BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, )
v. ) INFORMAL DECISION
COLLECTION
DIVISION OF THE ) Appeal No. 87-0215
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 of the Collection
Division of the Utah State Tax Commission (Respondent) to assess a penalty
against Petitioner as an individual, in the amount of the total of the sales
taxes assessed against 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, attorney at law, and XXXXX represented the
Petitioner. XXXXX, Tax Agent, and
XXXXX, represented the Respondent.
Petitioner stated that all sales tax returns were either filed timely or
at least by XXXXX. The statute of
limitations has run and Respondent may not assess a penalty against the
Petitioner in the amount of the sales tax owed by XXXXX. Respondent had three years in which to
assess the penalty but failed to do so.
Petitioner also stated that the definition of person in Utah Code Ann.
§59-10-22(5) (1953) was changed and renumbered to subsection (4) effective
XXXXX. Petitioner did not qualify as a
person subject to the personal penalty assessment prior to May 10, 1983. Petitioner also stated that he was not a
"responsible person" nor was there a "willful" violation of
a known duty to insure that the taxes were paid.
Respondent
stated that all final decisions were made by Petitioner, and that Petitioner
was a responsible party. Petitioner did
know that taxes had not been paid, and if he did not know, then he exhibited
willful disregard of the matter.
Respondent stated that §59-10-22 does not have a statute of limitations
and that Respondent has proceeded in a timely manner.
FINDINGS
In
the event the sales tax deficiency where a return has been filed and there is
no fraud, "the amount of taxes imposed by this [sales tax] chapter shall
be assessed within Appeal No. 87-0215 three years after the return was filed
and if not so assessed no proceeding for the collection of the taxes shall be
begun after the expiration of the period." Utah Code Ann. §59-15-8 (1953). Section 59-10-22(3) does not
specify a statute of limitations for the assessment of a penalty in the amount
of the tax delinquency. Therefore, the
three year statute of limitations has set forth in Section 59-15-8 shall apply
since the personal penalty assessment is based on the sales tax
delinquency. The imposition of the same
three year statute of limitations on Respondent in which to assess a deficiency
against any taxpayer pursuant to Section 59-15-8, and to assess a personal
penalty against a person required to collect, truthfully account for and pay
over the sales tax does not leave Respondent a great deal of time in which to
accomplish both duties, and a need for prompt action on the part of Respondent
is recognized in Section 59-10-22(5): The penalty provided for in Subsection
(3), is assessed as follows: a. If the tax commission determines in accordance
with Subsection (3), that a person is liable for the penalty, the tax
commission shall immediately assess the penalty and make immediate notice and
demand for payment. (Emphasis added.)
The tax periods in question are XXXXX, and XXXXX. Tax for the XXXXX was required to be filed by XXXXX. Petitioner indicated that Respondent did not
dispute Appeal No. 87-0215 that the return was filed by XXXXX. Since the return was not filed by the
statutory due date, the date on which the return was actually filed (XXXXX)
starts the running of the statute of limitations. The statute of limitations had run by XXXXX. The penalty assessment against Petitioner
was dated XXXXX. This was beyond the
statute of limitations.
DECISION AND ORDER
Based
on the foregoing, it is the Decision and Order of the Utah State Tax Commission
that Petitioner is not liable for a penalty in the amount of the total of the
sales taxes assessed against XXXXX. The
Collection Division of the Utah State Tax Commission is hereby ordered to
adjust its records in accordance with this decision.
DATED
this 29 day of December, 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