02-0408

Withholding Tax

Signed 8/12/02

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITONER, )

) ORDER

Petitioner, ) Appeal No. 02-0408

)

v. ) Account No. #####

)

TAXPAYER SERVICES DIVISION OF ) Tax Type: Withholding Tax

THE UTAH STATE TAX )

COMMISSION, ) Tax Year: 2001

)

Respondent. ) Judge: Davis

_____________________________________

Presiding:

G. Blaine Davis, Administrative Law Judge

Appearances:

For Petitioner: PETITIONER REP, CPA

For Respondent: Ms. Laurie Payne, from the Taxpayer Services Division

Ms. Vickie Hymas, 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 June 20, 2002.

Petitioner requested a waiver of penalties and interest for the late filing of the April and May 2001 withholding tax return.

Petitioner's original bookkeeper took a leave of absence for 18 months. During that time, a replacement bookkeeper was hired. Petitioner represented the replacement bookkeeper represented she was experienced and knowledgeable in the filing of tax returns, and the owner of the business left the responsibility for filing returns to that person, who did not timely file for April and May 2001.

Petitioner has argued that hiring a responsible person and entrusting the filing of returns to such an individual meets the responsibilities of the owner, and should constitute reasonable cause for waiving of penalties caused by the individual.

Respondent has returns which were late for January, February, April, July and August of 2000. The penalties were waived for all of those filing periods. In addition, the April and May 2001 returns were late, which are the periods for which waivers of penalty and interest have been requested herein. The returns for July, October and November 20001 were also delinquent.

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 is not entitled to a waiver based upon hiring a person whom they believed to be responsible and knowledgeable. Further, the employer is always responsible for the actions taken by the employee.

With a high number of delinquencies, there is a strong pattern of non-compliance, and it does not justify a finding of reasonable cause to waive the penalty.

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 interest associated with the April and May 2001 withholding tax returns. 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

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 12^th day of August , 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 12^th day of August , 2002.

Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner

Palmer DePaulis Marc B. Johnson

Commissioner Commissioner