in-20251126-IR-045250647NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 01-20231416 Individual Indiana Income Tax For the Year 2019 HOLDING Taxpayers have not met the burden of proving that the Department’s assessment was incorrect. ISSUE

I. Indiana Individual Income Tax – Federal Discrepancy.

Authority: IC 6-3-1-3.5; IC 6-3-2-1; IC 6-8.1-5-1; Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Indiana Dep’t of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dep’t of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); 45 IAC 15-5-1. Taxpayers argued that the Department’s assessment of additional 2019 income tax was incorrect. STATEMENT OF FACTS Taxpayers are Indiana residents who filed their Indiana tax returns as married filing jointly. The Indiana Department of Revenue (“Department”) determined that Taxpayers underreported their federal adjusted gross income. The Department’s review resulted in a proposed assessment of additional individual income tax. Taxpayers protested the assessment and waived the right to an administrative hearing. This Letter of Findings is written in reliance on information provided by Taxpayers and the Department’s records. Additional facts will be provided as necessary.

I. Indiana Individual Income Tax – Federal Discrepancy.

DISCUSSION Taxpayers protest the imposition of additional Indiana income tax for the tax year 2019. Taxpayers protest that the Department adjusted their federal adjusted gross income (“FAGI”) incorrectly because a portion of their income had been overreported on their W-2’s. Taxpayers provided a letter from their employer, along with copies of their amended W-2’s. As a threshold issue, it is the taxpayer’s responsibility to establish that the existing tax assessment is incorrect. A proposed assessment is prima facie evidence that the Department’s claim for the unpaid tax is valid. IC 6-8.1-5-1(c). The burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made. Id.; See e.g., Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463, 466 (Ind. 2012) and Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). Consequently, a taxpayer is required to provide documentation explaining and supporting his or her challenge that the Department’s position is wrong. Further, “[W]hen [courts] examine a statute that an agency is ‘charged with enforcing . . . [courts] defer to the agency’s reasonable interpretation of [the] statute even over an equally reasonable interpretation by another party.’” Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Thus, all interpretations of Indiana tax law contained within this decision shall be entitled to deference. Indiana imposes a tax “on the adjusted gross income of every resident person, and on that part of the adjusted gross income derived from sources within Indiana of every nonresident person.” IC 6-3-2-1(b). IC 6-3-1-3.5(a) provides the starting point in determining the taxpayer’s taxable income and calculating what would be their Indiana income tax after applying any particular additions and subtractions. The statute provides in part that Indiana adjusted gross income starts with “‘adjusted gross income’ (as defined in Section 62 of the Internal Revenue Code) . . . ” Id. IC 6-8.1-5-1(b), mandates that “[i]f the department reasonably believes that a person has not reported the proper amount of tax due, the department shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available.” (Emphasis added) See also 45 IAC 15-5-1. Upon review of Taxpayers’ Indiana tax returns and the documentation provided by Taxpayer, the Department’s records match Taxpayers’ amended W-2’s. The proposed assessment is not from the incorrect W-2’s but from an additional W-2 for a secondary job that was not reported on Taxpayers’ Indiana tax returns. Taxpayers provided a copy of their federal record of accounts and the Department’s adjustments match the federal records. Thus, Taxpayers have not met the burden of proving the proposed assessment wrong, as required by IC 6-8.1-5-1(c). FINDING Taxpayers’ protest is denied. May 2, 2025 Replaces Finding Document: New