Penalty and Interest
BEFORE THE UTAH STATE TAX COMMISSION
) Appeal No. 01-1361
) Account No. #####
COLLECTION DIVISION OF THE )
UTAH STATE TAX COMMISSION, ) Tax Type: Penalty & Interest
Respondent. ) Judge: Rees
Irene Rees, Legal Counsel / Hearing Officer
For Petitioner: PETITIONERS, Petitioners
For Respondent: Becky McKenzie, Auditor, Auditing Division
STATEMENT OF THE CASE
This matter came before the Commission for Telephone Status Conference on December 12, 2001. Upon determination that Petitioners are asking only for relief from the interest assessment and that no issues of tax liability are in dispute, this matter was converted to an Initial Hearing.
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).
Petitioners became aware of an error in their 1998 state tax return on or about April 20, 2001 when they were contacted by Stacy Porter of the Auditing Division. Ms. Porter notified Petitioners that they had made an error in allocating their income under the "special instructions" provisions. Ms. Porter gave Petitioners instructions for filing correctly and indicated that she would call back with the exact amount due. Ms. Porter never contacted Petitioners again, and she left her employment with the Commission. Eventually, an assessment letter was issued to Petitioners in about August of 2001. The assessment included an interest assessment in the amount of $$$$$. Petitioners do not contest the assessment for additional tax, but they request relief from the interest assessment because the interest amount continued to accumulate while they awaited further information from the Auditing Division. A review of the records tends to corroborate Petitioners' account of events.
The Auditing Division was asked to submit additional post hearing information concerning the amount of interest that could be attributed to Auditing Division's failure to follow up with Petitioners after April 20th. That information indicates that the amount of interest from the date that Petitioners' return was due until the date that Ms. Porter contacted them was $$$$$. Interest continued to accumulate at about 6 2 cents per day to a total of $$$$$ as of the date of the hearing.
The amount of interest assessed from the date that the return was due until the date that Petitioners were contacted by the Auditing Division is clearly a legitimate assessment against Petitioners. Because it resulted from an error on Petitioners' part and we will not waive it. Additionally, any interest accumulating after the date of the assessment letter is also a legitimate assessment against Petitioners because they allowed the interest to continue to accumulate. The Commission waives all interest that accrued on Petitioners' account during the period of April 20, 2001 to August 17, 2001, which is $$$$$.
DECISION AND ORDER
The Commission orders a waiver of $$$$$ of interest on Petitioners' account. The remainder of the interest balance is due.
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 28th day of December, 2001.
BY ORDER OF THE UTAH STATE TAX COMMISSION:
The Commission has reviewed this case and the undersigned concur in this decision.
DATED this 28th day of December, 2001.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson