85-1532 - Sales

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX,                                                                                 :

            Petitioner,                                                         :

                                                                                    :           INFORMAL DECISION

v.                                                                                 :

                                                                                    :

AUDITING DIVISION OF THE                                :           Appeal No. 85 1532

State Tax Commission of Utah                                      )           Acct. No. XXXXX

            Respondent                                                      :

_____________________________________

STATEMENT OF CASE

            This is a request for waiver of penalty and interest from XXXXX (Petitioner).  The Auditing Division of the State Tax Commission of Utah (Respondent) prepared an amended report indicating a tax liability of $$$$$, interest of $$$$$, and penalty of $$$$$.  Petitioner is in agreement with the tax liability but appeals the penalty and interest because there was no intent to withhold the tax.

            An Informal Hearing was held on this matter on XXXXX, of the Utah State Tax Commission.  James E. Harward, Hearing Officer, heard the matter for the Commission.  XXXXX and XXXXX represented the Petitioner.  No one appeared representing the Respondent.  Based on the evidence of the written documentation the Commission makes the following determinations:

            1.  The audit period in question is from XXXXX, through XXXXX.

            2.  The Petitioner acquired a computer system in XXXXX.  Computer and programming errors contributed to a significant amount of the tax errors during the time period.

            3.  Petitioner wrote a check in the amount of $$$$$ on XXXXX. Approximately $$$$$ were paid out of pocket and $$$$$ were collected after the audit.  Petitioner thus asserts that he did not have use of the money during the period in question and should not be assessed interest on the same.

            4.  Although Petitioner did not intentionally withhold the tax due and owing to the State of Utah, Petitioner was negligent in not assuring that the computer system was operational.  Negligence is sufficient to incur a penalty of 10% of the total amount of the deficiency.  Utah Code Ann. 59-15-8 (1953).  Interest of $$$$$ was properly assessed.  It irrelevant whether or not Petitioner had the use of the money during the period in question.  The fact is the State was denied use of the money during this period.

DECISION AND ORDER

            Based on the foregoing facts and evidence presented at the Informal Hearing, it is the Decision of the Utah State Tax Commission that the penalty imposed by the Auditing Division be affirmed and that the interest also be affirmed in full.

            DATED this 11 day of July, 1986.

BY ORDER OF THE STATE TAX COMMISSION OF UTAH.

ABSENT

Mark K. Buchi                                                             R. H. Hansen

Chairman                                                                      Commissioner

Roger O. Tew                                                              Joe B. Pacheco

Commissioner   Commissioner