BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0389
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 Individual Income Tax Account No. XXXXX for the tax year
XXXXX. XXXXX (Petitioner) appeared for
the Petitioners with their attorney.
James E. Harward, Hearing Officer, heard the matter for the Tax Commission.
Petitioner's
Individual Income Tax Return for the tax year XXXXX was required to be filed
with the Utah State Tax Commission by XXXXX. Petitioner did not file the return
until XXXXX. Respondent assessed a
penalty of $$$$$ and interest of $$$$$ on the delinquent tax of XXXXX.
Petitioner
stated that he obtained an IRS extension for the tax year XXXXX but did not
file for a Utah extension since Petitioner supposed that Utah recognized the
Federal extension as did Arkansas, where Petitioner lived for part of the
year. Petitioner requests a waiver of
penalty and interest since there was no intent to defraud the Tax Commission.
FINDINGS
Respondent
properly assessed a penalty of $$$$$ on the account. A $$$$$ civil penalty is properly imposed on "every person
who, without fraudulent intent, fails to make, render, sign, or verify any
return, or to supply any information within the time required by or under the
provision of this [Individual Income Tax] chapter." Utah Code Ann. § 59-14A-92(a) (1953). A
penalty of 5 percent for each month or any fraction thereof that the return is late,
to a maximum of 25 percent, is properly assessed on the tax required to be
shown on the return. Section
59-14A-89(a). A penalty of 20 percent
was properly assessed since Petitioner paid the tax approximately 3 and 1/2
months late. The tax required to be
shown on the return was $$$$$. $$$$$
was prepaid through W-2 withholding so the balance against which the penalty
was to be applied was $$$$$. Twenty
percent of $$$$$ is $$$$$.
A
payment which is made to the Tax Commission is applied first to penalty then to
interest and then to the tax involved.
When Petitioner paid the $$$$$ on XXXXX, (including the $$$$$
withholding) this was applied first to the penalty of $$$$$ then to interest of
$$$$$ and finally to the tax, leaving a balance due of $$$$$. On XXXXX, an additional 5 percent penalty
was applied against this $$$$$ (reaching the maximum penalty of 25 percent) for
a penalty of $$$$$. Thus the total
penalty consists of a civil penalty of $$$$$, a 20 percent penalty of $$$$$
(assessed against $$$$$), and a 5 percent penalty of $$$$$ (assessed against
$$$$$) for a total of $$$$$.
A
total interest of $$$$$ as of XXXXX, was properly assessed against
Petitioner. Petitioner has had use of
the money since XXXXX, the date the Petitioner was required to remit this money
to the Tax Commission.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that the Petition
for waiver of penalty and interest on individual income tax Account No. XXXXX
for the tax year XXXXX be denied.
The
assessment of penalty and interest by the Collection Division of the Utah State
Tax Commission is hereby affirmed.
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