January 8, 2008

 

 

Louis Blanco, President

Mobile Vision Inc.

90 Fanny Road

Boonton, NJ 07005

 

 

Re: Individual Income Tax Protest

      Docket No. 07-20-2-00149

 

 

Dear Mr. Blanco:

 

The Review Unit of the Iowa Department of Revenue has met and reviewed your August 2007 Protest.  In your Protest, you seek relief from a 10% penalty assessed for failure to remit 90% of the tax due by the due date of the return for the tax period ending April 30, 2005.  Your Protest also indicates you received advice from the Department’s Taxpayer Services Division that your composite tax return was due by April 30, 2005.  Under Revenue Department Rule 701—48.9(1) IAC, a composite return must be filed by the last day of the fourth month following the close of the taxpayer’s taxable year.  Under Rule 48.2, the taxable year for those filing composite returns is the taxable year of the partners, shareholders, employees, beneficiaries, estates or trusts.  The taxable year of the partners for composite return purposes follows the calendar year, thus ending December 31, and making the composite return due four months later on April 30.

 

Under 701—48.9(2) IAC, if a taxpayer has paid at least 90% of the tax by the due date of the return, but has yet to file the return, the Department will consider this a request by the taxpayer for an extension and the Director will automatically grant a six-month extension to file the return and pay the remaining 10% tax.  If the taxpayer files the return and pays the remaining 10% of the tax shown due on the return within the six-month extension period, the Department will not assess the 10% penalty. 

 

In your case, you paid over 90% of the tax due by the due date of the return.  As a result, you automatically received a six-month extension to file your composite return.  Department records indicate Mobile Vision, Inc., filed a composite return and paid over 90% of the tax required to be shown due by the original due date of the return.

 

Because you timely filed the composite return and over 90% of the tax shown due on the return was paid by the due date, the Department erred when assessing the 10% penalty and denying your request for a refund.  As a result, the Department agrees a refund should be issued in the amount of $16,010.23.  This amount includes interest the Department owes for use of taxpayer money and includes interest computed through January 31, 2008.

 

If you disagree with the Review Unit’s position or if you disagree with the amount of the refund, please notify the Department in writing within thirty (30) days of the date of this letter. If the Department does not receive a response within thirty (30) days of the date of this letter, the Department will assume Mobile Vision, Inc. is satisfied with the amount of the refund and the Review Unit will ask the Director to formally close your August 2007 Protest.

 

If you have any further questions regarding this matter, please contact Dennis Schutt at (515) 281-7994.

 

 

 

Sincerely,

 

 

 

Jim McNulty, Program Manager

Audit Services Section

Compliance Division