Crown Prop. Grp., LLC v. Ind. Dep't of State Revenue
| Decision Date | 13 November 2019 |
| Docket Number | Cause No. 18T-TA-00027 |
| Citation | 135 N.E.3d 671 |
| Parties | CROWN PROPERTY GROUP, LLC, Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE, and Adam J. Krupp, Respondents. |
| Court | Indiana Tax Court |
ATTORNEY FOR PETITIONER: MARK J. LIECHTY, AMMEEN VALENZUELA ASSOCIATES LLP, Indianapolis, IN
ATTORNEYS FOR RESPONDENT: CURTIS T. HILL, JR., ATTORNEY GENERAL OF INDIANA, WINSTON LIN, ZACHARY D. PRICE, CHRISTOPHER M. ANDERSON, DEPUTY ATTORNEYS GENERAL, Indianapolis, IN
ORDER ON PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT
Crown Property Group, LLC ("Crown") has challenged the Indiana Department of State Revenue's final determination that denied its request for a refund of the collection fees and bank fees attributable to a withholding tax assessment for the period ending on December 31, 2014 (the "period at issue"). The matter is currently before the Court on the parties' cross-motions for summary judgment. The issue before the Court is whether the Department's Proposed Assessment, Demand Notice, and Tax Warrant were validly issued in conformance with the notice requirements under Indiana Code §§ 6-8.1-5-1 and 6-8.1-8-2.1 The Court grants summary judgment to Crown.
The following facts are not in dispute. During the period at issue, Crown, a domestic limited liability company, was located at 155 East Market Street, Suite 860, Indianapolis, Indiana 46204 (the "Suite 860 address"). (Resp'ts' Mem. Supp. Mot. Summ. J. ("Resp'ts' Mem.") at 5 (citing Pet'r Pet. Original Tax Appeal Final Determination Ind. Dep't State Revenue ¶ 1), Ex. 1 at 14.) The company had no employees and had not paid wages to any individual since the third quarter of 2009. (Joint Stipulation of Facts ("Jt. Stip.") ¶ 3.) As a result, Crown stopped filing withholding tax returns in 2009; it did not, however, close its withholding registration account with the Department until several years later. (See Jt. Stip. ¶¶ 4, 15-16.)
On March 23, 2015, the Department issued a Proposed Assessment to Crown for over $2,000 of withholding tax, interest, and penalties for the period at issue. (Jt. Stip. ¶ 7, Ex. A.) The Department sent the Proposed Assessment to the address of Crown's former attorney-in-fact, Summit PM, LLC ("Summit"), at 241 North Pennsylvania Street, Indianapolis, Indiana 46204-2405 (the "Pennsylvania Street address"). Summit forwarded the Proposed Assessment to Crown. (Resp'ts' Mem., Ex. 1 at 30, Ex. 3 at 10.)
On April 29, 2015, Crown's owner filed an Indiana Business Tax Closure Request form ("Form BC-100") with the Department, requesting that it close the company's withholding registration account because it had no employees. The Department, however, did not process the Form BC-100 because it lacked supporting documentation and was not notarized. (See Jt. Stip. ¶ 20, Ex. K at 1.) (See also Jt. Stip. ¶ 8, Ex. B.)
On June 15, 2015, the Department converted the Proposed Assessment into a Demand Notice that provided Crown had ten days to pay over $2,500 of withholding tax, interest, and penalties. (See Jt. Stip. ¶ 10, Ex. C.) The Department sent the Demand Notice to Crown at the Pennsylvania Street address. (Jt. Stip. ¶ 10, Ex. C.)
On July 13, 2015, after Crown failed to pay the tax liability, the Department converted the Demand Notice into a Tax Warrant for the full amount of the tax, interest, penalties, and collection fees. (See Jt. Stip. ¶ 11, Ex. D.) The Department sent the Tax Warrant to Crown at the Pennsylvania Street address and filed it with the Clerk of the Marion County Circuit Court. (See Jt. Stip. ¶ 11, Ex. D.) See also, e.g., IND. CODE § 6-8.1-8-2(c) (2019) (). Two days later, the Department's collection agent filed a duplicate tax warrant with the Marion County Circuit Court Clerk for over $3,000 of withholding tax, interest, penalties, collection fees, clerk's costs, and damages. (See Jt. Stip. ¶ 12, Ex. E.)
On June 27, 2016, nearly a year after filing the duplicate tax warrant, the Department's collection agent levied $1,711.30 from Crown's bank account. (Jt. Stip. ¶ 13, Ex. F.) As a result, the bank charged Crown a $100.00 fee. (Jt. Stip. ¶ 14.)
