BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, : INFORMAL DECISION
v. :
COLLECTION
DIVISION OF THE : Appeal No. 87-0133
STATE TAX
COMMISSION OF UTAH, ) Account No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
is an appeal to the Utah State Tax Commission from a decision from the
Collection Division of the Utah State Tax Commission (Respondent) to assess a
penalty against Petitioner in the amount of the total of the withholding taxes
assessed against XXXXX for the XXXXX and 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 Tax Commission. XXXXX represent himself. XXXXX represented the Respondent. Petitioner stated that there was no dispute
as to the amount owed by XXXXX. Petitioner
stated that the company was started in XXXXX and that it finished in
XXXXX. Petitioner operated a haul route
but incurred additional cost when XXXXX imposed new ordinances. Petitioner
attempted to hire help to solve the problem.
XXXXX took over control of the company in XXXXX and supplied funds for
the creditors. Petitioner stated that
XXXXX had full control of every aspect of the company. XXXXX advanced money to Petitioner so
Petitioner could pay the bills.
Petitioner is currently in litigation with XXXXX and the state of
Utah. Respondent stated that Petitioner
supervised employees, signed returns and checks, and was the president of the
company. Petitioner made decisions as
to who would get paid. Respondent
stated that XXXXX did not tie up all the money and that Petitioner preferred
other creditors over the Tax Commission.
FINDINGS
The
Tax Commission finds that Petitioner was a "responsible person" for
the periods in question pursuant to Utah Code Ann.59-2-1321 (XXXXX) (formerly
59-10-22). As president of the company
and as one who signed the returns and checks, Petitioner was a person
"required to collect, truthfully account for and pay over the sales, use,
or withholding tax imposed by law . . . ." Section 59-2-1321(3). Although XXXXX may have exercised some
control over XXXXX insufficient evidence has been presented which would
establish that Petitioner was relieved of all control by XXXXX. The Tax Commission finds that the Petitioner
preferred other creditors over the state government. Regardless of the amount of control exercised by XXXXX,
Petitioner had an independent source of income from a job in XXXXX, Utah (XXXXX
job) and used this money to pay bills. Petitioner admitted that he paid other
creditors to keep the business open. A
finding that a taxpayer preferred other creditors over state government is
sufficient to satisfy the second requirement of Section 59-2-1321, i.e., that a
taxpayer has willfully failed to collect, truthfully account for and pay over
the sales, use, or withholding tax imposed by law. Since Petitioner is "a responsible person" and since he
willfully failed to collect, truthfully account for and pay over the
withholding tax imposed by law, the Tax Commission finds Petitioner liable for
a penalty as an individual in the amount of the total of the withholding taxes
assessed against XXXXX.
DECISION AND ORDER
Based
upon the foregoing, the Utah State Tax Commission hereby denies Petitioner's
request for waiver of the penalty. The
assessment of a penalty against the Petitioner as an individual in the amount
of the total of the withholding tax assessed XXXXX by the Collection Division
of the Utah State Tax Commission is hereby affirmed.
DATED
this 2 day of February, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco Blaine
Davis
Commissioner Commissioner