Lack of jurisdiction leads to Tax Court dismissal

A jurisdictional barrier has led the Indiana Tax Court to dismiss a case brought by a religious nonprofit.

In its petition, the Diocese of Newton for the Melkites in the USA Inc. argued that on March 25, 2014, it negotiated a settlement agreement with the Lake County treasurer and auditor to remove penalties from delinquent taxes owed on land located in Hammond, as well as to remove the property from the auditor’s tax sale. Additionally, the Diocese asserted that on the same date, it remitted the funds agreed to in the settlement agreement, but despite its performance, the treasurer and auditor did not properly apply the funds and remove the penalties to which they agreed.

Since the Diocese believed “it had a valid enforceable agreement with the Defendants, [it believed it] was precluded from exercising its right to participate in the Tax Amnesty Program provided for in I.C. 6-8.1-3-17(c) which occurred [in the Fall of] of 2015.” Thus, it requested that the Tax Court enter “judgment against Defendants in an amount commensurate with its damages, an[d issue an] Order compelling Defendants[’] specific performance to avoid recurring fines and penalties plus costs and all other relief deemed just and proper in the premises.”

However, after the defendants filed a motion to dismiss for lack of subject matter jurisdiction, the Indiana Tax Court agreed and granted the motion to dismiss in Diocese of Newton for the Melkites in the USA, Inc. v. Peggy Holinga Katona, in Her Capacity as Lake County Treasurer, and John Petalas, in His Capacity as Lake County Auditor, 20T-TA-1.

“Here, the Diocese contends that its case arises under the tax laws of Indiana because it involves the interpretation, application, and enforcement of Indiana Code § 6-1.1-24-2, which allows the removal of property from being sold at a tax sale if the taxpayer and the county treasurer ‘agree to a mutually satisfactory arrangement’ for the payment of delinquent property taxes,” Judge Martha Blood Wentworth wrote in a Friday opinion. “The Diocese concedes, however, that its lawsuit does not derive from a final determination of the (Department of Revenue), the Indiana Board, or the (Department of Local Government Finance). Indeed, the Diocese acknowledges that it did not apply for review by any of those administrative agencies. … Consequently, the Diocese’s case is not an original tax appeal subject to this Court’s jurisdiction.”

Wentworth similarly rejected the Diocese’s assertion that I.C. 6-1.1-24-4.6 confers jurisdiction upon the Tax Court to hear the appeal and that “’the only court with competent jurisdiction to interpret and apply a tax statute is the Tax Court.’”

“Indiana Code § 33-26-3-3 instructs that in cases other than original tax appeals, ‘[t]he tax court does not have jurisdiction . . . unless . . . the tax court has otherwise been specifically assigned jurisdiction by statute.’ In other words, for a statute to confer jurisdiction upon the Tax Court, it must do so with specificity,” Wentworth wrote.

She therefore concluded that as I.C. § 33-26-3-3(2) provides, a statute cannot confer jurisdiction upon the Tax Court of limited jurisdiction unless the statutory language “specifically assigns jurisdiction” to the Tax Court.

“Because Indiana Code § 6-1.1-24-4.6(b) does not do so, it cannot confer subject matter jurisdiction to the Tax Court,” Wentworth concluded, dismissing the case.

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