in-20260729-IR-045260234NRA: FINAL ORDER DENYING REFUND: 01-20251765

DEPARTMENT OF STATE REVENUE FINAL ORDER DENYING REFUND: 01-20251765 Indiana Individual Income Tax For The Tax Year 2023 HOLDING Individual failed to substantiate that he was entitled to a refund of income tax. ISSUE

I. Income Tax – Refund.

Authority: IC 6-3-1-3.5; IC 6-3-1-12; IC 6-3-1-13; IC 6-3-2-1; IC 6-3-2-2; IC 6-3-3-3; IC 6-3-4-8; IC 6-3.6-8-3; IC 6-8.1-5-4; IC 6-8.1-9-1; Stinson Est. v. United States, 214 F.3d 846, 848 (7th Cir. 2000); Indiana Dep’t 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); Express Scripts Inc. v. Indiana Dep’t of State Revenue, 170 N.E.3d 273 (Ind. Tax Ct. 2021); Wendt LLP v. Indiana Dep’t of State Revenue, 977 N.E.2d 480 (Ind. Tax Ct. 2012); Scopelite v. Indiana Dep’t of Local Gov’t Fin., 939 N.E.2d 1138 (Ind. Tax Ct. 2010); Indiana Dep’t of State Revenue, Sales Tax Division v. RCA Corp., 310 N.E.2d 100 (Ind. Ct. App. 1974); 45 IAC 3.1-1-22.5; 45 IAC 3.1-1-23; 45 IAC 3.1-1-25; 45 IAC 3.1-1-97; 45 IAC 15-9-2. Taxpayer claimed that he was entitled to a tax refund because he was not an Indiana resident. STATEMENT OF FACTS Taxpayer is an individual who filed an amended nonresident return (Form IT-40PNR) for the tax year 2023 to request a refund in 2024. Previously, Taxpayer filed the Indiana full-year resident returns (Form IT-40), including the tax year 2023. The Indiana Department of Revenue (“Department”) reviewed and denied Taxpayer’s refund claim in November 2024. Taxpayer protested the refund denial. Taxpayer requested that the Department make the final determination without an administrative hearing based on the documents submitted. This final determination ensues.

