ILNews

Trial court lacks jurisdiction in tax suit

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Tax Court is the proper venue for a suit filed by the state to recover an erroneous tax refund, the Indiana Court of Appeals affirmed today.

The Indiana Attorney General, on behalf of the state, filed a suit in Jackson Superior Court to recover a tax refund granted by the Indiana Department of Revenue to Aisin U.S.A. Manufacturing. The state believed the refund was erroneously granted due to a miscalculation of the refund owed to Aisin. Aisin had overpaid one year by more than $150,000; the DOR calculated that Aisin had overpaid by $1.07 million.

After discovering the error, the DOR sent a proposed assessment of how much Aisin actually owed due to the wrong credit amount. Aisin protested, but the DOR never held the requested hearing or issued a letter of findings. It instead cancelled the proposed assessment, but then a year it later tried to again recover the money. The state then filed the complaint in state court.

The trial court granted Aisin's motion to dismiss for lack of subject matter jurisdiction because the Tax Court has exclusive jurisdiction. On appeal in State of Indiana v. Aisin USA Mfg., Inc., No. 36A01-0909-CV-442, the state argued that it wasn't trying to collect a tax but just recover the money mistakenly refunded to Aisin.

But the mistake in which the state based its claim is a mistake in the calculation of a tax refund, wrote Judge Paul Mathias. The underlying core of the state's claims is an income tax issue that comes under the tax statutes.

The state also argued the Tax Court couldn't have jurisdiction because the DOR never entered a letter of findings. But the DOR was statutorily obligated to do so.

"We do not think that the DOR may unilaterally cancel a proposed tax assessment, fail to hold a hearing, and fail to issue a letter of findings in an attempt to deprive the Tax Court of jurisdiction, only to then attempt to litigate the issue in a trial court of general jurisdiction," wrote the judge.

The Tax Court has exclusive jurisdiction once the letter is issued. To hold otherwise would allow the DOR to avoid jurisdiction of the Tax Court by refusing to issue a letter of findings.

The state claimed that if it's not allowed to proceed in the trial court, it will be without recourse because the statute of limitations has expired.

"As Americans, and as Hoosiers, we take great pride in being a society of laws rather than of men," wrote Judge Mathias, noting that the Tax Court has held a taxpayer can't seek a refund for a tax period outside the statute of limitations. "We believe the same reasoning applies to the State when it seeks to recover an allegedly improper tax refund outside the relevant limitations period. To have any real meaning, statutes need to apply equally to the State as well as to its citizens."

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. It's an appreciable step taken by the government to curb the child abuse that are happening in the schools. Employees in the schools those are selected without background check can not be trusted. A thorough background check on the teachers or any other other new employees must be performed to choose the best and quality people. Those who are already employed in the past should also be checked for best precaution. The future of kids can be saved through this simple process. However, the checking process should be conducted by the help of a trusted background checking agency(https://www.affordablebackgroundchecks.com/).

  2. Almost everything connects to internet these days. From your computers and Smartphones to wearable gadgets and smart refrigerators in your home, everything is linked to the Internet. Although this convenience empowers usto access our personal devices from anywhere in the world such as an IP camera, it also deprives control of our online privacy. Cyber criminals, hackers, spies and everyone else has realized that we don’t have complete control on who can access our personal data. We have to take steps to to protect it like keeping Senseless password. Dont leave privacy unprotected. Check out this article for more ways: https://www.purevpn.com/blog/data-privacy-in-the-age-of-internet-of-things/

  3. You need to look into Celadon not paying sign on bonuses. We call get the run

  4. My parents took advantage of the fact that I was homeless in 2012 and went to court and got Legal Guardianship I my 2 daughters. I am finally back on my feet and want them back, but now they want to fight me on it. I want to raise my children and have them almost all the time on the weekends. Mynparents are both almost 70 years old and they play favorites which bothers me a lot. Do I have a leg to stand on if I go to court to terminate lehal guardianship? My kids want to live with me and I want to raise them, this was supposed to be temporary, and now it is turning into a fight. Ridiculous

  5. Here's my two cents. While in Texas in 2007 I was not registered because I only had to do it for ten years. So imagine my surprise as I find myself forced to register in Texas because indiana can't get their head out of their butt long enough to realize they passed an ex post facto law in 2006. So because Indiana had me listed as a failure to register Texas said I had to do it there. Now if Indiana had done right by me all along I wouldn't need the aclu to defend my rights. But such is life.

ADVERTISEMENT