in-20260729-IR-045260229NRA: LETTER OF FINDINGS: 01-20251181

DEPARTMENT OF STATE REVENUE LETTER OF FINDINGS: 01-20251181 Individual Income Tax For The Year 2021 HOLDING Individual established that the Department’s assessment for additional individual income tax was incorrect. ISSUE

I. Individual Income Tax – Assessment.

Authority: IC 6-3-1-3.5; IC 6-3-2-1; IC 6-8.1-5-1; Dept. of State Revenue v. Caterpillar, Inc., 15 N.E.3d 579 (Ind. 2014); Indiana Dept. of State Revenue v. Rent-A-Center East, Inc., 963 N.E.2d 463 (Ind. 2012); Lafayette Square Amoco, Inc. v. Indiana Dept. of State Revenue, 867 N.E.2d 289 (Ind. Tax Ct. 2007); 45 IAC 3.1-1-21; Income Tax Information Bulletin 28 (November 2016). Taxpayer protests the Department’s assessment of additional individual income tax. STATEMENT OF FACTS In tax year 2021, Taxpayer filed an Indiana Full-Year Resident Individual Return (“Form IT-40”). After review, the Indiana Department of Revenue (“Department”) determined she owed additional individual income tax and issued an assessment. Taxpayer filed a protest and sought a resolution without a hearing. This Letter of Findings is based on information provided by Taxpayer during the protest and a review of the Department’s records. This Letter of Findings results. Additional facts will be provided as necessary.

I. Individual Income Tax – Assessment.

DISCUSSION In tax year 2021, Taxpayer filed Form IT-40. The Department reviewed her return and assessed additional individual income tax based on information provided on the reported W-2s. Taxpayer disagreed with the assessment and initiated a protest. As a threshold issue, it is Taxpayer’s responsibility to establish that the existing tax assessment is incorrect. As stated in IC 6-8.1-5-1(c), “[t]he notice of proposed assessment is prima facie evidence that the [D]epartment’s claim for the unpaid tax is valid . . . [t]he burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.” 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). Consequently, a taxpayer is required to provide documentation explaining and supporting his or her challenge that the Department’s position is wrong. Further, “[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). Indiana imposes a 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. IC 6-3-1-3.5(a) provides the starting point in determining the taxpayer’s taxable income and calculating what would be their Indiana income tax after applying any particular additions and subtractions. The statute provides in part that Indiana adjusted gross income starts with “‘adjusted gross income’ (as defined in Section 62 of the Internal Revenue Code) . . . ” Id. The Department received information indicating Taxpayer’s adjusted gross income was higher than reported on her return. As a result, the Department assessed additional individual income tax. Taxpayer disagreed and initiated a protest. Taxpayer provided a letter from her employer that provided an explanation of her income and confirmed that her income was approximately $72,000. Taxpayer also explained that her employer changed payroll systems mid-year, and she was incorrectly issued three W-2s, each of which reported a different amount of income. After reviewing the documentation supplied in the protest process, the Department agrees that Taxpayer has established that the income she reported on her originally filed return is correct. The Department will adjust Taxpayer’s account to reflect the correct adjusted gross income. Taxpayer’s protest is therefore sustained. FINDING Taxpayer’s protest is sustained. May 27, 2026 Replaces Finding Document: New