Revenue Finds Employee's Use of Wrong Pay Date on Batch Payment Met Definition of Negligence Warranting Penalty

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Taxpayer is a company doingbusiness in Indiana. For the period ending May 31, 2012, Taxpayer was requiredto remit Indiana employee withholding taxes on June 20, 2012. However, Taxpayerremitted Indiana employee withholding tax on June 21, 2012, one day after thedeadline. The Indiana Department of Revenue ("Department") assessedinterest and a ten-percent penalty for the late payment of the employeewithholding tax. Taxpayer protested these assessments. 
Taxpayer argues that it isentitled to abatement of the penalty for late payment of employee withholdingtax....
Departmentalregulation 45 IAC 15-11-2(b) defines negligence as"the failure to use such reasonable care, caution, or diligence as wouldbe expected of an ordinary reasonable taxpayer." Negligence is to "bedetermined on a case-by-case basis according to the facts and circumstances ofeach taxpayer." Id.IC § 6-8.1-10-2.1(d) allowsthe Department to waive the penalty upon a showing that the failure to pay thedeficiency was based on "reasonable cause and not due to willfulneglect." Departmental regulation 45 IAC 15-11-2(c) requires that in order toestablish "reasonable cause," the taxpayer must demonstrate that it"exercised ordinary business care and prudence in carrying out or failingto carry out a duty giving rise to the penalty imposed...."
Taxpayer makes batchpayments through its bank. Taxpayer can set the date that payments are made.For the payment of the withholding tax for the month ending May 30, 2012,Taxpayer's employee set the pay date as the wrong date. Taxpayer states that asimple clerical error was made. However, this fits the definition ofnegligence, and thus a negligence penalty is warranted.
Taxpayer states thatTaxpayer has not been delinquent with submitting payments in the past. However,Taxpayer has had multiple late tax payments for previous periods. Based on itshistory of late payments in conjunction with the circumstances of the currentlate payment, Taxpayer has not provided sufficient information to justifypenalty waiver.
Taxpayer also protests theimposition of interest, however the Department may not waive interest asprovided by IC § 6-8.1-10-1(e).
http://www.in.gov/legislative/iac/20121128-IR-045120597NRA.xml.html