BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
AUDITING
DIVISION OF THE : Appeal No. 86 0171
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
matter came before the Tax Commission for an Informal Hearing on XXXXX. James E. Harward, Hearing Officer, heard the
matter for the Tax Commission. The
Petitioner was represented by XXXXX and XXXXX.
The Auditing Division of the Utah State Tax Commission, Respondent was
represented by XXXXX and XXXXX.
The
Auditing Division of the Utah State Tax Commission conducted an audit of the
Petitioner for the period XXXXX through XXXXX.
Prior to that audit period, another audit had been conducted in
approximately XXXXX. At the conclusion
of the earlier audit, it was determined that the Petitioner should report using
the three factor formula method. The
Petitioner complied with that requirement and reported its income based on the
three factor formula. At the conclusion
of the audit for the XXXXX through XXXXX period, it was determined that the
Petitioner should be reporting on a combined method rather than on a three
factor formula method.
The
Petitioner, rather than argue the matter, determined that it would be better to
settle the issue and paid the tax, but requested a waiver of the interest.
The
Petitioner argued that the audit adjustment was a result of a change in policy
without any notification or change in statutory provisions of the Utah
Code. In fact, the Petitioners were
simply following the advise and requirements of the previous audit by the Tax
Commission.
After
the hearing, XXXXX and XXXXX, representatives of the Audit Division, by memo,
recommended that the Commission waive the full interest in the amount of
$$$$$. The basis for the recommendation
was that (1) the Tax Commission did not publish its intent to audit or allow
combination reporting, (2) the company had filed all years based upon the
determination for the audit years XXXXX and XXXXX, (3) there are grey areas in
relation to the audit, (4) the company could possibly file claim for a refund
protesting the entire audit, and (5) the full amount of the deficiency plus
$$$$$ in interest had been paid, and since the audit, the company has filed on
a combined basis.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that the interest in
the sum of $$$$$ be waived.
DATED
this 3 day of September 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco
Commissioner