Linda Wasko



On October 6, 2015, the Department issued two assessments to the Taxpayer for gross receipts tax, penalty and interest for the CRS reporting periods from January 1, 2012 through June 30, 2012, and from July 1, 2012 through December 31, 2012.  On October 14, 2015, the Taxpayer protested the assessments.  The receipts at issue in the protest are from the Taxpayer providing in-home elder care services for a company.  In order to qualify for the deduction for the sale of a service for resale, the Taxpayer needed a Type 5 nontaxable transaction certificate (NTTC), issued by the company.  The Taxpayer did not receive an NTTC at the time her taxes were due, nor did she report, file or pay gross receipts tax during the period in question.  As part of its Schedule C Tape Match program with the IRS, the Department discovered that the Taxpayer had sole proprietorship income reported on her federal income tax return that was not reported as gross receipts on a CRS filing.  On June 26, 2015, the Department prepared a Notice of Limited Scope Audit Commencement-60 Day Notice asking the Taxpayer to explain the mismatch and provide any necessary NTTCs to support claimed deductions.  The Taxpayer claimed to have not received the notice until a week to ten days after the date on the document, and upon questioning, the Department auditor acknowledged that based on his experience, the notice could have been mailed Friday, June 26 2015, or Monday, June 29, 2015.  The notice indicated a deadline of August 25, 2015 for the Taxpayer to present the necessary NTTCs.  The Taxpayer worked with the company to get the NTTC beginning sometime in August.  On August 24 and 25, they contacted the Department because they were having trouble executing the NTTC.  On August 26, 2015, the company executed a Type 5 NTTC to the Taxpayer.  The Department disallowed the claimed deduction because the NTTC was executed after the August 25 deadline.  The hearing officer found that a genuine issue as to the date of mailing of the notice was established and the NTTC should then have been accepted as it was executed only one day after the deadline.  The Taxpayer’s protest was granted.