Penalty & Interest

Signed 1/29/03







Petitioner, )

) Appeal No. 02-1701

v. )

) Account No. #####


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


Respondent. ) Judge: Phan




Jane Phan, Administrative Law Judge



For Petitioner: PETITIONER REP 1, Office Manger

PETITIONER REP 2, HR Representative

For Respondent: Laurie Payne, Tax Compliance Agent




This matter came before the Commission for an Initial Hearing on January 23, 2003 . Petitioner is appealing penalties assessed for the monthly filing periods of January, February, and April 2002. The penalties were assessed for the late filing and late payment of withholding tax. The amount of the penalties for each period are as follows: January 2002 $$$$$; February 2002 $$$$$; and April 2002 $$$$$.


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).


Petitionerís representatives explained that for the January and February 2002 periods, Petitioner was relying on his office manager to timely file and pay the taxes. There had been an ongoing problem with the office manager as there was a number of the previous filings that were late. Petitioner thought that the January and February periods had been filed and paid but the office manager had failed to do so. In March 2002, Petitioner contracted with a professional payroll company to do the payroll and the withholding starting from March going forward. It was the payroll companies understanding that Petitioner was a quarterly filer, so Marchís filing was timely. However, they did not file Aprilís withholding at the end of May as would be required for a monthly filer, thinking the second quarter filing was not due until the end of July. The payroll service found out about the error prior to when Mayís filing would have been due and they corrected their system to a monthly filing status. There have been no additional errors since the professional payroll service has taken over the account.

Respondentís representative explained that the reason Respondent had not waived the penalties was the number of prior delinquencies. There had been six late payments and/or filings in the three years prior to the three periods at issue, a total of nine errors in a three-year period.

Penalties are often waived if it is the first error in a three-year period as mistakes will happen. However, Petitioner as the business owner, is ultimately responsible to oversee his employees and make sure taxes are paid. In this case the number of errors indicate an ongoing problem and Petitioner should have been more careful in supervising his tax filings. The error for the April 2002 period was a first error on this account for the new payroll service, but it was certainly not Petitionerís first error.


Based upon the foregoing, the Commission finds that sufficient cause has not been shown to justify a waiver of the penalties assessed for the January, February and April 2002 withholding tax periods. 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 29th day of January , 2003.



Jane Phan

Administrative Law Judge








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

DATED this 29th day of January , 2003.




Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner






Palmer DePaulis Marc B. Johnson

Commissioner Commissioner