CHAPTER 5. ASSESSMENT OF TAXES
IC 6-8.1-5
Chapter 5. Assessment of Taxes
IC 6-8.1-5-1
Proposed assessment; notice; protest; hearing; letter of findings;rehearing; appeal; demand for payment
Sec. 1. (a) As used in this section, "letter of findings" includes asupplemental letter of findings.
(b) If the department reasonably believes that a person has notreported the proper amount of tax due, the department shall make aproposed assessment of the amount of the unpaid tax on the basis ofthe best information available to the department. The amount of theassessment is considered a tax payment not made by the due date andis subject to IC 6-8.1-10 concerning the imposition of penalties andinterest. The department shall send the person a notice of theproposed assessment through the United States mail.
(c) If the person has a surety bond guaranteeing payment of thetax for which the proposed assessment is made, the department shallfurnish a copy of the proposed assessment to the surety. The noticeof proposed assessment is prima facie evidence that the department'sclaim for the unpaid tax is valid. The burden of proving that theproposed assessment is wrong rests with the person against whom theproposed assessment is made.
(d) The notice shall state that the person has forty-five (45) daysfrom the date the notice is mailed to pay the assessment or to file awritten protest. If the person files a protest and requires a hearing onthe protest, the department shall:
(1) set the hearing at the department's earliest convenient time;and
(2) notify the person by United States mail of the time, date, andlocation of the hearing.
(e) The department may hold the hearing at the location of itschoice within Indiana if that location complies with IC 6-8.1-3-8.5.
(f) No later than sixty (60) days after conducting a hearing on aprotest, or after making a decision on a protest when no hearing isrequested, the department shall issue a letter of findings and shallsend a copy of the letter through the United States mail to the personwho filed the protest and to the person's surety, if the surety wasnotified of the proposed assessment under subsection (b). Thedepartment may continue the hearing until a later date if the taxpayerpresents additional information at the hearing or the taxpayerrequests an opportunity to present additional information after thehearing.
(g) A person that disagrees with a decision in a letter of findingsmay request a rehearing not more than thirty (30) days after the dateon which the letter of findings is issued by the department. Thedepartment shall consider the request and may grant the rehearing ifthe department reasonably believes that a rehearing would be in thebest interests of the taxpayer and the state.
(h) If a person disagrees with a decision in a letter of findings, the
person may appeal the decision to the tax court. However, the taxcourt does not have jurisdiction to hear an appeal that is filed morethan sixty (60) days after the date on which:
(1) the letter of findings is issued by the department, if theperson does not make a timely request for a rehearing undersubsection (g) on the letter of findings; or
(2) the department issues a denial of the person's timely requestfor a rehearing under subsection (g) on the letter of findings.
(i) The tax court shall hear an appeal under subsection (h) de novoand without a jury. The tax court may do the following:
(1) Uphold or deny any part of the assessment that is appealed.
(2) Assess the court costs in a manner that the court believes tobe equitable.
(3) Enjoin the collection of a listed tax under IC 33-26-6-2.
(j) The department shall demand payment, as provided inIC 6-8.1-8-2(a), of any part of the proposed tax assessment, interest,and penalties that it finds owing because:
(1) the person failed to properly respond within the forty-five(45) day period;
(2) the person requested a hearing but failed to appear at thathearing; or
(3) after consideration of the evidence presented in the protestor hearing, the department finds that the person still owes tax.
(k) The department shall make the demand for payment in themanner provided in IC 6-8.1-8-2.
(l) Subsection (b) does not apply to a motor carrier fuel tax return.
As added by Acts 1980, P.L.61, SEC.1. Amended byP.L.332-1989(ss), SEC.28; P.L.60-1990, SEC.12; P.L.71-1993,SEC.17; P.L.98-2004, SEC.73; P.L.111-2006, SEC.4; P.L.1-2007,SEC.67.
