BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 86 1553
UTAH STATE TAX COMMISSION, : Account No. XXXXX
STATEMENT OF CASE
This matter came before the Utah State Tax Commission on the XXXXX day of XXXXX, XXXXX, for an Informal Hearing. James E. Harward, Hearing Officer, heard the matter for and on behalf of the Tax Commission. XXXXX and XXXXX appeared representing the Petitioners. XXXXX and XXXXX appeared representing the Respondent.
XXXXX and XXXXX were president and secretary of the Petitioner. The Petitioner suffered severe financial difficulties in XXXXX and subsequently went out of business. In approximately XXXXX it was determined that the corporation was defunct and that a personal penalty assessment should be made against the individual XXXXX and XXXXX for the amount of tax or $$$$$. Thereafter, a personal penalty assessment was made and a Petition taken therefrom.
The Petitioners argued that the statute of limitations bars the assessment of the penalty and further that even if the statute of limitations does not bar it the Petitioners did not willfully fail to pay the withholding tax.
Where no statute of limitations is provided for in the personal penalty assessment provisions, Utah Code Ann. §59-14A-86A is controlling. That section provides for a three year statute of limitations on the assessment of tax. The personal penalty assessment provisions 59-10-22 must therefore be enacted within three years from the filing date of the XXXXX income tax returns i.e. XXXXX. Therefore the personal penalty assessment should have been made prior to XXXXX. The respondent is barred from assessing the tax due to the statute of limitations.
The Commission finds however that if the assessment were not barred by the statute of limitations it would have been properly done against XXXXX who was in control of the money, signed checks, and made the determination of which bills to pay and which bills not to pay.
DECISION AND ORDER
Based upon the foregoing it is the decision of the Utah State Tax Commission that the personal penalty assessment against XXXXX and XXXXX on behalf of XXXXX, is barred by the statute of limitations. The Respondent is hereby ordered to adjust its records to reflect this decision.
DATED this 11 day of March, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew