BEFORE THE UTAH STATE TAX COMMISSION
PETITIONER, ) FINDINGS OF FACT,
) CONCLUSIONS OF LAW,
Petitioner, ) AND FINAL DECISION
v. ) Appeal No. 01-0679
) Account No. #####
AUDITING DIVISION OF )
THE UTAH STATE TAX ) Tax Type: Income Tax
COMMISSION, ) Tax Years:
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: No one appeared
For Respondent: Mr. Tim Bodily, Assistant Attorney General
Mr. Dan Engh, from the Auditing Division
Mr. Steve Nelson, from the Auditing Division
STATEMENT OF THE CASE
This matter came before the Utah State Tax Commission for a Formal Hearing on April 29, 2002. Based upon the evidence and testimony presented at the hearing, the Tax Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is income tax.
2. The years in question are 1998 and 1999.
3. For each of the years in question, Respondent sent to Petitioner a Statutory Notice of Estimated Income Tax. This notice was sent pursuant to information received from the Internal Revenue Service that Petitioner had income and had not filed an income tax return thereon.
4. For 1998, Petitioner had W-2 forms issued to him showing income in an amount of $$$$$.
5. For 1999, Petitioner had W-2's issued to him for income in an amount of $$$$$.
6. Respondent assessed income tax, a $500 penalty for attempt to evade, a 10% penalty for failure to file, and a 10% penalty for failure to pay, together with interest at the statutory rate.
7. The penalty for attempting to evade is based on the fact that for 1992 and 1995, Petitioner also had appeals at the State Tax Commission in which he claimed his income was not subject to income tax. Those claims were dismissed by the Tax Commission, and a decision was issued rejecting the contentions of Petitioner. Therefore, Petitioner knew, or should have known, that there was no legal basis for his positions, and that his arguments were improper.
8. Petitioner did not appear at the hearing, so there is no explanation for his position.
The state of Utah imposes income tax on individuals who are residents of the state in Utah Code Ann. '59-10-104 as follows:
". . . a tax is imposed on the state taxable income, as defined in Section 59-10-112, of every resident individual . . ."
State taxable income is defined in Utah Code Ann. '59-10-112 as follows:
"State taxable income in the case of a resident individual means his federal taxable income (as defined by Section 59-10-111) . . ."
Federal taxable income is defined in Utah Code Ann. '59-10-111 as follows:
"Federal taxable income" means taxable income as currently defined in Section 63, Internal Revenue Code of 1986.
Taxable income is defined in the Internal Revenue Code at 23 USC 63 as:
"Except as provided in subsection (b), for purposes of this subtitle, the term "taxable income" means gross income minus the deductions allowed by this chapter (other than the standard deduction)."
Gross income is defined in the Internal Revenue Code at 23 USC 61(a) as:
"Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items; . . ."
The requirement to file a federal income tax return is established by IRC.'6012.
Utah Code Ann. '59-10-502, provides in relevant part:
"An income tax return with respect to the tax imposed by this chapter shall be filed by:
(1) Every resident individual, estate, or trust required to file a federal income tax return for the taxable year; . . . ."
DECISION AND ORDER
Based upon the foregoing, the Tax Commission finds that the position of Petitioner is without merit, and the Petition for Redetermination is denied. The audit assessment made by Respondent, together with penalties and interest is affirmed. It is so ordered.
DATED this 24th day of May , 2002.
G. Blaine Davis
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 24th day of May , 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson