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Tuesday, May 17, 2011

Ind. Decisions - Tax Court issues one yesterday

In Lacey v. Ind. Dept. Revenue, a 9-page opinion in a case with a pro se petitioner, former Tax Court judge, and now Sr. Judge, Fisher writes:

On April 20, 2009, the Indiana Department of State Revenue (Department) issued a final determination in which it determined Lyle Lacey (Lacey) owed Indiana adjusted gross income tax for the 2007 tax year (the year at issue). Lacey has appealed that final determination. * * *

On appeal, Lacey argues that the compensation he received in 2007 as a result of his employment with Adecco is not income within the meaning of the Sixteenth Amendment to the United States Constitution5 or the Internal Revenue Code. * * *

As support for his argument, Lacey cites to the United States Supreme Court's decision in Eisner v. Macomber, 252 U.S. 189 (1919), for the proposition that only “gain” or “profit” can be “income.” * * *

[T]he Supreme Court has, since its decision in Eisner, repeatedly rejected the argument that income is limited to gain or profit. * * *

Conclusion. Lacey has not shown that the compensation he received in 2007 as a result of his employment with Adecco is not income within the meaning of the Sixteenth Amendment or the Internal Revenue Code. As a result, Lacey's employment compensation is income subject to Indiana's adjusted gross income tax and the Court therefore AFFIRMS the Department's final determination.

On a final note, this case marks the third time this Court has rejected the argument that one's employment wages do not constitute income subject to Indiana's adjusted gross income tax. * * * Consequently, the Court now provides the following warning: in the future, when a taxpayer advances the same (or a substantially similar) argument, the Court will not hesitate to consider whether an award of attorney fees is appropriate.

Posted by Marcia Oddi on May 17, 2011 10:08 AM
Posted to Ind. Tax Ct. Decisions