86-0272 to 86-0275 - Sales

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX, )

:

Petitioner, )

v. : INFORMAL DECISION

)

:

COLLECTION DIVISION OF THE ) Appeal No. 86-0272

STATE TAX COMMISSION OF UTAH, : Acct. No. XXXXX

)

Respondent. :

_____________________________________

XXXXX, )

:

Petitioner, )

:

v. )

:

)

COLLECTION DIVISION OF THE : Appeal No. 86-0273

STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX

:

Respondent. )

_____________________________________

XXXXX, )

:

Petitioner, )

:

v. )

:

)

COLLECTION DIVISION OF THE : Appeal No. 86-0274

STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX

:

Respondent. )

_____________________________________

XXXXX, )

:

Petitioner, )

:

v. )

:

)

COLLECTION DIVISION OF THE : Appeal No. 86-0275

STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX

:

Respondent. )

_____________________________________

STATEMENT OF CASE

An Informal Hearing was held on XXXXX. James E. Harward, Hearing Officer, heard the matter for the Utah State Tax Commission. XXXXX represented the Petitioners.

XXXXX testified that he was involved with a corporation for holding commercial interests which began as a convenience store and expanded to a cafe and motels. XXXXX was hired as an employee and in XXXXX, was given the accountant's job. XXXXX bought into the corporation as a shareholder and became a corporate officer. She was responsible for paying taxes.

XXXXX testified that XXXXX began having personal problems and the corporation divided. XXXXX left the corporation and XXXXX was the president of the corporation. XXXXX asked XXXXX to come back to take care of the tax problems in XXXXX. XXXXX testified that the taxes were a mess at that time. XXXXX decided to leave the corporation, indicating that she would take payments as a buy out. She disappeared seven days later. XXXXX had sent checks to the Tax Commission for the sales tax and transient room tax liabilities due, but the checks were returned due to insufficient funds in Petitioners' accounts. It was discovered that XXXXX had withdrawn several thousand dollars from the banks and that she had been taking money since XXXXX.

XXXXX testified that in order to cover the tax liabilities, the convenient stores and motel were sold.

Respondent did not appear at the hearing and did not present evidence concerning the Petitioners' account history; however, Respondent recommended partial waivers of the penalties but indicated that there were also some business problems. Respondent did not present evidence to support its indication that Petitioners had business problems separate from XXXXX's embezzlement.

FINDINGS

1. Utah Code Ann. 59-15-8 (Supp. 1986) provides in part:

If any part of the deficiency is due to negligence or intentional disregard of authorized rules or regulations with knowledge thereof, but without intent to defraud, there shall be added the greater of $50 or ten per cent of the total amount of the deficiency and interest at the rate prescribed . . . . Upon making a record of its reasons, the commission shall have the power, in its discretion, to waive, reduce or compromise any of the civil penalties or interest provided in this chapter.

2. It has not been the practice of the Utah State Tax Commission to waive interest because the Tax Commission did not have use of the funds for the period in question. Therefore, interest will not be waived for any of the liability periods in question.

3. The Commission finds that for those quarters where the sales or transient room tax returns were timely filed and a check for the amount of the tax liability was included but was returned for insufficient funds due to XXXXX's embezzlement, the Petitioners should not be required to pay the penalty. Utah Code Ann. 59-15-8 (Supp. 1986) provides for a penalty in the event that the taxpayer is negligent or intentionally disregards the law. Where XXXXX embezzled money from the Petitioners, there is no indication that the Petitioners were negligent. Rather, the Petitioners made every effort to timely pay and file their sales and transient room tax liabilities.

4. Where the sales or transient room tax liability was filed and paid late, and there is no indication that the check included with the return was returned to Petitioners for insufficient funds, the penalty will not be waived. The late filings indicate negligence on the part of the Petitioners.

5. Where the return was filed late and a check was included with the return for the amount due but the check was returned to the Petitioners for insufficient funds due to XXXXX's embezzlement, the penalty will not be waived.

6. Where the check included with the return was returned for insufficient funds due to XXXXX's embezzlement, and the tax has not yet been paid, the penalty will be waived, but the tax is due immediately and must be paid within ten (10) days of the mailing of this decision. If the tax is not paid within ten (10) days of the mailing of this decision a penalty will then be assessed as if the tax were due on the date of mailing this decision. If the return were filed late, the penalty will not be waived.

DECISION AND ORDER

XXXXX Appeal No. 86-0272

1. The request for penalty and interest waiver for the XXXXX, quarter is denied. The return was filed on XXXXX, and the check was paid on XXXXX. There is no indication that the late filing and payment were due to embezzlement.

2. The penalty and interest waiver request for the XXXXX, quarter is denied. The return was filed and the check was paid on XXXXX.

3. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. However, the tax is due immediately and must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

4. The request for penalty waiver for the XXXXX, quarter is granted. The interest waiver request is denied. The check was returned for insufficient funds due to XXXXX's embezzlement.

5. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. The return was filed timely but the check was returned for insufficient funds due to XXXXX's embezzlement.

XXXXX, Appeal No. 86-0273

6. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. The return was filed on time but was returned for insufficient funds due to XXXXX's embezzlement.

7. The penalty and interest waiver request for the XXXXX, quarter is denied. The return was filed on XXXXX, and the check was returned for insufficient funds due to XXXXX's embezzlement.

8. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. The check was mailed with the return but was returned for insufficient funds due to XXXXX's embezzlement.

9. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. The return was filed on XXXXX, but the check was returned for insufficient funds due to XXXXX's embezzlement.

10. The penalty waiver request for the XXXXX, quarter is granted. The interest waiver request is denied. The return was filed on XXXXX, but the check was returned for insufficient funds due to XXXXX's embezzlement. However, the tax is due immediately and must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

XXXXX, Appeal No. 86-0274

11. The penalty waiver request on the XXXXX, quarter for sales tax and transient room tax is granted. The interest waiver request is denied. The returns were filed on XXXXX, but the checks were returned for insufficient funds due to XXXXX's embezzlement.

12. The penalty waiver request for the XXXXX, quarter for sales tax and transient room tax is granted. The interest waiver request is denied. The returns were filed on XXXXX, but the checks were returned for insufficient funds due to XXXXX's embezzlement.

13. The request for penalty waiver is granted on the XXXXX, quarters for sales and transient room tax. The interest waiver request is denied. However, the tax must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

14. The penalty waiver request for the XXXXX, quarter for sales tax and transient room tax is granted. The interest waiver request is denied. The returns were filed on time but the checks were returned for insufficient funds due to XXXXX's embezzlement. However, the tax must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

XXXXX, Appeal No. 86-0275

15. The penalty waiver request on the XXXXX, quarters for sales tax and transient room tax is granted. The interest waiver request is denied. The returns were filed on time, but the checks were returned for insufficient funds due to XXXXX's embezzlement. However, the tax must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

16. The penalty and interest waiver request for the XXXXX, quarter for sales tax and transient room tax is granted. The interest waiver request is denied. The returns were filed on time, but the checks were returned due to insufficient funds because of XXXXX's embezzlement. However, the tax must be paid within ten (10) days of mailing this decision. If the tax is not so paid, a penalty will be assessed as if the tax were due on the date this decision was mailed.

17. The Collection Division is ordered to adjust its records in accordance with this Decision and to refund penalty as appropriate and apply any refunded amounts to amounts still outstanding.

DATED this 15 day of October, 1986.

BY ORDER OF THE STATE TAX COMMISSION OF UTAH.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner