Tax Court dismisses law firm’s appeal for lack of jurisdiction

The Indiana Tax Court has dismissed an appeal from an Indianapolis law office that was ordered to pay an outstanding liability after it mislabeled withholding tax returns in 2021, finding the court lacked jurisdiction in the case.

Joseph R. Guy P.C. ran into trouble with the Indiana Department of State Revenue in December 2021 after the department determined Guy, an attorney in Indianapolis, had not submitted a withholding tax return for Sept. 1-30, 2021. If the return was not filed by Jan. 6, 2022, the department said it would prepare an assessment based on the best information it had.

However, in November 2021, Guy had electronically filed a withholding tax return for that period via the Indiana Taxpayer Information Management Engine, or INTIME, and paid the corresponding tax liability of $688.26 to the department.

Upon the department’s notice of failure to file, Guy sent a letter explaining the firm had filed the withholding tax return for the period at issue but had mistakenly labeled it for the October 2021 tax period. Despite attaching the firm’s September and October 2021 payroll ledgers and the related INTIME payment receipts to the letter, the department did not respond to Guy.

Near the end of January, an outstanding withholding tax liability of $1,273.22 was issued against Guy for the December 2021 tax period. A back-and-forth discussion continued between Guy and the department until the department issued a “Notice of Balance Due” reducing Guy’s withholding tax liability for the period at issue from $1,266.52 to $578.26.

Guy appealed, but the department filed a motion to dismiss the case for lack of subject matter jurisdiction pursuant to Indiana Trial Rule 12(B)(1).

The Tax Court granted the motion to dismiss, finding the evidence before it failed to establish that the “Notice of Balance Due” constituted a final determination.

“While the Notice of Balance Due did impose an obligation upon Guy, i.e., it required Guy to pay additional withholding tax for the period at issue, it did not constitute a final determination because Guy failed to initiate either of the Department’s administrative processes under Indiana Code § 6-8.1-5-1 (to appeal an assessment) or under Indiana Code § 6-8.1-9-1 (to appeal the denial of a refund claim),” Judge Martha Blood Wentworth wrote. “Therefore, the Notice of Balance Due could not constitute the consummation of the administrative appeal process, and Guy’s case is not an original tax appeal subject to the Court’s jurisdiction.”

As such, the Tax Court dismissed without prejudice in the case of Joseph R. Guy, P.C. v. Indiana Department of State Revenue, 22T-TA-00005.