953 N.E.2d 682
Ind. T.C.2011Background
- Garwoods operated a family dairy farm in Harrison County, Indiana and, beginning in 2007, sold dogs to supplement income.
- Indiana Department of State Revenue issued sixteen jeopardy assessments for 2007–2009 tax years and the Garwoods protested.
- Jeopardy assessments were issued after the Department and OAG seized 240 dogs and other property and obtained warrants, with sale of the dogs for $300.
- Garwoods filed an original tax appeal; the Department declined to hold a hearing on their protest and directed them to circuit court; the case proceeded in Indiana Tax Court on summary judgment motions.
- The court held the Department failed to show the statutorily required exigent circumstances for jeopardy assessments and entered judgment for the Garwoods, remanding to void the jeopardy assessments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether jeopardy assessments were properly issued under I.C. 6-8.1-5-3. | Garwoods contend the Department lacked exigent circumstances. | Department asserts proper use under statute. | Jeopardy assessments void for lack of requisite exigent circumstances. |
| Whether the Department showed the required exigent circumstances (leave, remove, conceal, or other act) under I.C. 6-8.1-5-3(a). | No evidence of flight, removal, concealment, or other prejudicial act. | Investigation evidence implied risk to collection. | Exigency not established; assessments invalid. |
| Whether the Department could rely on 45 IAC 15-5-8 and related interpretations to justify jeopardy assessments. | Regulatory interpretation unsupported by facts. | Regulation supports jeopardy tool in appropriate cases. | Regulatory basis insufficient given lack of statutory exigency; assessments void. |
Key Cases Cited
- Indiana Dep't of State Revenue v. Adams, 762 N.E.2d 728 (Ind.2002) (jeopardy power defined; narrow statutory limits on use)
- Adams v. State, 762 N.E.2d 737 (Ind.2002) (jeopardy assessments; statutory boundaries)
- Clifft v. Ind. Dep't of State Revenue, 660 N.E.2d 310 (Ind.1995) (jeopardy power; constitutionality; procedural limits)