letters of finding or letters of advice
interpreting listed taxes, or it may issue non-binding letters of advice. See
45 I.A.C. 15-3-2(d)(1),(3), (e); Mirant Sugar Creek, LLC v. Indiana Dep’t of
State Revenue, 930 N.E.2d 697, 700 (Ind. Tax Ct. 2010). Ultimately, the binding
effect of the Department’s advice is contingent on the disclosure of the
taxpayer’s identity. See, e.g., 45 I.A.C. 15-3-2(d)(1),(3) (stating that the
Department will not issue a binding ruling to an anonymous taxpayer and that
only the taxpayer to whom a ruling is issued may rely on it).
Here, the two advisory letters were issued to a representative
of an unidentified taxpayer, indicating that the Department is not bound by
them. Nevertheless, Medco cites to 45 I.A.C. 15-3-2(e) for the proposition that
the Department is also bound by advice it provides regarding a particular
transaction:
Based upon general inquiries and correspondence, the
department often issues written letters of advice. Such letters are advisory in
nature only and merely technical assistance tools for the taxpayer. Strictly informational
type letters are not to be considered rulings by the department and will not be
binding. However, some written inquiries have asked for the tax consequences of
a particular transaction, based upon the facts presented. In such instances,
the department may consider such letters as rulings that may bind the
department to the position stated in respect to that taxpayer only. All such
rulings issued will be binding provided that all of the facts described in
obtaining the ruling are true and accurate. Any misstatement of material fact
or information will void the ruling.
45 I.A.C. 15-3-2(e) (emphasis added). (See also Pet’r Mem.
Opp’n Resp’t Mot. Dismiss Partial Summ. J. (“Pet’r Mem.”) at 10, 13 (stating
that Medco’s representative asked for the tax consequences of a particular
transaction and all of the facts presented in requesting the advice were true
and accurate).) Medco’s argument, however, misses the import of 45 I.A.C.
15-3-2(e) as a whole.
45 I.A.C. 15-3-2(e) allows a typically non-binding letter of
advice regarding a particular transaction that is based on true and accurate
facts to be binding on the Department, but only to the taxpayer who requested
the letter. Consequently, this provision requires a taxpayer to come forward
with specificity in both its factual presentation and its identity for the
Department to be bound. 45 I.A.C. 15-3-2(e). Here, however, a PWC
representative requested the advisory letters on behalf of an unnamed client,
not Medco. Accordingly, the Department is correct that Medco is not entitled to
relief on this claim.
Refund Claim
Medco’s Petition also states that during the audit Medco
“requested a refund from the Department’s auditor[,]” but that the auditor
denied its request. (See Pet’r Pet. ¶¶ 6-7.) Medco’s Petition therefore asks
the Court to order the Department to pay the refund because the Department’s
March 7, 2011 Letter of Findings constituted a denial of the refund requested
by Medco. (See Pet’r Pet. at 3 ¶ 17, 14 ¶¶ 4-5.) The Department seeks to
dismiss this claim on the basis that Medco never filed for a refund.
The Department has no legal method of generating a claim for
refund on its own; rather, a claim for refund can only be initiated by a
taxpayer pursuant to the procedure set forth in Indiana Code § 6-8.1-9-1. 45
IND. ADMIN. CODE 15-9-2(b) (2003). Indiana Code § 6-8.1-9-1 provides that “[i]f
a person has paid more tax than the person determines is legally due for a
particular taxable period, the person may file a claim for a refund with the
department.” IND. CODE § 6-8.1-9-1(a) (2003) (amended 2012) (emphasis added).
“[I]n order to obtain the refund, the person must file the claim with the
department within three (3) years after the latter of . . . [t]he due date of
the return[or t]he date of payment.” Id. (emphasis added). Furthermore, the
claim must include certain information such as the amount of the refund to
which the person is entitled, the reasons why the person is entitled to the
refund, the tax period for which the overpayment is claimed, and the year and
date of the overpayment. Id.; 45 I.A.C. 15-9-2(d). Finally, a claim for refund
generally must be filed on the form prescribed by the Department. See 45 I.A.C.
15-9-2(d); UACC Midwest, Inc. v. Indiana Dep’t of State Revenue, 629 N.E.2d
1295, 1298 (Ind. Tax Ct. 1994) (explaining that although the taxpayer did not
use the Department’s prescribed form, its amended returns complete with
explanatory statements qualified as claims for refund because they provided the
Department with the information required by both Indiana Code § 6-8.1-9-1 and
45 I.A.C. 15-9-2).
Medco’s Petition
states that it “requested” a refund from the auditor during the audit. (Pet’r
Pet. ¶ 6.) The Department’s final determination, attached to and made a part of
Medco’s Petition, explains that Medco did not file any refund claims or amended
returns. (Pet’r Pet., Ex. A at 4.) Accordingly, the facts set forth in Medco’s
Petition fail to indicate that Medco filed a claim for refund with the
Department as required by Indiana Code § 6-8.1-9-1. Moreover, the Department’s
final determination cannot constitute a denial of a claim for refund because it
only addresses Medco’s protest of the Proposed Assessments, not whether the
auditor ever considered that Medco overpaid any tax. (See Pet’r Pet., Ex. A at
3-4.) Thus, Medco is not entitled to legal relief on this claim.
