BEFORE THE STATE TAX COMMISSION OF UTAH
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
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
Joe B. Pacheco G. Blaine Davis