BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 0308
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
STATEMENT OF CASE
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 sales and use tax account No. XXXXX for XXXXX, since a required 90% prepayment was not made. An Informal Hearing was held on XXXXX, in the offices of the Utah State Tax Commission. James E. Harward, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner.
The prepayment for the second quarter of XXXXX, was due by XXXXX. On XXXXX, Petitioner learned of embezzlement by his bookkeeper. Petitioner stated that the bookkeeper traded accounts receivable checks for cash and wrote herself a check in May. The week the return was due, the situation came to a head. The bookkeeper was fired and the records were audited. The bookkeeper was subsequently found guilty of embezzling $$$$$ from Petitioner and sentenced by the First District Court.
Petitioner paid the sales tax for the second quarter of XXXXX by XXXXX. Respondent assessed a penalty of $$$$$ and interest of $$$$$.
Petitioner has been in business since XXXXX and has a good filing history.
Because the embezzlement occurred so close to the filing date of XXXXX, and since Petitioner's records were being audited during the week that the return was due, Petitioner could not have reasonably prepaid the XXXXX second quarter sales taxes by XXXXX.
Due to the extraordinary circumstances of this appeal, the Tax Commission, in its discretion, reduces the penalty to $$$$$.
Interest was properly assessed on this account. Petitioner had the use of the money from XXXXX, the date that the Tax Commission would normally have received it, until XXXXX.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that penalty on sales and use tax account No. XXXXX for the second quarter of XXXXX be reduced to $$$$$.
The Commission hereby affirms the assessment of interest on this account.
The Collection Division of the Utah State Tax Commission is ordered to adjust its records in accordance with this decision.
DATED this 7 day of October, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis