BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
: AMENDED
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0316
STATE TAX COMMISSION
OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
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 withholding royalties oil and gas account No. XXXXX for the third
quarter of XXXXX. An Informal Hearing
was held on XXXXX, in the offices of the Utah State Tax Commission. XXXXX, Tax Appeals Supervisor, and David J.
Angerhofer, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner. XXXXX and XXXXX represented the Respondent.
Petitioner
owed a tax of $$$$$ for the third quarter of XXXXX. Petitioner testified that a
check was prepared on XXXXX, for this amount and delivered to XXXXX. Petitioner submitted evidence which
consisted of documentation from XXXXX showing that XXXXX of the Tax Commission
mailroom signed for materials from Petitioner on 11:30 a.m., XXXXX.
On
XXXXX, Petitioner received notice that the third quarter payment for XXXXX had
not been received. Petitioner cancelled
the XXXXX check and sent a new check to the Tax Commission on XXXXX. Respondent's records indicate that the tax
was paid on XXXXX.
Respondent
assessed a penalty in the aggregate of 25% on the tax. The penalty amounted to $$$$$, but was
subsequently reduced by the Commission to $$$$$. Respondent also assessed interest of $$$$$. Petitioner requests a waiver of the $$$$$
penalty and a waiver of the full amount of the interest.
FINDINGS
The
purpose of the penalty is to insure compliance with the law, i.e., that a
taxpayer timely files his taxes.
Petitioner has met the burden of proof to establish that the check in
the amount of taxes for the third quarter of XXXXX was timely filed with the
Tax Commission.
Petitioner's
duty to pay quarterly taxes extends to the duty to insure that the check for
the taxes properly clears his bank.
When thirty-days had passed and the check had not cleared Petitioner's
bank, Petitioner should have taken note that a problem may have existed with
this check. When sixty days had passed
and the check still had not cleared the bank, Petitioner should have known that
a problem definitely existed and should have contacted the Tax Commission to
resolve the matter. Petitioner did
nothing. Over six months later, on
XXXXX, the Tax Commission contacted the Petitioner concerning the payment for
the third quarter of XXXXX. Petitioner
then sent a new check.
In
this case, since Petitioner established that the check was received by the Tax
Commission, the Petitioner is allowed a sixty day grace period without interest
to allow for the fact that Petitioner conceivably may not have known for sixty
days that a problem existed with the check.
However, interest is properly assessed starting on the sixty-first day
since Petitioner had use of the money during this time. Thus, the interest is properly assessed
beginning on XXXXX.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that penalty is
reduced to $$$$$ on Account No. XXXXX.
Interest
is properly assessed on this account beginning on XXXXX.
The
Collection Division of the Utah State Tax Commission is ordered to adjust its
records in accordance with this decision.
DATED
this 12 day of November of 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