Looking for a Indiana Tax Forms And Templates? Download it for free!

ing 50% of the allowable donation as a credit against gross income tax, adjusted gross income tax, or supple-

mental net income tax. The department has processed 3,926 tax credits for the fiscal year ending June 30,

2002.

BANKRUPTCY SECTION/RESPONSIBLE OFFICER SECTION

The bankruptcy section reviewed 4,331 Chapter 11, Chapter 7 Assets and Chapter 13 bankruptcy notices to

determine if a claim needed to be filed based upon outstanding tax liabilities and/or non-filed tax returns.

This area also handled 11,608 incoming phone calls as well as 106,103 pieces of incoming correspondence.

Our section received 3,979 previously unfiled tax returns due to bankruptcy proceedings.

A total of 41 Responsible Officer billings were generated for trust taxes not paid by their businesses.

INDIVIDUAL/WITHHOLDING/CORPORATIONS TAX SECTION

The Individual Income Tax Section’s mission is to identify and pursue non-filers, as well as to verify the accuracy

of filed returns by utilizing information from the Internal Revenue Service, various Indiana State agencies, other

state taxing agencies, and anonymous informants. Our standard compliance projects and findings for Fiscal

Year 2002 are as follows:

Federal Audits

Information is obtained from the Internal Revenue Service concerning agreed federal tax audit reports to the

department. If taxpayers do not amend their Indiana Individual income tax return to report the Indiana adjust-

ments resulting from the federal modifications detailed in the audit findings, a tax assessment is generated.

CP2000 Unreported Income

The department obtains data from the Internal Revenue Service regarding taxpayers who failed to report all

taxable income. This could be income derived from wages, interest, dividends, or non-employee compensa-

tion. These types of income are reported on W-2’s or Form 1099 information returns. An assessment is

generated if the income was not reported on the original return, or an amended return. The project resulted in

7,117 taxpayer assessments.

Federal/State Cross check

The department obtains magnetic tape information from the Internal Revenue Service disclosing adjusted gross

income and exemptions reported on the federal returns. This file is compared to the state reported adjusted

gross and exemptions from our master file. Automatic billings are then generated for any state and county tax

due on the differences. This Project resulted in 15,181 taxpayers being assessed.

Withholding Discrepancies

A comparison is made between taxpayers’ annual WH-3 Forms with the state and county withholding payments

(from Form WH-1) made during the year. If underpayments exist, taxpayers are assessed the differences. The

project resulted in 326 taxpayers being assessed.

Individual Desk Audits

Individual desk examinations are performed, based on anonymous sources or submissions from other divisions

within the department. The examination may consist of verifying income reported, credits/deductions taken, or

the amount of refund requested. Individual desk audit resulted in 75 assessments.

Voluntary Compliance Program

Taxpayers who discover that they may have nexus with Indiana, but have not filed returns, frequently contact the

department and request to enter into a Voluntary Compliance Agreement. These taxpayers often times were

confused or were unaware of filing requirements for income tax and sales/use taxes in Indiana. Tax due is not

forgiven, nor is interest abated.

Indiana Department of Revenue Annual Report - October 1, 2002

Areas Of Recurring Taxpayer Noncompliance - Indiana Department Of Revenue Annual Report Page 2