87-0131 - Sales





            Petitioner,                                                         :           INFORMAL DECISION

v.                                                                                 :

COLLECTION DIVISION OF THE                          :

STATE TAX COMMISSION OF UTAH,                  )

            Respondent.                                                     :           Appeal No. 87-0131

                                                                                    :           Account No. XXXXX



            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 a penalty against Petitioner in the amount of the total of the sales taxes assessed against XXXXX. for the XXXXX and the XXXXX.  A telephone conference 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, Attorney, and XXXXX represented the Petitioner.  XXXXX and XXXXX represented the Respondent.  Petitioner stated that his duties included the filing of sales tax returns; for the XXXXX, the XXXXX, and part of the XXXXX, he was the financial vice president of XXXXX.  Returns for the XXXXX were signed by Petitioner but returns for the XXXXX were signed by XXXXX.  One prepayment of $$$$$ had been made for the XXXXX, but there was no further payment. Petitioner stated that XXXXX, a vice president of XXXXX, oversaw the accounts payable and that Petitioner had no ability to pay the tax without the participation of others.  There was no conscious decision on the part of Petitioner to divert the funds from the payment of tax.  There was no cash in the bank with which to pay the tax.  Petitioner had no personal control over the fact that there was no cash.  Respondent stated that Petitioner had the ability and was directed to pay the sales tax and was provided with the signed checks with which to do so.  Respondent stated that Petitioner did not inform XXXXX that sales taxes had not been paid.


            The Tax Commission finds that for the XXXXX and the XXXXX, Petitioner was a "responsible person" who was "required to collect, truthfully account for, and pay over the sales, use, or withholding tax imposed by law . . ." pursuant to Utah Code Ann.59-2-1321(3) (1953) (formerly Section 59-10-22(3)).  Petitioner was not a "responsible person" for the XXXXX.  Petitioner resigned on XXXXX, over a month before the sales and use tax return was due for the XXXXX.  Respondent presented two letters from XXXXX, vice president of XXXXX.  One letter was XXXXX, and the second letter was XXXXX.  Respondent also filed an affidavit of XXXXX dated XXXXX.  These materials contained statements against Petitioner's interest, but XXXXX was not present at the hearing to be cross examined by Petitioner. The Tax Commission finds that insufficient evidence has been presented to establish that Petitioner willfully evaded or defeated the collection and payment of the sales tax for the periods in question.


            Based on the foregoing, it is the Decision and Order of the Utah State Tax Commission to abate the personal penalty assessment against Petitioner in the amount of the total of the sales taxes assessed against XXXXX. for the XXXXX, and the XXXXX in the amount of $$$$$.  The Collection of the Utah State Tax Commission is hereby ordered to adjust its records in accordance with this

            DATED this 21 day of December, 1987.


R. H. Hansen                                                                G. Blaine Davis

Chairman                                                                      Commission

Joe B. Pacheco                                                            Roger O. Tew

Commissioner   Commissioner