BEFORE THE STATE TAX COMMISSION
OF UTAH
_____________________________________
XXXXX
Petitioners, : INFORMAL DECISION
v. :
COLLECTION
DIVISION OF THE : Appeal No. 87-0309
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
An
Informal Hearing was held on XXXXX.
Accountant XXXXX represented Petitioners. James E. Harward, Hearing Officer, heard the matter for the Utah
State Tax Commission. As of XXXXX,
Petitioners owed $$$$$ in tax, penalty, and interest for the tax years XXXXX.
XXXXX testified that XXXXX came to his office in XXXXX, to request assistance
in resolving Petitioners' income tax problem.
XXXXX learned that in XXXXX, XXXXX left employment with the XXXXX Sheriff's
Department in XXXXX to enter a business venture for which he personally
borrowed heavily and secured corporate loans with his home. Within six months it was discovered that one
of his associates had embezzled significant amounts of money, and over the next
three years the XXXXX lost their home and all the assets they had transferred
to the business. XXXXX had become
deeply involved with the legal affairs of the business and with the added
confusion of not knowing how to handle the complicated corporate transactions
for tax purposes he fell into the routine of not filing income tax
returns. He and XXXXX were employed and
taxes were being withheld from their checks.
The XXXXX felt that they were covered as far as any liabilities that
they might have. After the XXXXX moved
to Utah they both began to have severe health problems, their home was
burglarized and many of their records were stolen. At this time the XXXXX are living with a disabled person and are
assisting her in order to take care of her and to provide themselves with a
place to live. For the tax years XXXXX,
the XXXXX jointly had enough money withheld from their paychecks that they were
owed substantial refunds in each of those years. However, in XXXXX, the XXXXX owed amounts to the State. Utah law has a three year statute of
limitations for applying for refunds.
Therefore, Petitioners are not entitled to the refund amounts they were
owed for the XXXXX tax years because the statutes of limitation have expired. The following is a list of the refund
amounts Petitioners would have been entitled to for the tax years XXXXX:
XXXXX $$$$$ refund
XXXXX $$$$$ refund
XXXXX $$$$$ refund
XXXXX $$$$$ refund
The
following are the amounts Petitioners owe for the tax years XXXXX:
Year Tax Penalty Interest Total
XXXXX $$$$$ $$$$$ $$$$$ $$$$$
(as of XXXXX)
XXXXX $$$$$ $$$$$ $$$$$ $$$$$
(as of XXXXX)
The
total amount as of XXXXX that Petitioners owe for the XXXXX tax years is
$$$$$. The total amount of refund that Petitioners
would have been entitled to for the tax years XXXXX is $$$$$. The refund amounts would more than amply
cover the amounts due for XXXXX as of XXXXX.
Therefore, Petitioners request the Commission to allow the refunds
applied for and to apply the refunds to the amounts due for XXXXX.
DECISION AND ORDER
Based
on the foregoing, it is the Decision and Order of the Utah State Tax Commission
to allow the refunds applied only to the extent of the XXXXX liability as of
XXXXX. The Commission takes this action
not because the Petitioners' non-filing of tax returns is excusable, but
because it is perhaps understandable under the circumstances and because the
state is not actually deprived of money since it never refunded any amounts to
the Petitioners for the tax years XXXXX.
Respondent is ordered to apply the refund amounts to the XXXXX tax
liability of Petitioners, but if there is any refund amount over Petitioners'
liability as of XXXXX, Respondent is ordered not to pay that amount to
Petitioners because the statute of limitations has passed and Petitioners are
not entitled to that amount of money.
DATED
this 7 day of August, 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