87-0037 - Income

 

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX

            Petitioner,                                                         :           INFORMAL DECISION

v.                                                                                 :

COLLECTION DIVISION OF THE                          :           Appeal No. 87-0037

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 penalty and interest on individual income tax account No. XXXXX for 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.  Petitioner presented evidence that he timely filed applications for automatic extensions of time to file both U.S. and Utah individual income tax returns.  Petitioner requests a waiver of the penalty and interest.

FINDINGS

            Petitioner properly filed an extension request pursuant to Utah Code Ann. 59-14A-62 (1953).  The extension allowed Petitioner six additional months in which to file the return for XXXXX.  On XXXXX, Petitioner paid the remainder of the tax due of $$$$$ but did not pay the associated interest.  Respondent properly assessed interest on Petitioner's account pursuant to  59-14A-87.  The Tax Commission was denied the use of the money during the extension period.  No penalty was initially assessed and would not have been assessed had Petitioner paid the entire balance due within the six month period.  However, since Petitioner did not pay the associated interest, Respondent properly assessed a penalty.  Payments to the Tax Commission are applied first to penalty, then to interest, then to tax.  Since Petitioner did not pay the total balance, the interest was credited first, leaving a portion of the tax past due upon the expiration of the six month extension.  Thereupon, a penalty was properly assessed.

DECISION AND ORDER

            It is the Decision and Order of the Utah State Tax Commission that Petitioner's request for waiver of penalty and interest on individual income tax account No. XXXXX for XXXXX be denied.  The assessment of penalty and interest by the Collection Division of the Utah State Tax Commission is hereby affirmed.

            DATED this 5 day of October , 1987.

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