Liability for penalty
Sec. 2.1. (a) If a person:
(1) fails to file a return for any of the listed taxes;
(2) fails to pay the full amount of tax shown on the person's
return on or before the due date for the return or payment;
(3) incurs, upon examination by the department, a deficiency
that is due to negligence;
(4) fails to timely remit any tax held in trust for the state; or
(5) is required to make a payment by electronic funds transfer
(as defined in IC 4-8.1-2-7), overnight courier, or personal
delivery and the payment is not received by the department by
the due date in funds acceptable to the department;
the person is subject to a penalty.
(b) Except as provided in subsection (g), the penalty described in
subsection (a) is ten percent (10%) of:
(1) the full amount of the tax due if the person failed to file the
return;
(2) the amount of the tax not paid, if the person filed the return
but failed to pay the full amount of the tax shown on the return;
(3) the amount of the tax held in trust that is not timely
remitted;
(4) the amount of deficiency as finally determined by the
department; or
(5) the amount of tax due if a person failed to make payment by
electronic funds transfer, overnight courier, or personal delivery
by the due date.
(c) For purposes of this section, the filing of a substantially blank
or unsigned return does not constitute a return.
(d) If a person subject to the penalty imposed under this section
can show that the failure to file a return, pay the full amount of tax
shown on the person's return, timely remit tax held in trust, or pay the
deficiency determined by the department was due to reasonable
cause and not due to willful neglect, the department shall waive the
penalty.
(e) A person who wishes to avoid the penalty imposed under this
section must make an affirmative showing of all facts alleged as a
reasonable cause for the person's failure to file the return, pay the
amount of tax shown on the person's return, pay the deficiency, or
timely remit tax held in trust, in a written statement containing a
declaration that the statement is made under penalty of perjury. The
statement must be filed with the return or payment within the time
prescribed for protesting departmental assessments. A taxpayer may
also avoid the penalty imposed under this section by obtaining a
ruling from the department before the end of a particular tax period
on the amount of tax due for that tax period.
(f) The department shall adopt rules under IC 4-22-2 to prescribe
the circumstances that constitute reasonable cause and negligence for
purposes of this section.
(g) A person who fails to file a return for a listed tax that shows
no tax liability for a taxable year, other than an information return (as
defined in section 6 of this chapter), on or before the due date of the
return shall pay a penalty of ten dollars ($10) for each day that the
return is past due, up to a maximum of two hundred fifty dollars
($250).
(h) A corporation which otherwise qualifies under IC 6-3-2-2.8(2)
but fails to withhold and pay any amount of tax required to be
withheld under IC 6-3-4-13 shall pay a penalty equal to twenty
percent (20%) of the amount of tax required to be withheld under
IC 6-3-4-13. This penalty shall be in addition to any penalty imposed
by section 6 of this chapter.
(i) Subsections (a) through (c) do not apply to a motor carrier fuel
tax return.
As added by P.L.1-1991, SEC.70. Amended by P.L.71-1993, SEC.26;
P.L.18-1994, SEC.43.
Last modified: May 28, 2006