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Popovich v. Indiana Dep't of State Revenue

Tax Court of Indiana

April 14, 2016

NICK POPOVICH, Petitioner,
v.
INDIANA DEPARTMENT OF STATE REVENUE, Respondent

          ATTORNEY FOR PETITIONER: JAMES K. GILDAY, GILDAY & ASSOCIATES, P.C., Indianapolis, IN.

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

         ORDER ON RESPONDENT'S MOTION FOR SUMMARY JUDGMENT

         Martha Blood Wentworth, Judge.

         Nick Popovich claims that he is a professional gambler and, as such, reported income and deductions associated with his trade. The Indiana Department of State Revenue disagreed that gambling was his occupation and issued adjusted gross income tax (AGIT) assessments for the 2003, 2004, and 2005 tax years (" years at issue" ). The matter, currently before the Court on the Department's Motion for Summary Judgment, presents the following issues for the Court to decide: whether the Department's 2003 AGIT assessment was timely; and whether Popovich was a professional gambler eligible for certain deductions from his adjusted gross income. Upon review, the Court finds in favor of Popovich in part and denies the Department's Motion.[1]

         FACTS AND PROCEDURAL HISTORY

         The following facts are not in dispute. On December 29, 2007, the Department issued an Investigation Summary to Popovich rejecting his contention that he was engaged in the trade or business of gambling in 2003 and 2004. (See Resp't Confd'l Des'g Evid., Vol. VI at 1213-31, May 11, 2012.) Consequently, on January 28, 2008, the Department issued Proposed Assessments to Popovich in the amount of $403,762.72 for additional AGIT due, as well as interest and penalties. (See Resp't Confd'l Des'g Evid., Vol. VI at 1232-41.) Popovich protested, but the Department upheld the Proposed Assessments in their entirety. (See Resp't Confd'l Des'g Evid., Vol. I at 1252-63; Resp't Des'g Evid., Vol. I at 1203-12.)

         On October 4, 2010, Popovich initiated an original tax appeal challenging the Department's imposition of additional AGIT and interest for the 2003 and 2004 tax years and its imposition of negligence penalties for all of the years at issue. (See Pet'r Br. Supp. Resp. Opp'n Resp't Mot. Summ. J. (" Pet'r Br." ) at 2-3 (citing generally Pet'r Pet.), Aug. 15, 2014.) On February 9, 2012, the Department moved for summary judgment and designated, among other things, the Proposed Assessments as evidence. On February 27, 2015, the Court held a hearing on the Department's Motion. Additional facts will be supplied as necessary.

         STANDARD OF REVIEW

          Summary judgment is proper when the designated evidence demonstrates that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). A genuine issue of material fact exists when a fact concerning an issue that would dispose of the case is in dispute or when the undisputed facts support conflicting inferences as to the resolution of an issue. Miller Pipeline Corp. v. Indiana Dep't of State Revenue, 995 N.E.2d 733, 734 n.1 (Ind.Tax Ct. 2013).

         ANALYSIS

          When, as here, the Department has moved for summary judgment and properly designated its Proposed Assessments as evidence, it has made a prima facie case that there is no genuine issue of material fact regarding the validity of the assessed tax. See Indiana Dep't of State Revenue v. Rent-A-Center E., Inc. (RAC II), 963 N.E.2d 463, 466-67 (Ind. 2012). Consequently, the burden to produce evidence that demonstrates that there is, in actuality, a genuine issue of material fact with respect to the assessed tax has shifted to Popovich. See id. at 467.

         Popovich designated evidence to demonstrate whether genuine issues of material fact exist regarding the timeliness of the Department's 2003 Proposed Assessment and whether Popovich was engaged in the trade or business of gambling in 2003 and 2004. (See Pet'r Br. at 39-68.) Nevertheless, the Court must first address the Department's arguments that a portion of Popovich's designated evidence, i.e., Popovich's Affidavit and Preston Boskett's Expert Witness Report, is inadmissible. (See generally Resp't Reply Supp. Resp't Mot. Summ. J. (" Resp't Reply Br." ) at 4-7 (referring to Pet'r Des'g Evid., Exs. A-B, Aug. 15, 2014), Jan. 20, 2015.) See also Miller Pipeline, 995 N.E.2d at 736 (providing that " when ruling on a motion for summary judgment, this Court will only consider properly designated evidence that would be admissible at trial" (citations omitted)).

         I. Popovich's designated evidence Popovich's Affidavit

         The Department asserts that the Court should disregard Popovich's Affidavit because it " contradicts other statements made by Popovich during discovery[,]" is internally inconsistent, contains conclusory statements, puts Popovich's credibility at issue, and improperly attempts to create genuine issues of material fact where there are none. (See Resp't Reply Br. at 4-5; Hr'g Tr. at 98-99.) The Department, however, has not supported these assertions by identifying a single instance where statements in Popovich's Affidavit contradicted his discovery statements, were internally inconsistent, were improperly conclusory, put his credibility at issue, or improperly attempted to create a genuine issue of material fact. Instead, the Department merely identified instances where Popovich's characterization of the evidence differed from the Department's. (Compare, e.g., Resp't Reply Br. at 4 and Resp't Br. Supp. Mot. Summ. J. (" Resp't Br." ) at 20-22, Feb. 9, 2012 with Pet'r Des'g Evid., Ex. A ¶ ...


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