Rexbrun Corporation

06-04

The taxpayer’s accountant filed the taxpayer’s CRS return electronically using the Department’s CRS-Net system.  Payment was made using an electronic check.  The taxpayer’s accountant received a confirmation from CRS-Net confirming receipt of the return and electronic check.  The taxpayer’s bank subsequently rejected the electronic check because a number was missing from the account number and the account could not be found.  The Department then assessed the taxpayer for the amount of the rejected payment, plus penalty and interest.  The taxpayer filed a written protest to the assessment.  Although the assessment did not explain the basis for the assessment, the taxpayer’s accountant was aware that the electronic check intended to pay the assessed tax had not cleared the taxpayer’s account.  It was over one year later that the taxpayer paid the tax principal, while continuing to protest the penalty and interest.  The hearing officer found that upon receiving the Department’s assessment and realizing that the tax payment had not cleared its account, the taxpayer had a responsibility to research the matter further.  The taxpayer’s failure to do so was negligent, and penalty and interest were properly imposed.  The taxpayer’s protest was denied.