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Tax judge denies state's motion to dismiss

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The Indiana Tax Court has denied the state’s motion to dismiss a mother and daughter’s challenge to the jeopardy tax assessments made against them after the state found they didn’t pay taxes on their sales of puppies.

The Indiana Attorney General’s Office and the Department of State Revenue investigated Virginia and Kristin Garwood’s business activities involving selling puppies and found that they weren’t remitting sales and income tax due on the sales. The department served the Garwoods with 16 jeopardy tax assessments demanding immediate payment. They didn’t pay and the dogs were seized and sold.

The department filed a verified petition for proceedings supplemental in Harrison Circuit Court; the Garwoods timely protested their assessments to the department shortly thereafter. The department wrote a letter to the Garwoods telling them that the relief they want was best available in Harrison Circuit Court. The Garwoods then asked the Tax Court for a judicial review of the final determination by the department and to enjoin the collection of the pending tax.

The department filed a motion to dismiss under Indiana Trial Rule 12(B), arguing lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, failure to state a claim upon relief can be granted, and that the same action was pending in another court.

In Virginia Garwood, et al. v. Indiana Dept. of State Revenue No. 82T10-0906-TA-29, the Tax Court denied all of the department’s 12(B) motions, finding its arguments that Indiana Dept. of Revenue v. Deaton (Deaton II), 755 N.E.2d 568 (Ind. 2001) controls and that there is no appealable final determination in this case to be misplaced. Deaton II is distinguishable from the instant case and it simply suggests that the jeopardy tax warrants at issue in this case have not attained the status of “judgments,” wrote Judge Thomas Fisher.

Also, the judge rejected the departments’ argument that the Garwoods’ failure to file a claim for a refund with the department precludes their challenge before the Tax Court. The department claimed that a taxpayer must first pay the taxes assessed, request a refund, and then if they don’t like the outcome, seek judicial review.

Indiana Code Section 6-8.1-5-3 is silent as to the manner by which a taxpayer may challenge the validity of a jeopardy assessment, but the Indiana Supreme Court has held that taxpayers may challenge jeopardy assessments through the administrative procedures provided under I.C. Section 6-8.1-5-1, he wrote. In addition, the department’s own regulation allows taxpayers to protest a jeopardy assessment within 20 days after the assessment is made.

“Consequently, through its argument, the Department attempts to eliminate one administrative path to the Tax Court when there are actually at least two,” wrote the judge. “This Court, however, will not sanction such actions.”

The department assessed the Garwoods with liability for income and sales taxes under I.C. Section 6-8.1-1-1. They timely protested those assessments in conformity with Indiana Code and the department sent a letter, without holding a hearing, telling the Garwoods the relief they seek was in the Harrison Circuit Court.

“Therefore, for purposes of this case, the Department’s letter constituted a final determination. The Garwoods’ action is an original tax appeal; therefore, the Court denies the Department’s 12(B)(1) motion to dismiss,” he wrote.

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  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.

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