IC 6-8.1-5-2
Time limitation on issuance of proposed assessment; extension;erroneous refunds
Sec. 2. (a) Except as otherwise provided in this section, thedepartment may not issue a proposed assessment under section 1 ofthis chapter more than three (3) years after the latest of the date thereturn is filed, or either of the following:
(1) The due date of the return.
(2) In the case of a return filed for the state gross retail or usetax, the gasoline tax, the special fuel tax, the motor carrier fueltax, the oil inspection fee, or the petroleum severance tax, theend of the calendar year which contains the taxable period forwhich the return is filed.
(b) If a person files a utility receipts tax return (IC 6-2.3), anadjusted gross income tax (IC 6-3), supplemental net income tax (IC6-3-8) (repealed), county adjusted gross income tax (IC 6-3.5-1.1),county option income tax (IC 6-3.5-6), or financial institutions tax(IC 6-5.5) return that understates the person's income, as that term isdefined in the particular income tax law, by at least twenty-five
percent (25%), the proposed assessment limitation is six (6) yearsinstead of the three (3) years provided in subsection (a).
(c) In the case of the motor vehicle excise tax (IC 6-6-5), the taxshall be assessed as provided in IC 6-6-5-5 and IC 6-6-5-6 and shallinclude the penalties and interest due on all listed taxes not paid bythe due date. A person that fails to properly register a vehicle asrequired by IC 9-18 and pay the tax due under IC 6-6-5 is consideredto have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposedunder IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5and shall include the penalties and interest due on all listed taxes notpaid by the due date. A person that fails to properly register acommercial vehicle as required by IC 9-18 and pay the tax due underIC 6-6-5.5 is considered to have failed to file a return for purposes ofthis article.
(e) In the case of the excise tax imposed on recreational vehiclesand truck campers under IC 6-6-5.1, the tax shall be assessed asprovided in IC 6-6-5.1 and must include the penalties and interestdue on all listed taxes not paid by the due date. A person who failsto properly register a recreational vehicle as required by IC 9-18 andpay the tax due under IC 6-6-5.1 is considered to have failed to filea return for purposes of this article. A person who fails to pay the taxdue under IC 6-6-5.1 on a truck camper is considered to have failedto file a return for purposes of this article.
(f) If a person files a fraudulent, unsigned, or substantially blankreturn, or if a person does not file a return, there is no time limitwithin which the department must issue its proposed assessment.
(g) If any part of a listed tax has been erroneously refunded by thedepartment, the erroneous refund may be recovered through theassessment procedures established in this chapter. An assessmentissued for an erroneous refund must be issued:
(1) within two (2) years after making the refund; or
(2) within five (5) years after making the refund if the refundwas induced by fraud or misrepresentation.
(h) If, before the end of the time within which the department maymake an assessment, the department and the person agree to extendthat assessment time period, the period may be extended accordingto the terms of a written agreement signed by both the departmentand the person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person'srecords until the extension terminates.
The department and a person may agree to more than one (1)extension under this subsection.
(i) If a taxpayer's federal income tax liability for a taxable year ismodified due to the assessment of a federal deficiency or the filingof an amended federal income tax return, then the date by which thedepartment must issue a proposed assessment under section 1 of thischapter for tax imposed under IC 6-3 is extended to six (6) monthsafter the date on which the notice of modification is filed with the
department by the taxpayer.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.73-1983,SEC.16; P.L.82-1983, SEC.11; P.L.76-1985, SEC.6;P.L.335-1989(ss), SEC.19; P.L.347-1989(ss), SEC.18; P.L.2-1991,SEC.55; P.L.28-1997, SEC.26; P.L.181-1999, SEC.6;P.L.192-2002(ss), SEC.143; P.L.131-2008, SEC.28;P.L.182-2009(ss), SEC.251.
IC 6-8.1-5-2.5
Correcting assessment notice; responsible party; exemption fromtime limitations
Sec. 2.5. (a) If the department determines that a proposedassessment notice includes an individual who is not responsible forthe tax liability, a new assessment may be made naming only thetaxpayer that is responsible for the tax liability.
