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. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues