BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0393
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was held by telephone conference call on XXXXX. James E. Harward, Hearing Officer, heard the matter for the Utah State Tax
Commission. XXXXX, of XXXXX,
represented the Petitioner. Petitioner
testified that XXXXX, a Division of XXXXX, was incorporated on XXXXX. Petitioner had new filing requirements as a
separate entity in Utah, but due to limited business activity in Utah and the
fact that XXXXX sustained losses on the sale of individual parcels of land in
Utah, it did not believe it would have a tax liability in Utah. However, because business income was
apportioned to Utah, a tax liability was owed.
Petitioner
paid the tax due on XXXXX, the date the tax would have been due had an
extension been filed. Petitioner
asserts that pursuant to Utah Code Ann. § 15-13-27 (Supp. 1986), Petitioners
failure to file an extension application was due to reasonable cause, and
therefore, no penalty should be paid.
Petitioner did indicate a willingness to pay the $$$$$ penalty provided
for in Utah Code Ann. § 59-13-56 (Supp. 1986) pertaining to the imposition of a
penalty when there is a failure to make a return within the time required by
law.
FINDINGS
1. Utah Code Ann. § 59-13-27 (Supp. 1986)
provides for a 5% penalty for each month or part of month during which the
taxpayer failed to make and file a return within the time prescribed by law,
not to exceed 25% in the aggregate, except when a return is filed after the
time prescribed by law and the failure to file on time was due to reasonable
cause and not due to willful neglect.
2. Utah Code Ann. § 59-13-56 (Supp. 1986)
provides for a civil penalty of $$$$$ where a person fails to make, render,
sign or verify a return or to supply information within the time required by
law without fraudulent intent.
3. Utah State Tax Commission finds that
Petitioner's failure to file an application for an automatic extension of time
in which to file Petitioner's corporate franchise tax return was due to
negligence and not due to reasonable cause.
Petitioners reasons for late filing would pertain to lack of knowledge
on the part of the Petitioner that it was required under any circumstance to
file a franchise tax return. However,
Petitioner asserts these reasons as an excuse for not filing an application for
an extension. If Petitioner knew it had
a duty to file an application for extension, then it knew it had a duty to file
a lax return. The Commission concedes
that Petitioner's failure to timely file an application for time was due to
inadvertence; however, this inadvertence does not constitute reasonable cause.
DECISION
Based
on the foregoing facts, it is the Decision and Order of the Utah State Tax
Commission that Respondent's assessment of penalty and interest be sustained.
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