Indiana DOR Allows Taxpayers’ Business Expense Deductions in Income Tax Protest

The Indiana Department of Revenue (DOR) issued a ruling allowing the taxpayers’ business expense deductions in income tax protest. Taxpayers are a married couple who jointly filed their 2022 Indiana Full-Year Resident Individual Income Tax Return (“IT-40”). The taxpayers protested that the Department incorrectly disallowed business expenses related to an author/writing activity, which the Department had deemed a hobby rather than a business. After review, the DOR held that the taxpayers established that the writing activity qualified as a trade or business under the IRS regulations, and therefore, were allowable deductions. [Ind. Dep’t of Revenue, Letter of Findings 01-20251818, 07/11/25] ...