§ 6-8.1-10-5 — Faulty payment; penalty; required use of guaranteed funds

Indiana § 6-8.1-10-5

• Jurisdiction: Indiana
• Art. 8.1: DEPARTMENT OF STATE REVENUE; TAX
• Ch. 10: Penalties and Interest

Text

(a) As used in this section, "payment
instrument" means:
(1) a check;
(2) a credit card;
(3) a debit card;
(4) an electronic funds transfer; or
(5) any other instrument in payment by any commercially
allowable means.
(b) If a person makes a payment to the department for an amount
due to the department with a payment instrument and the department
is unable to obtain payment on the payment instrument for the full
amount of the attempted payment when the payment instrument is
presented for payment through the normal banking channels, the
department shall:
(1) notify the person that the department was unable to obtain
payment on the full amount of the payment instrument; and
(2) assess a penalty of thirty-five dollars ($35) not more than
thirty (30) days after the department was unable to obtain
payment.
(c) If the department determines that the person made a payment
described in subsection (b) fraudulently or otherwise knowing that the
department would be unable to obtain payment on the payment
instrument for the full amount of the attempted payment when the
payment instrument is presented for payment through normal banking
channels, the penalty is equal to one hundred percent (100%) of the
amount on which the department was unable to obtain payment, but not
less than thirty-five dollars ($35). The following apply:
(1) A penalty assessment under this subsection shall be made not
more than three (3) years after the department was unable to
obtain payment.
(2) The penalty under this subsection shall not be made in
addition to the penalty under subsection (b)(2). However, nothing
shall prohibit the department from issuing a penalty under this
subsection with regard to a payment after a penalty under
subsection (b)(2) was issued.
(3) If a penalty under this subsection is reduced to the amount
specified in subsection (b)(2), the department may issue a new
assessment for the penalty within thirty (30) days after the final
determination of the penalty reduction.
(d) If the department is unable to obtain payment on a payment
instrument, the amount on which the department was unable to obtain
payment shall not be considered to be a payment of that amount.
(e) The following apply:
(1) Any penalty under subsection (b)(2) is due not less than
twenty (20) days after the department issues the assessment under
subsection (b)(2).
(2) If the person fails to pay the penalty provided under this
section in full within the time specified by the department, the
department may file a tax warrant for the unpaid portion of the
penalty in the manner provided under IC 6-8.1-8-2.
(3) For purposes of this article, a penalty under subsection (b)(2)
shall not be considered to be a proposed assessment under IC 6-8.1-5-1.
(f) If a person receives a penalty under subsection (c), the penalty
shall be treated as a proposed assessment as provided in IC 6-8.1-5-1.
However, if the person pays the penalty under subsection (c) and files
a claim for refund of the penalty, notwithstanding IC 6-8.1-9-1, the
payment of the penalty shall not be refunded unless the person
protested the penalty pursuant to IC 6-8.1-5-1 in a timely manner.
(g) The following apply:
(1) If the penalty under subsection (b)(2) relates to an attempted
payment of a liability for which the department has filed a tax
warrant under IC 6-8.1-8-2 or for which the department files a tax
warrant under IC 6-8.1-8-2 prior to the expiration of the period
specified in subsection (e), the tax warrant may include the
amount of the penalty provided in this section prior to the
expiration of the period specified in subsection (e).
(2) If a penalty under this section is included as part of a proposed
assessment under IC 6-8.1-5-1, the filing of a tax warrant for the
penalty under this section shall be timely if the tax warrant for the
penalty:
(A) was filed on or before the day as a timely filed tax warrant
for the proposed assessment;
(B) was filed as part of the tax warrant for the proposed
assessment; or
(C) was otherwise filed within the period allowable under IC 6-8.1-8-2.
(h) The following apply:
(1) The department may waive the penalty under this section if
the person establishes that the person acted with reasonable cause
in the attempted payment.
(2) If the department determines that the penalty under subsection
(b)(2) shall not be waived, including a reduction of a penalty
under subsection (c) to the amount specified in subsection (b)(2),
the determination is not subject to administrative or judicial
review.
(3) If the department determines that the penalty under this
section should be waived, but the liability for the penalty has
advanced to a tax warrant:
(A) the amount due under the tax warrant shall be reduced by
the amount of any penalty under this section included in the tax
warrant but not paid; or
(B) if the person has paid the penalty under this section, the
department shall refund the penalty under this section paid by
the person.
(4) Nothing shall prohibit judicial review of a penalty under this
section if the penalty was imposed on a payment instrument upon
which the department was able to collect the full amount of the
payment instrument upon presentation of the payment through the
normal banking channels.
(i) If a person has been subject to a penalty under this section more
than one (1) time during a twenty-four (24) month period, or has been
subject to a penalty under subsection (c) that has not been reduced or
waived, the department may require the person to remit all future
payments for all listed taxes with guaranteed funds.
As added by Acts 1980, P.L.61, SEC.1. Amended by
P.L.26-1985, SEC.17; P.L.18-1994, SEC.44; P.L.131-2008, SEC.33;
P.L.182-2009(ss), SEC.259; P.L.293-2013(ts), SEC.35; P.L.146-2020,
SEC.46.