BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX ) FINDINGS OF FACT,
Petitioner, : CONCLUSIONS OF LAW AND
v. : FINAL DECISION
COLLECTION
DIVISION OF THE : Appeal No. 87-0028
UTAH STATE TAX COMMISSION, : Acct.
No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
is an appeal to a formal hearing from an informal decision rendered by the Utah
State Tax Commission on XXXXX, which decision affirmed the assessment of penalty
and interest on sales and use tax acct.
No. XXXXX for XXXXX. A formal
hearing was held on XXXXX in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard
the matter for the Tax Commission.
XXXXX, Controller, represented the Petitioner. Petitioner prepared two checks on XXXXX. One was made out to the State Tax Commission
of Utah in the amount of $$$$$, and the other was made out to the Internal
Revenue Service in the amount of $$$$$.
Petitioner mailed the Tax Commission check to the IRS and mailed the IRS
check to the Tax Commission. Petitioner
stated that each agency cashed the other agency's check, and Petitioner
received no notification of the problem until seven months later. Both checks had cleared the bank, and
Petitioner had no reason to suspect any problem existed. Petitioner stated that he was not
negligent. Petitioner had written his
phone number on the return. The Tax Commission was in a position to call
Petitioner and remedy the situation had the Tax Commission noticed the
incorrect check. Petitioner requested a
waiver of penalty and interest.
FINDINGS OF FACT
Respondent
assessed a 10% negligence penalty on this account because of a deficiency
resulting from the fact that the wrong check was mailed to the Tax
Commission. Although the Tax Commission
had cashed the check, the check was for a lesser amount than the tax
liability. Respondent also assessed
interest on the account for the period of delinquency.
CONCLUSIONS OF LAW
Respondent
properly assessed a 10% negligence penalty and associated interest on the
account pursuant to Utah Code Ann. 59-15-8 (1953). However, the Tax Commission, in its discretion, hereby waives the
penalty on the basis that Petitioner has established there was no intent to
evade or to delay payment, and that Petitioner had sufficient funds at the time
the checks were prepared. Petitioner made a good faith effort to comply with
the law and remedied the situation as soon as he learned of the error. The Tax Commission finds no basis on which
to waive the interest. The Tax
Commission was denied the use of the money during the period in question.
FINAL DECISION
Based
on the foregoing, it is the decision and order of the Utah State Tax Commission
that penalty on sales and use tax acct. No. XXXXX for XXXXX be waived. Interest shall remain as assessed. The Collection Division of the Utah State
Tax Commission is hereby ordered to adjust its records in accordance with this
decision.
DATED
this 3 day of August , 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
ABSENT
R. H. Hansen G.
Blaine Davis
Chairman Commissioner
Joe B.
Pacheco Roger
O. Tew
Commissioner Commissioner