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Garwood v. Indiana Dep't of State Revenue

Tax Court of Indiana

December 31, 2014

VIRGINIA GARWOOD, Petitioner,
v.
INDIANA DEPARTMENT OF STATE REVENUE, Respondent

ATTORNEY FOR PETITIONER: STACY K. NEWTON, JACKSON KELLY, PLLC, Evansville, IN.

ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER, ATTORNEY GENERAL OF INDIANA; JOHN P. LOWREY, DEPUTY ATTORNEY GENERAL, Indianapolis, IN.

Page 549

ORDER ON RESPONDENT'S MOTION FOR SUMMARY JUDGMENT

Thomas G. Fisher, Senior Judge.

Virginia Garwood has filed her second appeal with this Court, seeking a refund of over $100,000 from the Indiana Department of State Revenue.[1] The matter, currently before the Court on the Department's motion for summary judgment, concerns whether the Department properly denied a portion of Garwood's refund claim. The Court finds that the Department's denial was not proper as a matter of law.[2]

FACTS AND PROCEDURAL HISTORY

The following facts are not in dispute. On June 2, 2009, the Department served Garwood with several jeopardy tax assessments which provided that she owed approximately $125,000 in sales tax, penalties, and interest on her sales of dogs for the January 1, 2007 through April 30, 2009 tax period. When Garwood indicated that she could not pay the liability, the Department seized 240 of her dogs pursuant to several jeopardy tax warrants. The Department also seized $1,260 in cash and $1,325 in uncashed checks pursuant to a search warrant issued by the Superior Court of Marion County.

On June 3, 2009, the Department sold all 240 of the seized dogs to the U.S. Humane Society for a total of $300.00. (See Pet'r Des'g Evid. Supp. Pet'r Resp. Opp'n Resp't Mot. Summ. J., Ex. C.) The Department subsequently applied half of the proceeds from that sale to Garwood's purported tax liability.[3] The Department, however, did not apply the seized cash or checks to Garwood's purported tax liability. (See Resp't Confd'l Des'g Evid., Ex. 3.) Several months later, Garwood remitted $25.48 to the Department for her purported tax liability, and the Department applied the payment to her outstanding balance.

On June 29, 2009, Garwood filed her first appeal with this Court challenging the validity of the jeopardy tax assessments. See Garwood v. Indiana Dep't of State Revenue (Garwood I), 939 N.E.2d 1150 (Ind.Tax Ct. 2010) (order denying the Department's motion to dismiss for lack of subject matter jurisdiction). On August 19, 2011, the Court held that the jeopardy tax assessments were void as a matter of law because they were not issued in accordance with Indiana Code § 6-8.1-5-3. See Garwood v. Indiana Dep't of State Revenue (Garwood II), 953 N.E.2d 682 (Ind.Tax Ct. 2011), review denied.

On August 29, 2011, Garwood filed a refund claim with the Department that provided, in part:

I am attaching an appraisal of the value of my property as well as the decision of

Page 550

the Indiana Tax Court. My dogs were appraised at $122,650.00. I calculate my actual sales tax due as $1217.00 for 2008 and $1333.50 for 2009. In addition to taking the dogs[,] the Department took $1260 in cash and uncashed checks totaling $1325. Subtracting what I owed from what was seized[,] I am owed a refund of $122,684.50.

(Resp't Des'g Evid., Ex. 4 at Ex. A at 3.) In June 2012, the Department issued a check to Garwood in the amount of $175.48. The Department subsequently issued a second check to Garwood to compensate her for its seizure of $1,260 in cash and ...


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