in-20250917-IR-045250458NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 02-20251658 Tax Administration For the Year 2023 HOLDING Multinational Conglomerate failed to demonstrate that it was not responsible for statutory interest and penalties. ISSUE

I. Tax Administration – Penalties and Interest.

Authority: IC 6-3-4-4.1; IC 6-8.1-5-1; IC 6-8.1-10-1; IC 6-8.1-10-2.1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Express Scripts Inc. v. Indiana Dep’t of State Revenue, 170 N.E.3d 273 (Ind. Tax Ct. 2021); Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Wendt LLP v. Indiana Dep’t of State Revenue, 977 N.E.2d 480 (Ind. Tax Ct. 2012); 45 IAC 15-6-1; 45 IAC 15-11-2. Taxpayer requested that the Department waive the penalties and interest. STATEMENT OF FACTS Taxpayer is a multinational conglomerate conducting business in Indiana and outside of Indiana. During 2023, Taxpayer did not file any estimated adjusted gross income tax returns and did not remit the tax on or before April 20, June 20, September 20, and December 20 of the tax year 2023. In April 2024, Taxpayer paid approximately $400,000. Taxpayer did not file the 2023 return and pay the full amount of tax due until November 2024. The Indiana Department of Revenue (“Department”) reviewed and assessed Taxpayer interest and penalties. Taxpayer protested. This final determination ensues and addresses Taxpayer’s protest for 2023 based on the documents provided and information available within the file.

I. Tax Administration – Penalties and Interest.

DISCUSSION Taxpayer was assessed underpayment penalty, late penalty, and statutory interest because it did not make any estimated payments in 2023. Taxpayer remitted a payment for 2023 in early 2024 but it did not pay sufficient amount of tax due on or before May 15, 2024. Taxpayer filed its tax return in November 2024 and only then, did it pay the tax due. Taxpayer protested both penalties and interest; it asked that the Department waive the interest and for both penalties to be abated. The Department “shall make a proposed assessment of the amount of the unpaid tax on the basis of the best information available to the [D]epartment” if it “reasonably believes that a person has not reported the proper amount of tax due[.]” IC 6-8.1-5-1(b). Notices of proposed assessment issued by the Department are prima facie evidence that the Department’s assessments are correct; the burden of proving the assessment is incorrect rests with the taxpayer. IC 6-8.1-5-1(c). Poorly developed or non-cogent arguments are subject to waiver. Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138, 1145 (Ind. Tax Ct. 2010); Wendt LLP v. Indiana Dep’t of State Revenue, 977 N.E.2d 480, 486 n.9 (Ind. Tax Ct. 2012). The taxpayer, when submitting evidence as part of the taxpayer’s protest, needs to specify and explain the portions of the evidence that taxpayer believes to be relevant. As the Indiana Tax Court has previously noted (in the context of a summary judgment motion): “the Court will not consider” exhibits “on the off chance that it might find, on its own and undirected, some fact that supports” a claim, and “the Court is not required to search for specific facts on which” a party relies. Express Scripts Inc. v. Indiana Dep’t of State Revenue, 170 N.E.3d 273, 279 (Ind. Tax Ct. 2021). When an agency is charged with enforcing a statute, courts defer to the agency’s reasonable interpretation of that statute “over an equally reasonable interpretation by another party.” Indiana Dep’t of State Rev. v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Taxpayer requested that both penalties to be abated. IC 6-3-4-4.1, in relevant part, states: 45 IAC 15-6-1 provides A person is subject to a ten percent penalty if the person “fails to pay the full amount of tax shown on the person’s return on or before the due date for the return or payment.” IC 6-8.1-10-2.1(a)(2) and (b). IC 6-8.1-10-2.1(d) states that “[i]f a person subject to the penalty imposed under this section can show that the failure to . . . pay the full amount of tax shown on the person’s return, . . . or pay the deficiency determined by the department was due to reasonable cause and not due to willful neglect, the department shall waive the penalty.” 45 IAC 15-11-2(b) further explains: The Department shall abate the penalty when a taxpayer “affirmatively establishes that the failure to . . . pay the full amount of tax due . . . or pay a deficiency was due to reasonable cause and not due to negligence.” 45 IAC 15-11-2(c); see also IC 6-8.1-10-2.1(d). Finally, in order to establish reasonable cause, the taxpayer is required to demonstrate that it “exercised ordinary business care and prudence in carrying out or failing to carry out a duty giving rise to the penalty imposed . . . . ” 45 IAC 15-11-2(c). The Department is mindful that “[r]easonable cause is a fact sensitive question and thus will be dealt with according to the particular facts and circumstances of each case.” Id. In determining whether the taxpayer has reasonable cause, the Department is required to consider the following factors: Taxpayer in this case claimed that both penalties should be abated. Taxpayer asserted that it “has a comprehensive system in place to gather all tax return documentation and relevant information during the provision for estimated payments.” Taxpayer further stated the following: Upon review, however, the Department is not able to agree. A careful review of both Taxpayer’s statement above and the Department’s records showed that Taxpayer did not make any quarterly estimated income tax payments during 2018, 2019, 2020, 2021, and 2022. Taxpayer received various notices from the Department. Taxpayer thus was on notice that it was required to make quarterly estimated income tax payments. In particular, previously, Taxpayer requested and was granted the same penalty abatement for both penalties for the 2022 year. In a decision addressing that 2022 abatement request, the Department explained that “there are sufficient grounds calling for the Department to abate both penalties.” But Taxpayer did not change its practice. And again, Taxpayer did not (i) comply with the statutory requirement, (ii) file the estimated adjusted gross income tax returns, and (iii) pay the tax on or before April 20, June 20, September 20, and December 20 of the tax year 2023. Taxpayer thus is responsible for the underpayment penalty. As mentioned earlier, an extension for filing a tax return could be granted only when Taxpayer (i) petitioned the Department “before the original tax due date or obtains an automatic extension pursuant to IC [§] 6-8.1-5-2(e)” and (ii) included “a payment of at least ninety [(90) percent] of the tax reasonably expected to be due on the due date or at least one hundred [(100) percent] of the immediate prior year total tax liability.” Crucially, an extension for filing a tax return does not extend the due date of tax owed. That is, the full amount of tax was due on or before May 15, 2024. As mentioned, “[i]gnorance of the listed tax laws, rules and/or regulations is treated as negligence.” Taxpayer in this case was assessed interest because it failed to timely pay the full amount of tax due. Taxpayer asked that the Department waive the interest. IC 6-8.1-10-1(a) states, “[i]f a person fails to file a return for any of the listed taxes, fails to pay the full amount of tax shown on the person’s return by the due date for the return or the payment, or incurs a deficiency upon a determination by the department, the person is subject to interest on the nonpayment.” IC 6-8.1-8-1.5 establishes an order to apply the partial payment “whenever a taxpayer makes a partial payment on the taxpayer’s tax liability.” Statutory interest is mandatory when Taxpayer failed to pay the full amount of tax owed before due. IC 6-8.1-10-1(a). The Department is not permitted to waive interest unless one of three very specific circumstances are met, as provided by IC 6-8.1-10-1(e). None of those three circumstances apply here. To conclude, given the totality of the circumstances, the Department is not able to abate both penalties and interest. FINDING Taxpayer’s protest is denied. July 14, 2025 Replaces Finding Document: New