86-0503
Signed 1/15/87
BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0503
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
:
Respondent. )
_____________________________________
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 interest on individual income tax account No.
XXXXX for the tax years XXXXX and 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.
In XXXXX, Petitioner elected to carry
back a federal investment tax credit (ITC).
Federal taxes were decreased for the tax years XXXXX, XXXXX, and
XXXXX. Petitioner's Utah individual
income taxes correspondingly increased by $$$$$ for XXXXX, $$$$$ for XXXXX, and
$$$$$ for XXXXX. Petitioner filed
amended state income tax returns for the three years on XXXXX, the same day
that Petitioner filed federal form 1045 (application for tentative refund) in
which Petitioner carried back the ITC.
Petitioner paid the additional taxes for XXXXX and XXXXX when the
amended returns were filed.
On XXXXX, Respondent assessed interest
of $$$$$ for the tax year XXXXX, and $$$$$ for the tax year XXXXX. Petitioner stated that the amended return
was filed timely since it was not due until he made the election to carry back
the ITC.
FINDINGS
Petitioner's amended return was filed
timely since a correct original return had been filed. There was no duty to file an amended return
until Petitioner elected to carry back the ITC. Petitioner promptly filed the amended tax return as soon as the
election was made. Therefore, no
interest is due on this account.
Interest is properly assessed if
"any amount of income tax is not paid on or before the last date
prescribed in this [Individual Income Tax] act for payment." Utah Code Ann. ' 59‑14A‑87(a) (1953). On XXXXX, and XXXXX, Petitioner had fully
paid all income tax due and owing at that time for the tax years XXXXX and
XXXXX. Therefore, there was no amount
remaining on which interest could be assessed.
The instructions for filing form TC‑40X
(Utah Amended Individual Income Tax Return) state that for line 19 (Interest on
additional tax):
The interest on tax due is 1 percent
per month or fraction thereof from the due date of the return until paid.
The purpose of
line 19 is to assess interest pursuant to Section 59‑14A‑87 on
income tax due and owing as of the statutory due date because a correct
original return including payment was not filed.
Interest would normally be assessed
when an amended return is filed and additional tax is due because, for whatever
reason, a correct original return was not filed. However, in the case of an ITC carryback, a correct original
return was filed. When a taxpayer later
elects to amend the return, not to correct it, but to adjust for the ITC
carryback, interest is properly assessed from the due date of the amended
return if the taxpayer does not include full payment with the amended
return. If full payment is made, no
interest is assessed.
If the intent of the instructions for
line 19 were to always assess interest from the due date of the original
return, then the words "original return" would have been used instead
of just the word "return."
The use of the word "return" allows for flexibility in the
case of ITC carrybacks.
DECISION AND
ORDER
It is the Decision and Order of the
Utah State Tax Commission that Petitioner's request for waiver of interest on
individual income tax account No. XXXXX for the tax years XXXXX and XXXXX be
granted.
Interest is always assessed from the
due date of the original return if an incorrect original return was filed. In the case of ITC carrybacks, where a
correct original return has been filed, interest is assessed from the filing
date of the amended return.
The Collection Division of the Utah
State Tax Commission is hereby ordered to adjust its records in accordance with
this decision.
DATED this 15 day of January, 1987.
BY ORDER OF THE
STATE TAX COMMISSION OF UTAH.
ABSENT
R.H. Hansen Roger O. Tew
Chairman Commissioner
Joe B. Pacheco G. Blaine Davis
Commissioner Commissioner
NOTICE: You
have 30 days after the date on the Mailing Certificate to request a Formal
Hearing.
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