CHAPTER 5. ASSESSMENT OF TAXES
IC 6-8.1-5
Chapter 5. Assessment of Taxes
IC 6-8.1-5-1
Proposed assessment; notice; protest; hearing; letter of findings;
rehearing; appeal; demand for payment
Sec. 1. (a) As used in this section, "letter of findings" includes a
supplemental letter of findings.
(b) 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 department. The amount of the
assessment is considered a tax payment not made by the due date and
is subject to IC 6-8.1-10 concerning the imposition of penalties and
interest. The department shall send the person a notice of the
proposed assessment through the United States mail.
(c) If the person has a surety bond guaranteeing payment of the
tax for which the proposed assessment is made, the department shall
furnish a copy of the proposed assessment to the surety. The notice
of proposed assessment is prima facie evidence that the department's
claim for the unpaid tax is valid. The burden of proving that the
proposed assessment is wrong rests with the person against whom the
proposed assessment is made.
(d) The notice shall state that the person has forty-five (45) days
from the date the notice is mailed to pay the assessment or to file a
written protest. If the person files a protest and requires a hearing on
the protest, the department shall:
(1) set the hearing at the department's earliest convenient time;
and
(2) notify the person by United States mail of the time, date, and
location of the hearing.
(e) The department may hold the hearing at the location of its
choice within Indiana if that location complies with IC 6-8.1-3-8.5.
(f) No later than sixty (60) days after conducting a hearing on a
protest, or after making a decision on a protest when no hearing is
requested, the department shall issue a letter of findings and shall
send a copy of the letter through the United States mail to the person
who filed the protest and to the person's surety, if the surety was
notified of the proposed assessment under subsection (b). The
department may continue the hearing until a later date if the taxpayer
presents additional information at the hearing or the taxpayer
requests an opportunity to present additional information after the
hearing.
(g) A person that disagrees with a decision in a letter of findings
may request a rehearing not more than thirty (30) days after the date
on which the letter of findings is issued by the department. The
department shall consider the request and may grant the rehearing if
the department reasonably believes that a rehearing would be in the
best interests of the taxpayer and the state.
(h) If a person disagrees with a decision in a letter of findings, the
person may appeal the decision to the tax court. However, the tax
court does not have jurisdiction to hear an appeal that is filed more
than sixty (60) days after the date on which:
(1) the letter of findings is issued by the department, if the
person does not make a timely request for a rehearing under
subsection (g) on the letter of findings; or
(2) the department issues a denial of the person's timely request
for a rehearing under subsection (g) on the letter of findings.
(i) The tax court shall hear an appeal under subsection (h) de novo
and without a jury. The tax court may do the following:
(1) Uphold or deny any part of the assessment that is appealed.
(2) Assess the court costs in a manner that the court believes to
be equitable.
(3) Enjoin the collection of a listed tax under IC 33-26-6-2.
(j) The department shall demand payment, as provided in
IC 6-8.1-8-2(a), of any part of the proposed tax assessment, interest,
and penalties that it finds owing because:
(1) the person failed to properly respond within the forty-five
(45) day period;
(2) the person requested a hearing but failed to appear at that
hearing; or
(3) after consideration of the evidence presented in the protest
or hearing, the department finds that the person still owes tax.
(k) The department shall make the demand for payment in the
manner provided in IC 6-8.1-8-2.
(l) Subsection (b) does not apply to a motor carrier fuel tax return.
As added by Acts 1980, P.L.61, SEC.1. Amended by
P.L.332-1989(ss), SEC.28; P.L.60-1990, SEC.12; P.L.71-1993,
SEC.17; P.L.98-2004, SEC.73; P.L.111-2006, SEC.4; P.L.1-2007,
SEC.67.
IC 6-8.1-5-2
Time limitation on issuance of proposed assessment; extension;
erroneous refunds
Sec. 2. (a) Except as otherwise provided in this section, the
department may not issue a proposed assessment under section 1 of
this chapter more than three (3) years after the latest of the date the
return is filed, or either of the following:
(1) The due date of the return.
(2) In the case of a return filed for the state gross retail or use
tax, the gasoline tax, the special fuel tax, the motor carrier fuel
tax, the oil inspection fee, or the petroleum severance tax, the
end of the calendar year which contains the taxable period for
which the return is filed.
(b) If a person files a utility receipts tax return (IC 6-2.3), an
adjusted gross income tax (IC 6-3), supplemental net income tax (IC
6-3-8) (repealed), county adjusted gross income tax (IC 6-3.5-1.1),
county option income tax (IC 6-3.5-6), or financial institutions tax
(IC 6-5.5) return that understates the person's income, as that term is
defined in the particular income tax law, by at least twenty-five
percent (25%), the proposed assessment limitation is six (6) years
instead of the three (3) years provided in subsection (a).
(c) In the case of the motor vehicle excise tax (IC 6-6-5), the tax
shall be assessed as provided in IC 6-6-5-5 and IC 6-6-5-6 and shall
include the penalties and interest due on all listed taxes not paid by
the due date. A person that fails to properly register a vehicle as
required by IC 9-18 and pay the tax due under IC 6-6-5 is considered
to have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposed
under IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5
and shall include the penalties and interest due on all listed taxes not
paid by the due date. A person that fails to properly register a
commercial vehicle as required by IC 9-18 and pay the tax due under
IC 6-6-5.5 is considered to have failed to file a return for purposes of
this article.
