86-0207 - Individual Income




            Petitioner,                                                         )

                                                                                    :           INFORMAL DECISION

v.                                                                                 )


COLLECTION DIVISION OF THE                          )

STATE TAX COMMISSION OF UTAH,                  :           Appeal No. 86-0207

                                                                                    )           Account No. XXXXX


            Respondent.                                                     )



            This is an appeal to the Utah State Tax Commission from a decision of the Collection Division of the Utah State Tax Commission (Respondent) to assess penalty and interest on Account No. XXXXX for the tax year XXXXX.  XXXXX (Petitioner) waived his right to an oral hearing.  Therefore, the Commission decided this matter based on the pleadings before it.

            Petitioner drew a check on his bank account to pay the taxes due for the tax year XXXXX.  Petitioner mistakenly assumed that funds which were to be transferred to his bank account had been transferred by the time the check was drawn.  The Tax Commission twice attempted to cash the check but it was returned for insufficient funds on the 25th and 27th of April, XXXXX.  The money was later transferred but the Tax Commission did not send the check through again and made no further attempt to collect until December, XXXXX.

            Petitioner asserts that it is unreasonable for the state to wait two years before trying to collect.  Petitioner asserts that the delay by the Tax Commission directly resulted in the penalty and interest which Respondent assessed on Petitioner's account.  Petitioner therefore requests a waiver of penalty and interest.


            The burden is on a taxpayer to insure that taxes are paid and not on the Tax Commission to second-guess the taxpayer's financial situation.  It was reasonable for the Tax Commission to conclude that Petitioner's bank account had no funds after the check had been returned twice for insufficient funds.  The Tax Commission did not have a duty to continue presenting the check until it finally cleared.

            Petitioner was put on notice that problems existed concerning this check when Petitioner's bank informed Petitioner of the insufficient funds.  At this time Petitioner should have contacted the Tax Commission to inform it when the bank account would have sufficient funds or to work out another method of payment.

            Petitioner was put on further notice each month when he received a statement of his bank account.  Each month the Petitioner should have determined from the bank statement that the check had not cleared yet.  Petitioner should have contacted the Tax Commission to find out why the check had not cleared.  It was unreasonable for Petitioner to wait over two years without once contacting the Tax Commission to resolve the problem.


            The Tax Commission hereby denies the Petition for waiver of penalty and interest on Account No. XXXXX for the tax year XXXXX.  The assessment of penalty and interest by the Collection Division of the Utah State Tax Commission is hereby sustained.

            DATED this 27 day of August, 1986.


R. H. Hansen                                                                Roger O. Tew

Chairman                                                                      Commissioner

Joe B. Pacheco