BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 0398
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 corporation franchise account No. XXXXX for the calendar year XXXXX. An Informal Hearing was held on XXXXX, in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner.
Petitioner stated that XXXXX is a family corporation which was set up to care for a sixty-five year old retarded sister in the family. The only income is interest which amounts to approximately $$$$$ per year. Petitioner admitted that the return was filed late but requests a waiver of the penalty for the following reasons:
1. Both the president and vice president of the corporation are on extended overseas assignments. The delay in correspondence was a contributing factor to the late filing.
2. With a net income of only $$$$$, the minimum tax alone amounted to 25% of the income. The combination of federal and state taxes and penalties approaches 54% of net income.
Petitioner submitted documentation showing that the Internal Revenue Service waived the penalty on Petitioner's federal taxes. Petitioner requests a waiver of the penalty and interest.
Respondent assessed a penalty of $$$$$ and interest of $$$$$ on a tax of $$$$$.
Petitioner stated that when the president and vice president left on extended assignments, they put XXXXX, a Certified Public Accountant, in charge of taxes. Petitioner should have foreseen the potential delays in the filing of taxes when the president and vice president accepted overseas assignments, and should have taken steps to avoid problems. One alternative would have been to file for an extension of time for filing a return. Petitioner failed to file for an extension.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that Petitioner's request for waiver of penalty and interest on corporate franchise tax account No. XXXXX for the calendar 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 12 day of November, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis