ILNews

Justices: Tax Court erred in prima facie showing requirement

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Supreme Court has found that the Indiana Tax Court erred in requiring the state revenue department to produce more evidence of a proposed assessment of additional tax liability for a corporation. The justices reversed and remanded Indiana Department of State Revenue v. Rent-A-Center East, Inc., No. 49S10-1112-TA-683.

The Tax Court in May denied the revenue department’s motion for summary judgment and granted one in favor of Rent-A-Center East. The department failed to designate any facts to show it complied with Indiana Code 6-3-2-2(p), so it had not made a prima facie case that it is entitled to judgment as a matter of law regarding whether the department should consider alternatives to assessing tax based on a combined return.

But the justices determined the Tax Court incorrectly applied the combined scheme of state statute and trial rule requirements to the case.

Judge Martha Wentworth construed the tax statutes to require the revenue department to make its Trial Rule 56(C) prima facie showing by designating facts material to RAC East’s separate return from 2003 on income sources and the use of combined income tax return being reasonable and equitable. Then, the court denied the department’s motion after finding it didn’t comply with Indiana Code 6-3-2-2(p).

“We conclude that Section 6-3-2-2(p) and Trial Rule 56 must function together in a different way,” Chief Justice Randall Shepard wrote.

The justices found that the department may make a proposed assessment only if it reasonably believes that a person has not reported the proper amount of tax due, and it makes its assessment on the basis of the best information available. The General Assembly has provided that the notice of proposed assessment is prima facie evidence that the department’s claim for the unpaid tax is valid, Shepard wrote, so the burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.

“Nothing in the text of Section 6-3-2-2(p) indicates that the General Assembly intended it to trump the presumption of validity given to the proposed assessment, nor do we think it proper for a taxpayer resisting such an assessment simply to cite subsection (p) as a means of vitiating the Department’s prima facie showing.” Shepard wrote. “Rather, Section 6-3-2-2(p) reflects the Legislature’s codification of a rule of decision with respect to when a combined income tax return may permissibly be required. It serves as the evidentiary bar that must be evaluated at the end of the summary judgment analysis (or trial process), not a threshold over which the Department must pass at the beginning.”

The case is remanded to Wentworth to consider summary judgment motions on their merits in light of all the designated evidence the parties may tender.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

ADVERTISEMENT