Penalty and Interest
BEFORE THE UTAH STATE TAX COMMISSION
) Appeal No. 01-0475
) Account No. #####
TAXPAYER SERVICES DIVISION, )
UTAH STATE TAX COMMISSION, ) Tax Type: Penalty & Interest
Respondent. ) Judge: Phan
Jane Phan, Administrative Law Judge
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.
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).
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
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.
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