(e) In the case of the excise tax imposed on recreational vehicles
and truck campers under IC 6-6-5.1, the tax shall be assessed as
provided in IC 6-6-5.1 and must include the penalties and interest
due on all listed taxes not paid by the due date. A person who fails
to properly register a recreational vehicle as required by IC 9-18 and
pay the tax due under IC 6-6-5.1 is considered to have failed to file
a return for purposes of this article. A person who fails to pay the tax
due under IC 6-6-5.1 on a truck camper is considered to have failed
to file a return for purposes of this article.
(f) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit
within which the department must issue its proposed assessment.
(g) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued:
(1) within two (2) years after making the refund; or
(2) within five (5) years after making the refund if the refund
was induced by fraud or misrepresentation.
(h) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment time period, the period may be extended according
to the terms of a written agreement signed by both the department
and the person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person's
records until the extension terminates.
The department and a person may agree to more than one (1)
extension under this subsection.
(i) If a taxpayer's federal income tax liability for a taxable year is
modified due to the assessment of a federal deficiency or the filing
of an amended federal income tax return, then the date by which the
department must issue a proposed assessment under section 1 of this
chapter for tax imposed under IC 6-3 is extended to six (6) months
after the date on which the notice of modification is filed with the
department by the taxpayer.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.73-1983,
SEC.16; P.L.82-1983, SEC.11; P.L.76-1985, SEC.6;
P.L.335-1989(ss), SEC.19; P.L.347-1989(ss), SEC.18; P.L.2-1991,
SEC.55; P.L.28-1997, SEC.26; P.L.181-1999, SEC.6;
P.L.192-2002(ss), SEC.143; P.L.131-2008, SEC.28;
P.L.182-2009(ss), SEC.251.
IC 6-8.1-5-2.5
Correcting assessment notice; responsible party; exemption from
time limitations
Sec. 2.5. (a) If the department determines that a proposed
assessment notice includes an individual who is not responsible for
the tax liability, a new assessment may be made naming only the
taxpayer that is responsible for the tax liability.
(b) For assessments made under subsection (a), the time limitation
for assessments in section 2 of this chapter does not apply.
As added by P.L.254-2003, SEC.10.
IC 6-8.1-5-3
Jeopardy assessment; jeopardy tax warrant; levy and sale; bond
Sec. 3. (a) If at any time the department finds that a person owing
taxes intends to quickly leave the state, remove his property from the
state, conceal his property in the state, or do any other act that would
jeopardize the collection of those taxes, the department may declare
the person's tax period at an end, may immediately make an
assessment for the taxes owing, and may demand immediate payment
of the amount due, without providing the notice required in
IC 6-8.1-8-2.
(b) If the department has sent a notice of proposed assessment
under section 1 of this chapter to a taxpayer by United States mail
and the notice is returned to the department because the taxpayer has
moved and the department is unable to determine the taxpayer's new
address, the department may:
(1) declare the person's tax period at an end;
(2) immediately make an assessment for the taxes owing; and
(3) demand immediate payment of the amount due;
without providing the notice required in IC 6-8.1-8-2.
(c) If the payment is not made immediately, the department may
issue or request the state police department to serve a jeopardy tax
warrant against the person and, either without or with the assistance
of the sheriffs of any counties in the state, may levy on and sell the
person's property which is located in those counties. In place of the
levy and sale procedure, the department may accept from the person
a bond for the payment of the taxes, if the bond is in an amount at
least equal to the amount of the total liability and if the bond is
through a surety acceptable to the department.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.26-1985,
SEC.14; P.L.129-2001, SEC.21.
IC 6-8.1-5-4
Books and records; federal returns; inspection
Sec. 4. (a) Every person subject to a listed tax must keep books
and records so that the department can determine the amount, if any,
of the person's liability for that tax by reviewing those books and
records. The records referred to in this subsection include all source
documents necessary to determine the tax, including invoices,
register tapes, receipts, and canceled checks.
(b) A person must retain the books and records described in
subsection (a), and any state or federal tax return that the person has
filed:
(1) for an unlimited period, if the person fails to file a return or
receives notice from the department that the person has filed a
suspected fraudulent return, or an unsigned or substantially
blank return; or
(2) in all other cases, for a period of at least three (3) years after
the date the final payment of the particular tax liability was due,
unless after an audit, the department consents to earlier
destruction.
In addition, if the limitation on assessments provided in section 2 of
this chapter is extended beyond three (3) years for a particular tax
liability, the person must retain the books and records until the
assessment period is over.
(c) A person must allow inspection of the books and records and
returns by the department or its authorized agents at all reasonable
times.
(d) A person must, on request by the department, furnish a copy
of any federal returns that he has filed.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.6-1987,
SEC.11; P.L.71-1993, SEC.18.
IC 6-8.1-5-5
Reserved
IC 6-8.1-5-6
Motor carrier fuel tax and surcharge tax; records or reports; audits or
examinations; reimbursement
Sec. 6. (a) If a record or report maintained outside Indiana is
required by the department with respect to the administration or
collection of the motor carrier fuel tax and surcharge tax under
IC 6-6-4.1, the department may require the taxpayer or carrier to
make the record or report available at a location in Indiana.
(b) If a taxpayer or carrier fails to make a report or record
available to the department at a location in Indiana, the department
may require the taxpayer or carrier to reimburse the department in an
amount equal to:
(1) the per diem paid to state employees multiplied by the
number of days attributable to the audit or examination,
including travel days; plus
(2) the lesser of:
(A) the expenses incurred by the department for lodging and
travel; or
(B) four (4) times the amount determined under subdivision
(1).
(c) A reimbursement received by the department under this
section shall be used by the department to pay the expenses incurred
in conducting out-of-state audits and examinations.
As added by P.L.8-1988, SEC.8.