BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 0074
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
STATEMENT OF CASE
An Informal hearing was held on August 18, XXXXX. XXXXX, Hearing Officer, heard the matter for the Utah State Tax Commission. XXXXX represented the Petitioners.
The penalty and interest assessment against Petitioner's XXXXX and XXXXX individual income tax obligations is in dispute. Petitioners testified that they sold their home in XXXXX and tax liens for back taxes were paid at that time. In June, XXXXX, Petitioners received a letter saying that they owed taxes from XXXXX and XXXXX. The Petitioners paid the tax but did not pay the penalty amount. Petitioners dispute the penalty and interest assessment because the Tax Commission took more than three and four years respectively to notify Petitioners that there were amounts owing from XXXXX and XXXXX.
1. Utah Code Ann. § 59-14A-86(a) (1986) provides:
Except as otherwise provided in this section, the amount of any tax
imposed by this act shall be assessed within three years after the return was
filed (whether or not such return was filed on or after the day prescribed),
and no proceeding in court without assessment for the collection of such tax
shall be begun after the expiration of such period.
2. Utah Code Ann. § 59-14A-86(b) provides, for the purposes of this section, that a return of tax imposed by the Individual Income Tax Act shall be deemed to be filed on the last day prescribed by law for the filing thereof.
3. Utah Code Ann. § 59-14A-39(h) provides that any reference in the Individual Income Tax Act to income tax or tax imposed by the Act shall be deemed to also refer to penalties provided by Section 89(h). Utah Code Ann. § 78-12-26(4) sets forth a three-year statute of limitations for "[a]n action for a liability created by the statutes of this state, other than for a penalty or forfeiture under the laws of this state, except where in special cases a different limitation is prescribed by the statutes of this state."
4. The Commission finds that more than three years passed between the time the statute of limitations on Petitioner's XXXXX liability began to run (April 15, XXXXX) and the end of the three-year statute (April 15, XXXXX).
DECISION AND ORDER
Based on the evidence presented at the hearing, the written evidence in the file, and the statutes above cited, it is the Decision and Order of the Utah State Tax Commission that the penalty and interest assessed against Petitioner's XXXXX and XXXXX individual income tax liabilities be waived for failure of the Respondent to collect the penalty and interest within the time provided by law. Any interest associated with the penalty is ordered to be reduced accordingly.
DATED this 3 day of September, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco