BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 0410
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 sales and use tax account No. XXXXX for the fourth quarter of XXXXX, all of XXXXX, and the first three quarters of 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 on XXXXX, he purchased XXXXX and changed the corporate name to XXXXX. At the time of purchase, Petitioner met with XXXXX of the Tax Commission to find out the tax liabilities in order to determine whether Petitioner should buy only the assets or to buy the stock of the corporation.
Petitioner stated that the Tax Commission was able to determine the tax liability for Petitioner but could not give Petitioner figures for interest or penalty at that time and that XXXXX told him that the penalty would be waived under these circumstances.
Petitioner stated that XXXXX has paid off in excess of $$$$$ in delinquent FICA, State Withholding and Utah State Sales Taxes which its predecessor in interest had accumulated. Petitioner paid the interest charges as soon as the Tax Commission determined the amount and notified him. Petitioner requests a waiver of the penalty.
Respondent assessed a total penalty of $$$$$, and associated interest for the tax periods in question.
Petitioner followed the proper procedure by consulting with the Tax Commission before purchasing XXXXX. Petitioner as successor in interest would be liable for all taxes, penalty and interest of XXXXX. Therefore, a determination of the amount of tax, penalty and interest due and owing was a critical factor of the decision of Petitioner to buy the company and not just the assets.
Petitioner has timely filed all taxes ever since Petitioner purchased XXXXX. The Commission finds that Petitioner in good faith acquired the stock and not just the assets of its predecessor in interest, and recognizes that this course of action resulted in the prompt payment of delinquent taxes and associated interest which otherwise would have been more difficult to collect.
The Commission reduces the penalty to $$$$$, but does not waive it entirely since Petitioner should have sought written waiver of penalty instead of merely submitting a check for the interest and assuming that the penalty would be waived, and instead of allowing sixteen months to elapse before further correspondence was exchanged.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that penalty on sales and use tax account No. XXXXX be reduced to $$$$$.
The Collection Division of the Utah State Tax Commission is ordered to adjust its records in accordance with this decision.
DATED this 1 day of December, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis