02-1910

Penalty & Interest

Signed 3/17/03

BEFORE THE UTAH STATE TAX COMMISSION

____________________________________

PETITIONER, )

) ORDER

Petitioner, )

) Appeal No. 02-1910

v. )

) Account No. #####

TAXPAYER SERVICES DIVISION, )

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

)

Respondent. ) Judge: Phan

_____________________________________

Presiding:

Jane Phan, Administrative Law Judge

Appearances:

For Petitioner: PETITIONER REP

For Respondent: Vickie Hymas, Tax Compliance Agent

STATEMENT OF THE CASE

This matter came before the Commission for an Initial Hearing on February 26, 2003, on Petitioner's appeal of penalties and interest assessed for the late filing and payment of withholding taxes for the periods of July 2001, August 2001 and May 2002.

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's representative explained that Petitioner is a non-profit organization. There had been a lapse of time between when a prior bookkeeper left her employment with Petitioner and a new bookkeeper was retained. Prior to the employment of the new bookkeeper the July and August 2001 returns went unfiled and unpaid. As soon as the new bookkeeper received notice from the Tax Commission concerning the delinquency the returns were filed. Petitioner's representative stated that the reason the May 2002 return was late was simply a financial one.

Respondent's representative points out that this was not a first time error and the fact that Petitioner is a non-profit organization is not a basis for waiver of late filing and late payment penalties. In additional financial hardship is not basis for waiver of penalties.

DECISION AND ORDER

The law requires penalties to be assessed for late filing and late payment of taxes. Unfortunately, this is necessary to encourage timely filing and payment, so that business and organizations will make tax requirements a priority. Financial hardship is not considered grounds for waiver of penalties through the appeal process. However, regardless of this decision, current ability to pay any unpaid portion of tax, penalty and interest may be considered in the "Offer in Compromise" program, but Petitioner would have to apply for that directly with the Taxpayer Services Division and provide the required financial information. The Commissioners do not know whether Petitioner qualifies for the program. Alternatively, Petitioner may set up a monthly payment plan for the amount of the deficiency.

Based upon the foregoing, the Commission finds that sufficient cause has not been shown to justify a waiver or reduction of late payment and late filing penalties or interest for the periods of July 2001, August 2001 and May 2002. 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 17^th day of March , 2003.

______________________________

Jane Phan

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 17^th day of March , 2003.

Pam Hendrickson R. Bruce Johnson

Commission Chair Commissioner

Palmer DePaulis Marc B. Johnson

Commissioner Commissioner