in-20260729-IR-045260236NRA: LETTER OF FINDINGS: 02-20210039

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 02-20210039 Corporate Income Tax For The Year 2019 HOLDING Out-of-state C Corporation failed to establish the Department’s assessment was incorrect as to the Underpayment of Estimated Tax Penalty. However, Out-of-state C Corporation demonstrated that the Late Payment Penalty should be waived. ISSUE

II. Corporate Income Tax – Late Payment Penalty.

Authority: IC 6-8.1-5-1; IC 6-8.1-6-1; IC 6-8.1-10-2.1. Taxpayer protests the assessment of additional Indiana C Corporation tax. STATEMENT OF FACTS Taxpayer is an out-of-state C Corporation that was registered to do business in Indiana in 2019. In December of 2020, the Indiana Department of Revenue (“Department”) issued Taxpayer a Notice of Proposed Assessment (“NOPA”) for Tax Year 2019 indicating that Taxpayer owed additional Indiana income tax for the 2019 tax year. Taxpayer protested the assessment and requested resolution without an administrative hearing. This Letter of Findings is based on the information submitted by Taxpayer as part of the protest and a review of the Department’s records. Additional facts will be provided as necessary.

I. Corporate Income Tax – Underpayment of Estimated Tax Penalty.

DISCUSSION The Department notes that there are two separate penalties at issue in this protest. The first is in regard to the Estimated Tax Penalty. The second is in regard to the Late Payment Penalty. Issue I in this Letter of Findings will address the Estimated Tax Penalty. The Department determined in the NOPA that: 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); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289, 292 (Ind. Tax Ct. 2007). An assessment, including taxpayer’s penalty assessment, is therefore presumed valid. A taxpayer must provide documentation explaining and supporting that the Department’s position is wrong. Additionally, “[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). Regarding penalties related to estimated payments, IC 6-3-4-4.1(b) provides: In turn, IC 6-8.1-10-2.1(b) states: Taxpayer’s protest letter states: For the 2019 Tax year, Taxpayer was required to remit the lesser of one-fourth of the 2018 liability or the 2019 liability by April 22, 2019, June 20, 2019, September 20, 2019, and December 20, 2019. According to the Department’s records, the only estimated payment during that period was a payment of $28,400 on December 9, 2019. Therefore, Taxpayer did meet the filing and payment requirement for the fourth quarter payment itself. Thus, for the first three payments, there was no payment, and the fourth quarter payment was insufficient to meet the 90 percent overall estimated tax payment threshold. Therefore, Taxpayer has not carried their burden to show that the Department’s assessment of Estimated Tax Penalty was incorrect as provided under IC 6-8.1-5-1(c). FINDING Taxpayer’s protest is denied.

II. Corporate Income Tax – Late Payment Penalty.

DISCUSSION As noted in Issue I, Taxpayer argued “[t]he 2019 liability for the taxpayer is $130,116. The taxpayer paid the estimated payment of $28,400 at the fourth quarter, and the extension payment of $97,600 at the extension, which met the threshold, thus we should also avoid a late payment penalty.” According to the Department’s records, Taxpayer was required to pay 90 percent of their 2019 liability by the return date of August 17, 2020, and the remaining balance plus interest by the extended due date of November 16, 2020. IC 6-8.1-10-2.1. Taxpayer paid $28,400 on December 9, 2020, and $97,600 on July 7, 2020. Those payments made by the Taxpayer are more than 90 percent of the liability. Following those payments, Taxpayer had a balance of $7,217 plus interest at 4 percent from August 17, 2020, through November 10, 2020. On November 10, 2020, Taxpayer made a payment of $7,312 which was more than the total amount due. Thus, Taxpayer met the 90 percent threshold under IC 6-8.1-6-1 and paid the balance with interest. Taxpayer has carried their burden to show that the Department’s assessment of the Late Payment Penalty was incorrect as provided under IC 6-8.1-5-1(c). FINDING Taxpayer’s protest is sustained. CONCLUSION Following a review of the documents submitted by the Taxpayer and the Departments records, Taxpayers protest is sustained as to the Late Payment Penalty. However, Taxpayers protest is denied for the underpayment of Estimated Tax Penalty. May 26, 2026 Replaces Finding Document: New