I. Income Tax – Refund.

DISCUSSION Taxpayer claimed that the Department erred in denying his refund because he was not an Indiana resident and his income was not attributable to an Indiana source. The issue is whether Taxpayer demonstrated that he was entitled to a refund for 2023. Pursuant to IC 6-8.1-9-1(a), if a person has paid more tax than the person determines is legally due for a particular taxable period, the person may file a claim for a refund with the Department subject to applicable statute of limitations. The Department “has no legal method of generating a claim for refund. A claim for refund can only be initiated pursuant to IC [§] 6-8.1-9-1.” 45 IAC 15-9-2(b). Also, IC 6-8.1-5-4(a) states that “[e]very person subject to a listed tax must keep books and records so that the [D]epartment can determine the amount, if any, of the person’s liability for that tax by reviewing those books and records. The records . . . include all source documents necessary to determine the tax, including invoices, register tapes, receipts, and canceled checks.” The person also “must allow inspection of the books and records and returns by the [D]epartment or its authorized agents at all reasonable times.” IC 6-8.1-5-4(c). Crucially, “each tax year stands alone.” Miller Brewing Co. v. Indiana Dep’t of State Revenue, 903 N.E.2d 64, 69 (Ind. 2009). When submitting evidence as part of his protest, the taxpayer needs to specify and explain the portions of the evidence that he 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 Revenue v. Caterpillar, Inc., 15 N.E.3d 579, 583 (Ind. 2014). 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). In addition, Indiana imposes an adjusted gross income tax “upon 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). The Indiana statute refers to the Internal Revenue Code to compute what is considered the taxpayer’s Indiana income tax. A resident’s income is determined by starting with the federal adjusted gross income and making certain adjustments. IC 6-3-1-3.5. The “adjusted gross income derived from sources within Indiana” is provided under IC 6-3-2-2. A “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.” A “nonresident” is “any person who is not a resident of Indiana.” IC 6-3-1-13. As a general rule, 45 IAC 3.1-1-22.5, in part, explains: If a taxpayer “who, on or before the last day of the taxable year, changes his [or her] residence or domicile from Indiana to a place without Indiana, with the intent of abiding permanently without Indiana, is subject to adjusted gross income tax on all taxable income earned while an Indiana resident.” 45 IAC 3.1-1-23(2). “Indiana will not tax income of a taxpayer who moves from Indiana and becomes an actual domiciliary of another state or country except that income received from Indiana sources will continue to be taxable.” Id. But, for county income tax purposes, IC 6-3.6-8-3(b) states: Further, 45 IAC 3.1-1-25, in part, provides “[i]n order to qualify as a nonresident, the taxpayer shall submit proof, upon demand by the department, of having indicated his bona fide intention to reside permanently elsewhere before the last day of the taxable year.” Therefore, as of January 1 each year, if a taxpayer resides in an Indiana county, the taxpayer is deemed an Indiana resident for that year and his or her income is subject to that Indiana county income tax. As of January 1 each year, if the taxpayer works for an employer within a county in Indiana, the employer is required to “withhold, collect, and pay over income tax on wages paid by such employer to such employee” pursuant to IC 6-3-4-8(a). The employer is a withholding agent for the state of Indiana and “shall make return of and payment to the Department [] tax due, for either County and State.” 45 IAC 3.1-1-97. A taxpayer may be able to claim certain deductions or credits. For example, an Indiana resident may be permitted to claim a credit for taxes he paid to other states pursuant to IC 6-3-3-3(a), which provides: Statutory provisions dealing with deductions or credits are “matters of legislative grace.” Stinson Est. v. United States, 214 F.3d 846, 848 (7th Cir. 2000). The taxpayer thus bears the burden of proof to substantiate his claim for such tax deductions or credits. To that end, the taxpayer is required to provide documentation to explain and support his claim. Where such deduction is claimed, “the party claiming the same must show a case, by sufficient evidence, which is clearly within the exact letter of the law.” Indiana Dep’t of State Revenue, Sales Tax Division v. RCA Corp., 310 N.E.2d 96, 100 (Ind. Ct. App. 1974). The Department denied Taxpayer’s refund claim and explained, in part, the following: The Department determined that Taxpayer was not entitled to the refund because he has been an Indiana resident and his income was subject to Indiana state and county income taxes. In other words, the Department found that Taxpayer maintained his Indiana residence and his Indiana Driver’s license and has been an Indiana resident. Taxpayer disagreed and seemingly suggested that the Department erred in denying his refund because for the tax year 2023, he was not an Indiana resident and his income was not subject to Indiana state and county income tax. In his May 29, 2024, letter, Taxpayer stated in part: Taxpayer offered a copy of his W-2 Wage and Tax Statement (“W-2”) and the amended return (IT-40PNR) for 2023 to support his protest. As mentioned, the issue is whether Taxpayer demonstrated that he was entitled to a refund for 2023 because he was not an Indiana resident and his income was not subject to Indiana state and county income tax. Taxpayer claimed that during 2023, he worked in Mississippi and stayed in a hotel in Mississippi. Taxpayer offered his W-2 and the amended return, IT-40PNR, to support his claim for refund. Upon review, however, Taxpayer’s reliance of his documents is misplaced. In this case, publicly verifiable information showed that prior to the tax year 2023, Taxpayer has lived and worked in Indiana and filed his Indiana resident returns. Thus, there is a rebuttal presumption that Taxpayer was an Indiana resident and his income was subject to Indiana state and county income taxes. Taxpayer stated that he worked in Mississippi and lived in a hotel in Mississippi during 2023. But he did not establish that his hotel stay met the legal requirements of abandoning his Indiana domicile or residence and establishing a new one in Mississippi. Rather, Taxpayer’s documents and publicly verifiable information demonstrated that Taxpayer continued to keep his Indiana Driver’s license and “assigned or maintained a mailing address” in Indiana. As such, Taxpayer was an Indiana resident for 2023 and his income was subject to Indiana income tax for income tax purposes. The Department thus is not able to agree that Taxpayer was entitled to the refund. It should be noted that Taxpayer seemingly suggested that his W-2 income was attributable to a  Mississippi source. Pursuant to IC 6-3-3-3(a), Taxpayer might be able to claim a refund based on a credit for the income taxes he paid to Mississippi. But Taxpayer did not raise the issue and did not offer any documents to substantiate such credit during the protest. Thus, it is beyond the scope of this protest. To conclude, given the totality of the circumstances, in the absence of other verifiable supporting documents to rebut the above-mentioned presumption, Taxpayer was an Indiana resident and his income was subject to Indiana state and county income tax. As such, the Department is not able to agree that Taxpayer was entitled to the refund. FINDING Taxpayer’s protest is respectfully denied. May 1, 2026 Replaces Finding Document: New