BEFORE THE UTAH STATE TAX COMMISSION
) Appeal No. 02-0717
v. ) Account No. #####
AUDITING DIVISION OF ) Tax Type: Income Tax
THE UTAH STATE TAX ) Tax Year: 1998
Respondent. ) Judge: Davis
G. Blaine Davis, Administrative Law Judge
For Petitioner: PETITIONER REP, CPA
For Respondent: Mr. Clark Snelson, Assistant Attorney General
Mr. Dan Engh, from the Auditing Division
Ms. Brenda Salter, from the Auditing 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 December 17, 2002.
On his 1998 Utah Individual Income Tax Return, Petitioner deducted an amount of $$$$$ for withholding from mineral production. Respondent made an adjustment and reduced the amount of withholding to $$$$$.
Utah Code Ann. §59-6-102 requires the withholding of an amount equal to 5% of the amount which would have otherwise been payable to the person entitled to the payment
The statement of Utah tax withheld on mineral production for 1998 received by Petitioner shows withholding of $$$$$, but shows a gross production payment received by Petitioner of only $$$$$. Therefore, the form would indicate there was a withholding of several times more than the payment received by the taxpayer. It appears that the company may have reversed those numbers on the form, so that the number should have been in the opposite box on the form.
. If Petitioner was entitled to $$$$$, five percent withholding would be $$$$$. Therefore, the numbers would corroborate that the company making out the form just mixed up the boxes in which those numbers should have been inserted. That substantiates the theory presented by Respondent.
Petitioner did not have any response or evidence to present, except his accountant argues that the return was properly prepared based on the information provided on the form, and that no further information has been received by the taxpayer to require the filing of an amended return.
Petitioner did not present any affirmative evidence to establish that the audit assessment was not correct.
Utah Code Ann. §59-6-102 provides in relevant part:
“(1) Except as provided in subsection (2), each producer shall deduct and withhold from each payment being made to any person in respect to production of minerals in this state, but not including that to which the producer is entitled, an amount equal to 5% of the amount which would have otherwise been payable to the person entitled to the payment.
. . . .
(3)(a) A person who files a tax return with the state in accordance with the following is entitled to a credit against the tax reflected on the return for the amount withheld by the producer under subsection (1):”
Utah Code Ann. §59-10-543 imposes the burden of proof upon Petitioner.
DECISION AND ORDER
Based upon the foregoing, the Commission hereby determines that Petitioner has not met his burden of proof to establish that he was entitled to the mineral production tax credit in the amount deducted on his return. Therefore, the audit assessment is hereby sustained, and the Petition for Redetermination is denied. 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
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 30th day of December , 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 30th day of December , 2002.
Pam Hendrickson R. Bruce Johnson
Commission Chair Commissioner
Palmer DePaulis Marc B. Johnson