(b) For assessments made under subsection (a), the time limitationfor assessments in section 2 of this chapter does not apply.
As added by P.L.254-2003, SEC.10.
IC 6-8.1-5-3
Jeopardy assessment; jeopardy tax warrant; levy and sale; bond
Sec. 3. (a) If at any time the department finds that a person owingtaxes intends to quickly leave the state, remove his property from thestate, conceal his property in the state, or do any other act that wouldjeopardize the collection of those taxes, the department may declarethe person's tax period at an end, may immediately make anassessment for the taxes owing, and may demand immediate paymentof the amount due, without providing the notice required inIC 6-8.1-8-2.
(b) If the department has sent a notice of proposed assessmentunder section 1 of this chapter to a taxpayer by United States mailand the notice is returned to the department because the taxpayer hasmoved and the department is unable to determine the taxpayer's newaddress, the department may:
(1) declare the person's tax period at an end;
(2) immediately make an assessment for the taxes owing; and
(3) demand immediate payment of the amount due;
without providing the notice required in IC 6-8.1-8-2.
(c) If the payment is not made immediately, the department mayissue or request the state police department to serve a jeopardy taxwarrant against the person and, either without or with the assistanceof the sheriffs of any counties in the state, may levy on and sell theperson's property which is located in those counties. In place of thelevy and sale procedure, the department may accept from the persona bond for the payment of the taxes, if the bond is in an amount atleast equal to the amount of the total liability and if the bond isthrough a surety acceptable to the department.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.26-1985,SEC.14; P.L.129-2001, SEC.21.
IC 6-8.1-5-4
Books and records; federal returns; inspection
Sec. 4. (a) Every person subject to a listed tax must keep booksand records so that the department can determine the amount, if any,of the person's liability for that tax by reviewing those books andrecords. The records referred to in this subsection include all sourcedocuments necessary to determine the tax, including invoices,register tapes, receipts, and canceled checks.
(b) A person must retain the books and records described insubsection (a), and any state or federal tax return that the person hasfiled:
(1) for an unlimited period, if the person fails to file a return orreceives notice from the department that the person has filed asuspected fraudulent return, or an unsigned or substantiallyblank return; or
(2) in all other cases, for a period of at least three (3) years afterthe date the final payment of the particular tax liability was due,unless after an audit, the department consents to earlierdestruction.
In addition, if the limitation on assessments provided in section 2 ofthis chapter is extended beyond three (3) years for a particular taxliability, the person must retain the books and records until theassessment period is over.
(c) A person must allow inspection of the books and records andreturns by the department or its authorized agents at all reasonabletimes.
(d) A person must, on request by the department, furnish a copyof any federal returns that he has filed.
As added by Acts 1980, P.L.61, SEC.1. Amended by P.L.6-1987,SEC.11; P.L.71-1993, SEC.18.
IC 6-8.1-5-5
Reserved
IC 6-8.1-5-6
Motor carrier fuel tax and surcharge tax; records or reports; audits orexaminations; reimbursement
Sec. 6. (a) If a record or report maintained outside Indiana isrequired by the department with respect to the administration orcollection of the motor carrier fuel tax and surcharge tax underIC 6-6-4.1, the department may require the taxpayer or carrier tomake the record or report available at a location in Indiana.
(b) If a taxpayer or carrier fails to make a report or recordavailable to the department at a location in Indiana, the departmentmay require the taxpayer or carrier to reimburse the department in anamount equal to:
(1) the per diem paid to state employees multiplied by thenumber of days attributable to the audit or examination,including travel days; plus
(2) the lesser of: (A) the expenses incurred by the department for lodging andtravel; or
(B) four (4) times the amount determined under subdivision(1).
(c) A reimbursement received by the department under thissection shall be used by the department to pay the expenses incurredin conducting out-of-state audits and examinations.
As added by P.L.8-1988, SEC.8.