BEFORE THE STATE TAX COMMISSION OF UTAH
v. ) INFORMAL DECISION
COLLECTION DIVISION OF THE ) Appeal No. 87-0271
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
STATEMENT OF CASE
An Informal Hearing was held on XXXXX. James E. Harward, Hearing Officer, heard the matter for the Utah State Tax Commission. XXXXX, represented Petitioner. Petitioners request waiver of the penalty and interest assessed against the late filing of their XXXXX individual income tax returns. XXXXX testified that Petitioners were in XXXXX during most of XXXXX, on a mission for their church. Petitioners were granted an extension of time in which to file their XXXXX return and pay their taxes until XXXXX. XXXXX indicated that Petitioners requested an additional extension of time due to their being out of the country. The request for an additional extension of time was apparently not granted and upon Petitioners' arrival in Utah on XXXXX, a return was prepared and the tax due was paid within two weeks.
The Tax Commission is authorized to grant taxpayers an extension of time in which to pay their tax liability. This extension of time may exceed six months when taxpayers are outside the country. Utah Code Ann. 59-14A-68 (1953). When an extension of time for payment of the tax has been granted but the tax is not paid in full prior to the expiration of the extension period, interest will be collected on the unpaid amount for the period between the date of the expiration of the extension period until the date the unpaid amount is paid. Utah Code Ann. 59-14A-87(b) (Supp. 1986). The Commission finds that Petitioners' second request for extension of time in which to pay their XXXXX individual income tax liability should have been granted by Respondent. Tax Commission Rule A12-02-14A:68 indicates that "at the discretion of the tax commission, the request may be denied for any reason, such as outstanding taxes or an unsatisfactory record." Although this rule does not limit the Tax Commission's discretion in denying requests for extension of time for payment of taxes, it does indicate that denial should be for reasons such as outstanding taxes or an unsatisfactory record. Respondent has made no indication whatsoever that Petitioners had less then an unblemished payment record when they denied their request for additional extension of time. Moreover, Utah Code Ann. 59-14A-68 (1953) approves granting an extension exceeding six months when taxpayers are out of the country: "Such extension may exceed six months in the cases of taxpayers who are outside the states of the union and the XXXXX." Id.
DECISION AND ORDER
Based on the foregoing, it is the Decision and Order of the Utah State Tax Commission that Respondent should have granted Petitioners an additional extension of time in which to file their XXXXX individual income tax returns. The additional time should have extended until Petitioners' return to the United States plus a reasonable time (for example, thirty days) in which to prepare their return and pay their taxes. Because Petitioners did file their return and pay their taxes within a short time after their return to the United States, that is, within the time that an extension should have been granted, interest should be waived under Utah Code Ann. 59-14A-87 (Supp. 1986). Therefore, Respondent is ordered to adjust its records to reflect a waiver of all penalty and interest assessed against Petitioners' XXXXX individual income tax filing.
DATED this 2 day of July, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis