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
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.
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.
R. H. Hansen G. Blaine Davis
Joe B. Pacheco Roger O. Tew