BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX, )
:
Petitioner, )
:
v. ) INFORMAL DECISION
:
)
COLLECTION
DIVISION OF THE : Appeal No. 86 0617
STATE TAX
COMMISSION OF UTAH, ) and 86 0351
: Acct. No.
XXXXX
) and 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 penalty and
interest on oil and gas occupation tax account No. XXXXX for the XXXXX annual
occupation tax return and for the XXXXX first and second quarter occupation tax
returns. This is also an appeal from a
decision of Respondent to assess penalty and interest on withholding royalties
oil and gas tax account No. XXXXX. The
circumstances giving rise to the late payment of both types of taxes are the
same so both appeals will be addressed in one decision.
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 and XXXXX represented the Petitioner. XXXXX and XXXXX represented the Respondent.
XXXXX
purchased 55% of XXXXX in XXXXX. In
XXXXX, XXXXX assumed operation of both the XXXXX and XXXXX fields which XXXXX
had previously operated. Petitioner
stated that revenues were not paid to XXXXX until XXXXX. Petitioner assumed
that since revenues were being sent to XXXXX prior to XXXXX, that XXXXX was
handling the taxes. During this time
XXXXX was moving its office to Canada and communications between XXXXX and
XXXXX were less than ideal.
Petitioner
stated that it received the first notice of delinquent taxes ten months after
it assumed operation of the XXXXX and XXXXX fields. Petitioner immediately took
steps to remedy the problem and has been very cooperative.
FINDINGS
Petitioner
is liable for the taxes since Petitioner assumed operation of both the XXXXX
and XXXXX fields in XXXXX. Petitioner was
negligent in assuming that because XXXXX continued to receive revenues, XXXXX
would still pay the taxes. Although
there may have been confusion and delays in the transfer of information from
XXXXX to XXXXX this is not an
unforeseeable event when one company takes over operation from another. Petitioner should have made arrangements
with XXXXX concerning the responsibility for payment of taxes in order to avoid
the mix-up that occurred.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that Petitioner's
request for waiver of penalty on oil and gas occupation tax account No. XXXXX
and withholding royalties oil and gas tax account No. XXXXX be denied.
The
assessment of penalty and interest by the Collection Division of the Utah State
Tax Commission is hereby affirmed.
DATED
this 12 day of November, 1986.
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