BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX :
)
:
Petitioner, )
: FINDINGS
OF FACT,
v. ) CONCLUSIONS OF LAW,
: AND FINAL
DECISION
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0315
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
is an appeal to Formal hearing following an Informal decision rendered by the
Utah State Tax Commission on XXXXX, which decision affirmed a penalty based on
actual sales and associated interest on sales and use tax account No. XXXXX for
XXXXX. A Formal hearing was held on
XXXXX in the offices of the Utah State Tax Commission. Commissioners Roger O.
Tew and Joe B. Pacheco and Hearing Officer David J. Angerhofer heard the matter
for the Utah State Tax Commission.
XXXXX, attorney at law, and XXXXX, CPA, represented the Petitioner. The Respondent was not represented.
The
Informal decision rendered on XXXXX concerned a failure to prepay sales and use
taxes for the second quarter of XXXXX.
Petitioner subsequently failed to make a prepayment of the sales and use
taxes for the second quarter of XXXXX.
At the Formal hearing, Petitioner requested that the Commission
consolidate the appeals for XXXXX and XXXXX into one hearing. The motion was
granted. This decision shall apply to both XXXXX and XXXXX.
FINDINGS OF FACT
Utah Code Ann.
§59-12-108(1) (1953) (old section 59-15-5.1(1)) states that:
[a]ny
person whose tax liability under this part and Part 2, was (a) $96,000 for the
previous year, (b) $24,000 for the previous quarter, (c) whose estimated tax
liability is $8,000 or more per month, as determined by the commission, shall
prepay not less than 90% of the amount of state and local tax liability for
April and May of each year. The
commission shall establish by rule the procedures and guidelines in determining
the tax liability under this section. Petitioner was required to prepay at
least 90% of the sales tax liability for XXXXX and XXXXX. Petitioner did not make a prepayment for
either XXXXX or XXXXX. Petitioner had
made a prepayment for XXXXX after receiving a blank return from the Tax
Commission. Petitioner's sales tax
compliance clerk who filed the XXXXX prepayment retired on or about XXXXX.
For
the XXXXX and XXXXX calendar years Petitioner had a form-driven tickler system
with respect to the filing of sales tax returns. Petitioner assigned a new sales tax compliance clerk on or about
XXXXX. This clerk has held the position
continuously since then, but took maternity leave between XXXXX and XXXXX. The clerk had never filed a prepayment and
went on maternity leave before the accelerated return form was received for
XXXXX. Prior to going on maternity
leave, the clerk instructed her replacement as to which returns needed to be
filed during her absence as well as other duties which the replacement clerk
was required to perform. The
replacement clerk was unaware of the need to file the XXXXX accelerated payment
because this was not one of the instructions.
For XXXXX the
prepayment return was apparently not received by the Petitioner. The Tax Commission mailed Petitioner a
letter, dated XXXXX, stating that:
[a] review of the Tax Commission's Master Mailing List indicates that
you may not have received your blank April-May Accelerated Sales Tax
return. If you have filed the
Accelerated Sales Tax return, please disregard this request. If you have not filed the accelerated sales
tax return, please do so within 10 days of this mailing.
To
avoid penalties or interest being applied for a late filing, use the special
encoded envelope provided.
Exhibit 8.
Petitioner stated that this letter was received on XXXXX and that
payment was made to the Tax Commission on the very same day.
CONCLUSIONS OF LAW
For
the tax year XXXXX, Respondent properly assessed penalty and interest pursuant
to Utah Code Ann. §59-12-108(3) (1953).
No evidence has been received which would indicate that the Utah
Accelerated Return Form for XXXXX was not received by Petitioner prior to the
filing deadline. The Petitioner
indicates that the accelerated return form was received by the replacement
sales tax compliance clerk subsequent to the regular clerk going on maternity
leave on XXXXX. Because the form was
not on hand until after the start of her maternity leave, the sales tax clerk
did not set up the regular schedule for payment, and since the payment was not
set up on the schedule of returns the replacement clerk was unaware the payment
was due. See Exhibit 6 at 5. Petitioner was negligent in failing to
adequately instruct the replacement clerk as to the prepayment procedures and
was negligent in failing to file the Utah Accelerated Return Form when it was
received.
Petitioner
has met the burden of proof to establish that an Accelerated Sales Tax return
was not received for XXXXX. Petitioner has
complied with the conditions set forth and the letter of XXXXX (Exhibit 8) and
is not subject to penalties or interest for the tax year XXXXX.
FINAL DECISION
Based
on the foregoing, the Utah State Tax Commission hereby decides:
1. Penalty and interest were properly assessed
on sales and use tax account No. XXXXX for failure to prepay sales and use
taxes for XXXXX and the order of the informal decision is hereby affirmed.
2. Penalty and interest were improperly
assessed for failure to prepay sales and use taxes for XXXXX and are hereby
abated.
The
Collection Division of the Utah State Tax Commission is ordered to adjust its
records in accordance with this decision.
DATED
this 30 day of November, 1987.
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