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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. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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  3. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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