01-0795

Income Tax

Signed 11/8/01

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, ) ORDER

)

Petitioner, ) Appeal No. 01-0795

)

v. ) Account No. #####

)

TAXPAYER SERVICES DIVISION )

OF THE UTAH STATE TAX ) Tax Type: Income Tax

COMMISSION, )

)

Respondent. ) Judge: Davis

_____________________________________

Presiding:

G. Blaine Davis, Administrative Law Judge

Appearances:

For Petitioner: PETITIONER

For Respondent: Mr. Gale Francis, Assistant Attorney General

Ms. Julie Halvorsen, from the Taxpayer Services Division

STATEMENT OF THE CASE

This matter came before the Utah State Tax Commission for an Initial Hearing pursuant to the provisions of Utah Code Ann. §59-1-502.5, on October 15, 2001.

Petitioner filed his Utah individual income tax return for 1997 on October 30, 1998. In that return, he claimed "a 'qualified' retirement income for a deduction of $$$$$"

On July 14, 2000, the Auditing Division issued to Petitioner a Statutory Notice of Audit Change, in which it disallowed the retirement income deduction of $$$$$ because Petitioner did not meet the mandatory retirement age for his employer's retirement plan. Petitioner is less than 65 years of age.

The Statutory Notice gave Petitioner 30 days to appeal the decision and outline his appeal rights. Petitioner's tax preparer talked with the auditor, and Petitioner represented it was two days after the due date. However, Respondent has represented the conversation was on or about September 19, 2000. Petitioner also represented he talked with someone from the Division approximately two days after the due date.

Petitioner did not file a Petition for Redetermination until May 15, 2001.

At the hearing, Petitioner acknowledged that the amount of tax due was appropriate, but he did believe there were some difficult dealings with individuals at the Tax Commission, and requested that the tax be "forgiven and written off".

In addition, Petitioner was charged a penalty of $$$$$ for not making the payment on a timely basis.

APPLICABLE LAW

Utah Code Ann. §59-10-114(3)(a), provides as follows:

(a) For purposes of Subsection (2)(d), the amount of retirement income subtracted for taxpayers under 65 shall be the lesser of the amount included in Federal Taxable Income, or $4,800, . . . ."

The Tax Commission is granted authority to waive, reduce or compromise penalties and interest upon a showing of reasonable cause. Utah Code Ann. §59-1-401(10).

DECISION AND ORDER

Based upon the foregoing, it is hereby determined that the audit adjustment made by Respondent is correct, and with respect to the tax imposed by that audit assessment, the determination of the Auditing Division is hereby sustained.

However, it is also determined that the penalty imposed in this matter in an amount of $$$$$, should be waived, based upon a finding of reasonable cause that the Petitioner was only two days late in contacting the Respondent, and this is a first time error.

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 8^th day of November, 2001.

____________________________

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 8^th day of November, 2001.

Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner

Palmer DePaulis Marc B. Johnson

Commissioner Commissioner