On October 13, 2017, Crown sent a letter to the Department requesting a refund of "any assets and/or money that has been seized" because its Form BC-100 shows that it "was no longer required to be registered for [withholding] tax as of December 31, 2009." Then, on November 22, 2017, Crown's owner filed another Form BC-100 with the Department that was notarized. (Jt. Stip. ¶ 15, Ex. G.) The following week, the Department closed Crown's withholding registration account. (Jt. Stip. ¶ 16.)
On December 20, 2017, Crown filed a claim for a refund of $1,811.30 (i.e., the $100.00 bank fee plus the amount levied). (See Jt. Stip. ¶ 17, Ex. H.) The refund claim provided that Crown's mailing address was 155 East Market Street, Suite 750, Indianapolis, Indiana 46204 (the "Suite 750 address"), not the Suite 860 address. (See Jt. Stip. ¶ 17, Ex. H.) (See also Resp'ts' Mem., Ex. 1 at 14 ().) On January 30, 2018, the Department sent a letter to Crown at the Suite 750 address, requesting that it submit additional information so that the Department could complete the processing of its refund claim. (Resp'ts' Mem., Ex. 4.) On February 20, 2018, after Crown failed to submit the requested information, the Department denied Crown's refund claim. (Jt. Stip. ¶ 19, Ex. J at 5.)
On March 22, 2018, Crown filed a protest, claiming that its refund claim was "wrongfully denied" because it never received the Department's January 30 letter and the Department did not have the authority to collect the withholding tax in the first place. (See Jt. Stip. ¶ 19, Ex. J at 1-2.) On August 8, 2018, after holding a hearing, the Department issued a Letter of Findings that sustained Crown's protest in part and denied it in part. (Jt. Stip. ¶ 20, Ex. K.) Specifically, in its final determination the Department explained that although Crown established it was entitled to a refund of the amount attributable to the withholding tax assessment (i.e., $1,460.68), it failed to show it should recoup the collection and bank fees because nothing indicated "that either the Department or its agent failed to follow the proper procedures in this matter." (See Jt. Stip. ¶ 20, Ex. K at 4; Resp'ts' Mem. Opp'n Pet'r Mot. Summ. J., Mot. Declaratory J., & Pet. Permanent Inj. ( ) at 13 n.4.)
On November 7, 2018, Crown initiated this original tax appeal. On May 8, 2019, the parties filed their cross-motions for summary judgment. On July 25, 2019, the Court held a hearing on the parties' cross-motions. Additional facts will be supplied as necessary.
Summary judgment is proper only when the designated evidence demonstrates that no genuine issues of material fact2 exist and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). When reviewing a motion for summary judgment, the Court will construe all properly asserted facts and reasonable inferences drawn therefrom in favor of the non-moving party. See Scott Oil Co. v. Indiana Dep't of State Revenue, 584 N.E.2d 1127, 1128-29 (Ind. Tax Ct. 1992). Cross-motions for summary judgment do not alter this standard. Horseshoe Hammond, LLC v. Indiana Dep't of State Revenue, 865 N.E.2d 725, 727 (Ind. Tax Ct. 2007), review denied.
During the period at issue, if the Department reasonably believed that a person had not reported the proper amount of withholding tax due, it was required to make a proposed assessment of the amount of the unpaid tax based on the best information available to it. See IND. CODE § 6-8.1-5-1(b) (2014). "The amount of the assessment [was] considered [to be] a tax payment not made by the due date and [was] subject to IC 6-8.1-10 concerning the imposition of penalties and interest." I.C. § 6-8.1-5-1(b). The Department was required to send "the person notice of the proposed assessment through the United States mail" that stated he had sixty (60) days from the date the notice was mailed to pay the assessment or file a written protest. I.C. § 6-8.1-5-1(b), (d).
If the person failed to pay the tax or file a written protest within the statutorily prescribed period, the Department was required to "issue a demand notice for the payment of the tax and any interest or penalties accrued on the tax[.]" IND. CODE § 6-8.1-8-2(a) (2014) (amended 2016). The person then had ten days from the date the Department mailed the demand notice to either pay the amount demanded or show reasonable cause for not paying. I.C. § 6-8.1-8-2(a).
If the person did not pay the amount demanded or show reasonable cause for not paying within the prescribed period, the Department could issue a tax warrant for, among other things, the amount of the tax, clerk's costs, and any collection fees authorized under Indiana Code § 6-8.1-8-4(b). I.C. § 6-8.1-8-2(b). The collection fees and clerk's costs attached upon the issuance of the tax warrant. See I.C. § 6-8.1-8-2(b). The Department could not, however, "file the [tax] warrant with the circuit court clerk of any county in which the person own[ed] property until at least twenty (20) days after the date the demand notice was mailed to the taxpayer." I.C. § 6-8.1-8-2(c).
The Department was authorized to contract with a collection agency for the collection of the delinquent tax plus, among other things,...
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