01-1353

Penalty and Interest

Signed 12/28/01

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, )

) ORDER

Petitioner, )

) Appeal No. 01-1353

v. )

) Account No. #####

COLLECTION DIVISION OF THE )

UTAH STATE TAX COMMISSION, ) Tax Type: Penalty & Interest

)

Respondent. ) Judge: Rees

_____________________________________

Presiding:

Irene Rees, Hearing Officer

Appearances:

For Petitioner: PETITIONER, Petitioner

For Respondent: Brent Taylor, Audit Manager, Auditing Division

STATEMENT OF THE CASE

This matter came before the Commission for a Telephone Status Conference on December 12, 2001. Upon determination that Petitioner has no dispute regarding the assessment of tax against him and is only asking for a waiver of the penalty and interest assessment, this matter was converted to an Initial Hearing.

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 admitted that he made an error in preparing his 1997 return that resulted in an assessment against him. The assessment included tax in the amount of $$$$$ and interest in the amount of $$$$$. In addition, because Petitioner did not make timely payment of the assessment, a late-payment penalty of $$$$$ was assessed against his account for 1997. To date, Petitioner has not paid the assessment and interest has continued to accumulate to $$$$$ as of December 18, 2001.

Petitioner states that he did not have notice of the assessment against him until August 17, 2001. Petitioner stated that he moved a number of times in the past few years and the notice may not have been properly forwarded by the Postal Service.

The Commission has authority to grant relief from interest assessments, but it will do so only upon a showing the interest resulted from a Tax Commission error. There is no such showing in this case. The original error that triggered the assessment was an error on part of Petitioner, and all notices were mailed to Petitioner's address or addresses on record with the Commission. Therefore, the Commission denies Petitioner's request for relief from the interest assessment.

With regard to the penalty assessment, the evidence shows that 1997 was the first year that Petitioner was required to file income tax in Utah, so the error was a first time error. The Commission notes that Petitioner has since been assessed late filing penalties for tax years 1999 and 2000, but it is the Commission's policy to waive penalties for first time error.

DECISION AND ORDER

Based upon the foregoing, the Commission finds that sufficient cause has not been shown to grant a waiver of the interest. The Commission does, however, grant a waiver of the penalty.

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 28^th day of December, 2001.

____________________________________

Irene Rees

Legal Counsel / Hearing Officer

BY ORDER OF THE UTAH STATE TAX COMMISSION:

The Commission has reviewed this case and the undersigned concur in this decision.

DATED this 28^th day of December, 2001.

Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner

Palmer DePaulis Marc B. Johnson

Commissioner Commissioner