BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
) INFORMAL
DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0423
UTAH STATE TAX
COMMISSION, ) Account No. XXXXX
:
Respondent, )
_____________________________________
STATEMENT OF CASE
This
is an appeal to the Utah State Tax Commission from a withholding tax audit
report prepared by the Audit Division of the Utah State Tax Commission
(Respondent) on the withholding tax account of XXXXX (Petitioner). Petitioner waived its right to an oral
hearing. Therefore, the Tax Commission
decides this matter based on the pleadings before it.
Respondent
computed an additional tax of $$$$$, a penalty of $$$$$, and interest of $$$$$
for a total amount due of $$$$$ for the period from XXXXX, to XXXXX. Respondent determined this audit deficiency
because Petitioner had a Utah based employee and withheld Federal taxes on the
employee but did not withhold or remit Utah employees' taxes in accordance with
Utah Code Ann. § 59-14A-40(a)(1953).
Respondent assessed a penalty in accordance with Section 59-14A-89(a).
Petitioner
asserted that the employee is a salesman, that Petitioner considers salesmen
employees of Tennessee, and that Petitioner accordingly paid employees' payroll
taxes to Tennessee. Petitioner further
stated that the employee claimed exempt status on form W-4, Employees'
Withholding Allowance Certificate. The
IRS instructed the Petitioner to withhold taxes but no notification was
received from Utah regarding the state taxes.
Therefore, Petitioner should not be liable. Petitioner requests that all penalty and interest, totaling
$$$$$, be waived and that Utah state withholding for XXXXX through XXXXX and
one half of XXXXX, totaling $$$$$, be removed.
FINDING OF FACTS
Petitioner
has erroneously considered that all its employees are Tennessee based
employees. Petitioner is an employer
and the employee in question is an employee for the purposes of the Utah
Individual Income Tax Act of XXXXX.
Utah Code Ann. § 59-14A-39.
Petitioner was required to deduct and withhold taxes from the employee
for the tax period in question. Section
59-14A-40(a).
The
Tax Commission was not required to notify Petitioner of the withholding
requirement. It was the Petitioner's
responsibility to learn of and comply with the tax filing requirements of the
state of Utah.
Respondent
properly assessed penalty and interest on remit Utah employees' taxes in
accordance with Utah Code Ann. § 59-14A-40(a)(1953) Respondent assessed a
penalty in accordance with Section 59-14A-89(a).
Petitioner
asserted that the employee is a salesman, that Petitioner considers salesmen
employees of Tennessee, and that Petitioner accordingly paid employees' payroll
taxes to Tennessee. Petitioner further
stated that the employee claimed exempt status on form W-4, Employees'
Withholding Allowance Certificate. The
IRS instructed the Petitioner to withhold taxes but no notification was
received from Utah regarding the state taxes.
Therefore, Petitioner should not be liable. Petitioner requests that all penalty and interest, totaling
$$$$$, be waived and that Utah state withholding for XXXXX through XXXXX and
one half of XXXXX, totaling $$$$$, be removed.
FINDING OF FACTS
Petitioner
has erroneously considered that all its employees are Tennessee based
employees. Petitioner is an employer
and the employee in question is an employee for the purposes of the Utah
Individual Income Tax Act of XXXXX.
Utah Code Ann. § 59-14A-39.
Petitioner was required to deduct and withhold taxes from the employee
for the tax period in question. Section
59-14A-40(a).
The
Tax Commission was not required to notify Petitioner of the withholding requirement. It was the Petitioner's responsibility to
learn of and comply with the tax filing requirements of the state of Utah.
Respondent
properly assessed penalty and interest on Petitioner's withholding tax account
for the tax periods in question. Petitioner
did not meet its burden of proof to show that the failure to deduct and
withhold taxes from the employee's wages was due to reasonable cause and not
due to willful neglect. Therefore, the
25 percent aggregate penalty of Section 59-14A-89(a) is applicable.
DECISION AND ORDER
It
is the decision and order of the Utah State Tax Commission that the request for
waiver of tax, penalty, and interest on withholding tax account No. XXXXX for
the period XXXXX, through XXXXX, be denied.
The
withholding tax audit report of the Audit Division of the Utah State Tax
Commission is affirmed.
DATED
this 7 day of October, 1986.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
ABSENT
Joe B.
Pacheco G.
Blaine Davis *
Commissioner Commissioner