COA: Case belongs in Tax Court

September 30, 2015

A company owner seeking relief from a tax judgment should not have filed in county court, but with the Indiana Tax Court, the Court of Appeals concluded Wednesday. It ordered the case dismissed on jurisdictional grounds.

Michael W. Troyan and MT Management LLC argued the Indiana Department of Revenue wrongly assessed withholding tax against his limited liability company. A document was filed with the DOR that had MT Management’s unique federal tax identification number but listed the business name as Mount Management. The document declared that the company had begun withholding taxes from an Indiana resident or employee.

This required MT Management to pay withholding taxes and report the amount withheld since its federal tax ID number was used, but it did not. This led to unpaid assessments being converted to a judgment against MT Management and Troyan. Then he and the company filed a complaint for injunctive relief and damages, requesting the release of a levy placed on MT Management’s funds in a bank account. The levy was released, but the trial court denied the request for temporary restraining order and injunction.

“Here, Troyan and MT Management allege that the tax assessment is improper because the DOR is attempting to collect from them a tax obligation of another entity, ‘Mount Management.’ This claim clearly involves the challenge to a collection of a tax or assessment, which is within the exclusive jurisdiction of the Tax Court,” Senior Judge Randall Shepard wrote in Michael W. Troyan and MT Management, LLC v. The Commissioner of the Indiana Department of Revenue, et al., 49A02-1411-PL-794. “To be sure, when an unpaid tax assessment is reduced to judgment, a circuit or superior court acquires jurisdiction for the limited purpose of enforcing the judgment, but Troyan and MT Management asked the Marion Superior Court for relief in excess of that limited power.”

“The trial court may well have been right as a matter of injunction law, but we remand this matter for dismissal on jurisdictional grounds.”


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