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 It was discovered that XXXXX had withdrawn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