86-0048 thru 86-0057


Signed 3/20/87








XXXXX,                            )


          Petitioner,             )    FINDINGS OF FACT,

                                  :    CONCLUSION OF LAW

v.                                )    AND FINAL DECISION



COLLECTION DIVISION OF THE        :    Appeal Nos.  See Attachment

STATE TAX COMMISSION OF UTAH,     )    Acct. Nos.  See Attachment


          Respondent.             )



                             STATEMENT OF CASE

          This matter came before the Utah State Tax Commission for an Formal Hearing on February 23, XXXXX.  XXXXX, Hearing Officer, heard the matter for the Tax Commission.  XXXXX appeared representing the various trusts.

          Based upon the evidence presented at the formal hearing the Utah State Tax Commission enters its:

                             FINDINGS OF FACTS

          1.  The trust was created in XXXXX.  The trustee, XXXXX was told by an attorney, XXXXX that there was not tax due.  The attorney was referring to gift tax not income tax.  The trustee, assuming that there was no tax due, thought that referred to all taxes and did not file income tax returns for the trusts.

          2.  Trust monies were placed with XXXXX's Trust Department.  XXXXX then issued K‑l Forms which the Internal Revenue Service matched with the XXXXX return which indicated that no returns had been filed for the trusts.

          3.  In late XXXXX and XXXXX, the Petitioners prepared and filed returns for both the IRS and the Utah State Tax Commission.

          4.  The IRS waived all penalties associated with the late filings.

                            CONCLUSIONS OF LAW

          1.  The Tax Commission may (emphasis added) waive or reduce the civil penalties provided in the statute for failure to file returns and pay income tax.  Utah Code Ann.  ' 59‑14A‑90(2)(6).

          2.  That the Tax Commission is obligated to assess a penalty for failure to file an income tax return and pay the tax required under this Act on or before the date prescribed.  This penalty may be waived if it shown that it is reasonable cause and not through willful neglect.  Utah Code Ann.  ' 59‑14A‑89(a).

          3.  If the Tax Commission waives or reduces the penalty, it must make a record of its reason for doing so.  Utah Code Ann.  ' 59‑14A‑92(6).

          4.  The trustee's unsophisticated understanding of tax laws and misplaced reliance upon attorney's advise is not reasonable cause that would justify the reduction or waiver of the penalties.

                            DECISION AND ORDER

          Based upon the foregoing, it is the Decision and Order of the Utah State Tax Commission that the request for waiver of penalty and interest of the Petitioners is hereby denied.

          DATED this 20 day of March, 1987.



R. H. Hansen                      Roger O. Tew

Chairman                          Commissioner


Joe B. Pacheco                    G. Blaine Davis

Commissioner                      Commissioner


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




Appeal Nos. 86-0048 thru 86-0057





Appeal No.                        Serial No.


86‑0048                           XXXXX

86‑0049                           XXXXX

86-0050                           XXXXX

86‑0051                           XXXXX

86‑0052                           XXXXX

86‑0053                           XXXXX

86‑0054                           XXXXX

86‑0055                           XXXXX

86‑0056                           XXXXX

86‑0057                           XXXXX