01-0475
Penalty and Interest
Signed 8/7/01
BEFORE THE UTAH STATE TAX
COMMISSION
____________________________________
PETITIONER, )
) ORDER
Petitioner, )
) Appeal No. 01-0475
v. )
) Account No. #####
TAXPAYER SERVICES
DIVISION, )
UTAH STATE TAX
COMMISSION, ) Tax Type:
Penalty & Interest
)
Respondent. ) Judge: Phan
_____________________________________
Presiding:
Jane Phan,
Administrative Law Judge
Appearances:
For Petitioner: PETITIONER REP
For Respondent: Laurie Payne, Tax Compliance Agent
STATEMENT OF
THE CASE
This matter came before the Commission for an
Initial Hearing on July 2, 2001.
APPLICABLE
LAW
The Tax Commission is granted the authority to
waive, reduce, or compromise penalties and interest upon a showing of
reasonable cause. Utah Code Ann. '59-1-401(10).
DISCUSSION
Petitioner is appealing the penalty and interest
assessed for the late payment of its second quarter 2000 sales tax. The amount of the penalty was $$$$$ and the
interest was $$$$$. Petitioner's
representative explained that Petitioner had filed the return timely and
included a check for payment of the tax.
However, the check was returned by his bank for insufficient funds. When Petitioner was notified by its bank
that the check had not gone through, Petitioner's representative called the Tax
Commission. He states that the Tax
Commission employee told him to submit a new check, and he feels in retrospect
that following this advice caused the penalty to assessed. He states that had he just let the original
check be presented a second time, instead of
submitting a new check, he would have not been assessed the
penalty. Petitioner's representative
also pints out that the penalty is harsh and financially hard on Petitioner's
small business.
Respondent's representative explained that the
Tax Commission does not resubmit checks which have been returned for
insufficient funds. However, she
indicated that some banks will resubmit checks for some of their
customers. One point to keep in mind is
if Petitioner's bank would have resubmitted the check it would have been done
so prior to returning the check to the Tax Commission for insufficient
funds. Once the check is returned to
the Tax Commission the penalty is assessed.
After the check is returned tot the Tax Commission, Petitioner's bank
would be unable to resubmit it.
Respondent had pointed out that this was not a
first time error on the part of the Petitioner. It was the fourth delinquency in a 3 year period.
The Commission recognizes that late payment
penalties can be harsh and difficult for a small business to pay. However, the Utah Legislature has determined
that the penalties are to be assessed for these delinquencies and that they are
necessary to encourage timely filing and payment. This situation was not caused by a Tax Commission error. Instead it was an error on the part of
Petitioner.
DECISION AND ORDER
Based upon the foregoing, the Commission finds
that sufficient cause has not been shown to justify a waiver of the penalty or
the interest associated with Petitioner's second quarter 2000 sales tax. It is so ordered.
This decision does not limit a party's right to
a Formal Hearing. However, this
Decision and Order will become the Final Decision and Order of the Commission
unless any party to this case files a written request within thirty (30) days
of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the
address listed below and must include the Petitioner's name, address, and
appeal number:
Utah State
Tax Commission
Appeals
Division
210
North 1950 West
Salt Lake
City, Utah 84134
Failure to request a Formal Hearing will preclude
any further appeal rights in this matter.
DATED this 7th day of August, 2001.
____________________________________
Jane Phan
Administrative Law Judge
BY ORDER OF THE UTAH
STATE TAX COMMISSION:
The
Commission has reviewed this case and the undersigned concur in this
decision.
DATED this 7th day of August, 2001.
Pam Hendrickson R.
Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc
B. Johnson
Commissioner Commissioner