BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, ) FINDINGS OF FACTS,
: CONCLUSIONS
OF LAW,
v. ) AND FINAL DECISION.
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0400
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a Formal Hearing on
XXXXX. James E. Harward, Hearing
Officer, heard the matter for and in behalf of the Tax Commission. XXXXX appeared representing the Petitioner.
Based
upon the presentation of evidence at the Formal Hearing, the Commission makes
its:
FINDINGS OF FACTS
1. An audit was conducted by the Audit Division
of the Utah State Tax Commission in the fall of XXXXX. As a result of the audit, several
preliminary reports and notices were sent to the Petitioner which resulted in
additional information being supplied from the Petitioner to the Audit Division
of the Utah State Tax Commission. This
additional information related to exemption certificates for various
individuals and other various and sundry information.
2. That a final notice of deficiency was issued
on XXXXX. In that notice of deficiency, no penalty was assessed.
3. On XXXXX, the Petitioner paid the tax plus
the interest as sent out in the audit report plus additional accruing interest.
4. Subsequent to the paying of the tax and
interest, Petitioner received a notice of additional amounts due which were a
result of the assessment of the penalty.
5. Petitioner received a letter which stated
"you may effect a savings in interest charges by paying the tax, penalty
(if applicable) and interest immediately".
On
the statutory notice of deficiency, the Petitioner's letter stated unless you
file a Petition for Redetermination as described above within the required
thirty (30) days, the Statutory Notice of Deficiency will constitute a final
assessment and the Tax Commission will refer this case to the Collection
Division which will bill you for tax deficiency plus the penalties and
interest.
6. Confusion was created by the statutory
Notice of Deficiency letter. Recently
the letter was redrafted to write as follows: "Unless you file a Petition
for Redetermination as described above, then the required thirty days this
statutory Notice of Deficiency will constitute a final assessment. If a Petitioner has not filed or full
payment is not received your case will be referred to the Collection Division
which will bill you for the unpaid tax deficiency plus penalty and updated
interest."
7. The auditors did not assess a penalty in the
audit report nor was the penalty made part of the statutory notice of
deficiency.
CONCLUSIONS OF LAW
The
Tax Commission has the power in its discretion to waive, reduce or compromise
the civil penalties or interest associated with a sales and use tax. Utah Code
Ann. § 59-15-8.
FINAL DECISION AND ORDER
Based
upon the foregoing, it is the Decision and Order of the Utah State Tax
Commission that the penalty in this case be waived. The Commission bases the decision to waive the penalty on the
fact that the statutory notice of deficiency letter is ambiguous and it would
appear that no amount is due until billed by the Collection Division. This has been recognized by the Audit
Division and the statutory notice of deficiency has been changed to reflect
that payment must be received within the thirty days to avoid the assessment of
a penalty or additional collection costs which would include the assessment of
a penalty. In addition, the Petitioner
paid the deficiency within a reasonable time even though it was not within the
thirty days. The payment was received
within sixty days of the final notice of deficiency. Based upon the foregoing, the Commission thereby waives the
assessment of the penalty and directs the Collection Division to adjust its records
to reflect this decision.
DATED
this 5 day of March, 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