in-20250827-IR-045250392NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 01-20242263 Individual Income Tax For The Tax Year 2023 HOLDING Individual was not responsible for additional tax because he demonstrated that he was a victim of identity theft and the proposed assessment was incorrect. ISSUE

I. Indiana Individual Income Tax – Burden of Proof.

Authority: IC 6-3-1-3.5; IC 6-3-1-12; IC 6-3-1-13; IC 6-3-2-1; IC 6-8.1-5-1; IC 6-8.1-5-4; Indiana Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Miller Brewing Co. v. Indiana Dep’t of State Revenue, 903 N.E.2d 64 (Ind. 2009); 45 IAC 3.1-1-21. Taxpayer protests the assessment, claiming that he was not responsible for tax on three Wage and Tax Statements (“W-2s”). STATEMENT OF FACTS Taxpayer is an individual who resides and works in Indiana. Based on two W-2s, Taxpayer filed an Indiana full-year resident individual income tax return to report his income subject to Indiana income tax for 2023. Upon review, the Indiana Department of Revenue (“Department”) determined that Taxpayer had additional W-2s and proceeded to assess Taxpayer additional tax, penalty, and interest. Taxpayer protested the assessment. A hearing was conducted. This Letter of Findings results. DISCUSSION The Department assessed Taxpayer additional income tax because it found that Taxpayer had additional W-2 income subject to Indiana income tax. Taxpayer, to the contrary, argued that he was not responsible for the additional income tax assessed because he was a victim of identity theft. The issue is whether Taxpayer demonstrated that the assessment was incorrect. IC 6-8.1-5-4(a) requires that a taxpayer must keep books and records so that the Department can determine the amount, if any, of the taxpayer’s liability by reviewing the books and records. If 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 to the [D]epartment” pursuant to IC 6-8.1-5-1(b). All tax assessments are prima facie evidence that the Department’s claim for the unpaid tax is valid; the taxpayer bears the burden of proving that any assessment is incorrect. IC 6-8.1-5-1(c). Importantly, “each tax year stands alone.” Miller Brewing Co. v. Indiana Dep’t of State Revenue, 903 N.E.2d 64, 69 (Ind. 2009). The taxpayer is required to provide documentation to explain and support his or her challenge. When an agency is charged with enforcing a statute, jurisprudence defers to the agency’s reasonable interpretation of that statute “over an equally reasonable interpretation by another party.” Indiana Dep’t of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). Poorly developed and 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). 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(a). Indiana resident “includes (a) any individual who was domiciled in this state during the taxable year, or (b) any individual who maintains a permanent place of residence in this state and spends more than one hundred eighty-three (183) days of the taxable year within this state . . . . ” IC 6-3-1-12. Nonresident is “any person who is not a resident of Indiana.” IC 6-3-1-13. See also 45 IAC 3.1-1-21. To compute an Indiana resident’s state income tax, the Indiana law references the Internal Revenue Code. IC 6-3-1-3.5(a) provides the starting point to determine the taxpayer’s taxable income and to calculate what would be the taxpayer’s Indiana income tax after applying certain additions and subtractions to that starting point. Throughout the protest process, Taxpayer claimed that he is a victim of identity theft, and he did not underreport his income. Taxpayer stated that since 2022, he has been working with various law enforcement and government agencies when he discovered his identity was stolen. Taxpayer submitted additional documents, including affidavits, police reports, and both Return Transcript and Account Transcript issued by the Internal Revenue Service to support his protest. Based on the verifiable supporting documents provided, the Department is prepared to agree that Taxpayer did not underreport his income for the tax year in question. Pursuant to IC 6-8.1-5-1, Taxpayer met his burden of proof, demonstrating that the assessment was wrong. FINDING Taxpayer’s protest is sustained. June 6, 2025 Replaces Finding Document: New