BEFORE THE STATE TAX COMMISSION OF UTAH
: FINDINGS OF FACT,
v. ) CONCLUSIONS OF LAW,
: AND FINAL DECISION
COLLECTION DIVISION OF THE )
STATE TAX COMMISSION OF UTAH, ) Appeal No. 85‑0730
: Acct. No. XXXXX
STATEMENT OF CASE
A Formal Hearing was held on XXXXX, before R. H. Hansen, Commissioner, for and in behalf of the Utah State Tax Commission. XXXXX (Petitioner) is appealing the Informal Decision rendered in favor of the Respondent on XXXXX. The Petitioner was represented by XXXXX of XXXXX, Certified Professional Accountants. The Respondents were not represented. The Petitioner was assessed a penalty and interest for having filed its corporate franchise tax return late.
FINDINGS OF FACT
1. Following a corporate reorganization, the Petitioner hired XXXXX, Certified Professional Accountants, to handle its accounting and tax functions. Paper work between Salt Lake City and Price was generally handled through the mail. XXXXX completed a Federal "Application for Automatic Extension of Time to File Corporation Income Tax Return" for Petitioner's fiscal year ending XXXXX. XXXXX mailed the extension request to XXXXX at Price, where the Controller signed it and filed it with the Internal Revenue Service in Ogden on XXXXX.
2. Sometime prior to XXXXX, XXXXX prepared a State of Utah "Application for Extension of Time for Filing Returns" for Petitioner's fiscal year ending XXXXX, and forwarded the request to XXXXX with instructions that it had to be filed by XXXXX. On XXXXX, XXXXX contacted Petitioner to remind them that the Utah extension needed to be filed on that date. At that time Petitioner's controller signed the extension and gave it to his secretary with instructions to mail it that day. The return was either misplaced or lost in the mail as The Utah State Tax Commission has no record of having received the extension request.
3. The return was filed on XXXXX, together with a payment of tax and interest. This was well within the 90 days allowed under the extension, had the extension been granted.
4. Petitioner was sent a notice of penalty due in XXXXX. This was the first indication to Petitioner that the extension had not been received by the Utah State Tax Commission.
5. Petitioner's request for waiver of penalty and interest was denied and an Informal Hearing was subsequently set for XXXXX. A Decision from the Informal Hearing rendered XXXXX, denied Petitioner's request for waiver of penalty and interest.
6. The Tax Commission has no record of Petitioner's filing returns in an untimely fashion in the past. The federal extension for the fiscal year ending XXXXX, was mailed and filed timely.
CONCLUSIONS OF LAW
1. Utah Code Ann. 59‑13‑27 (1953) states that a penalty shall be added to the amount required to be shown as tax on the return if the Petitioner fails to make and file a return within the time prescribed by law. This section further states that the Utah State Tax Commission would have granted an automatic extension of time for the filing of the Utah corporate tax return for a period of ninety days if the State Tax Commission had received a copy of the corporation's form requesting an automatic extension of time for the filing of a federal tax return. Utah Code Ann. 59‑13‑22(2)(b) (1953).
2. Utah Code Ann. 59‑13‑27 (1953) states: "In the case of any failure to make and file a return . . . there shall be added to the amount required to be shown [a penalty] except that when a return is filed after such time and it is shown that the failure to file it was due to reasonable cause and not due to willful neglect, no such addition shall be made to the tax."
3. The Petitioner presented evidence that the taxpayer had an excellent filing record and that the federal application for extension was timely filed. The Petitioner testified further that the paperwork for the state extension application was timely completed and mailed to the Petitioner who in turn verified that it had been mailed to the Utah State Tax Commission. Although much of the evidence presented by the Petitioner was hearsay evidence the Respondent did not appear at the Formal Hearing and thus did not refute any testimony presented by the Petitioner.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that: 1. The Petitioner had reasonable cause for not filing its corporate franchise tax on time.
2. The penalty and interest associated with the filing of Petitioner's corporate tax return is ordered waived.
DATED this 9 day of June, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
Mark Buchi R. H. Hansen
Roger O. Tew Joe Pacheco
NOTICE: It is hereby given that you have 30 days from the date of mailing of this decision to appeal to the Tax Court or the Supreme Court of the State of Utah.