in-20250730-IR-045250355NRA: DEPARTMENT OF STATE REVENUE

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS 01-20242384 Individual Income Tax For the Year 2023 HOLDING Individual demonstrated that she was entitled to a refund and the assessment was not correct. ISSUE

I. Individual Income Tax – Burden of Proof.

Authority: IC 6-3-1-12; IC 6-3-1-13; IC 6-3-2-1; IC 6-3-2-2; IC 6-8.1-5-1; IC 6-8.1-5-4; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Miller Brewing Co. v. Indiana Dep’t of State Revenue, 903 N.E.2d 64 (Ind. 2009); Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010). Taxpayer protests the refund denial and proposed assessment of individual income tax for 2023. STATEMENT OF FACTS Taxpayer is an individual who filed an Indiana nonresident income tax return to request a refund for 2023. The Indiana Department of Revenue (“Department”) reviewed and determined that based on the “2-digit county code” numbers provided, Taxpayer lived in an Indiana county on January 1, 2023. The Department adjusted Taxpayer’s filing, denied the refund, and assessed additional tax, penalty, and interest. Taxpayer protested. An administrative hearing was held. This final determination ensues. 

I. Individual Income Tax – Burden of Proof.

DISCUSSION The Department denied the refund and assessed additional tax, penalty, and interest. Taxpayer disagreed and argued that the assessment was wrong. 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 an adjusted gross income tax on “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). IC 6-3-2-2(a) provides what is income derived from Indiana sources and subject to Indiana income tax. The term “resident,” under IC 6-3-1-12, “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.” Nonresident is “any person who is not a resident of Indiana.” IC 6-3-1-13. Throughout the protest process, Taxpayer argued that she was entitled to the refund. Specifically, Taxpayer explained that she has been an Illinois resident and did not live or work in Indiana in 2023. Taxpayer asserted that for 2023, under her employment contracts, she was assigned to work in Wisconsin, Minnesota, and California. Taxpayer claimed that her employer erred in withholding and remitting the taxes to Indiana. In addition to her Illinois Driver’s License, Taxpayer offered documents including utility statements of her Illinois home, her federal and state income tax filings, her employment contracts and leases to demonstrate that she lived and worked in Illinois, Wisconsin, Minnesota, and California during 2023. Based on the above verifiable supporting documentation provided, the Department is prepared to agree that Taxpayer met her burden of proof demonstrating that she was entitled to the refund and the assessment was incorrect. FINDING Taxpayers’ protest is sustained. May 7, 2025 Replaces Finding Document: New