BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner, : FINDINGS OF FACT,
v.
CONCLUSIONS
OF LAW
vi.
) AND FINAL DECISION
AUDIT DIVISION
OF THE :
STATE TAX
COMMISSION OF UTAH, ) Appeal No. 87-0941
Respondent. :
_____________________________________
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. James E. Harward, Presiding Officer
and Jerry Larrabee, Hearing Officer, heard the matter for and in behalf of the
Tax Commission. Petitioner was
represented by XXXXX. The Respondent
was represented by XXXXX. Based upon
the recommendation of the Hearing Officers and the facts and evidence presented
at the hearing, the Tax Commission makes its
FINDINGS OF FACTS
1.
The taxes in question are XXXXX.
2.
The tax in question is individual income tax.
3.
Petitioner was contacted on or about the XXXXX and requested to file the
necessary returns.
4.
From the first contact numerous deadlines and extension were granted to the
Petitioner for the purposes of filing the returns. Eventually writ of mandate proceedings were commenced against the
Petitioner. Several Orders to Show
Cause were issued. Returns were finally
obtained from the Petitioner in XXXXX twenty one months after the original
contact by the Respondent.
5.
Petitioner cited the herculean effort to obtain and review records necessary
for the compilation of the returns, the hiring and attempted review by several
bookkeepers, and finally the confusion created by the language and the
instruction booklets, tax forms, and the filing as excuses for nonfiling of the
returns. The Petitioner further cites
that he knew during this period in question that he did not have sufficient
income to file returns. None were
prepared and necessary bookkeeping was not done during the time.
CONCLUSIONS OF LAW
Utah
Code Ann. §59-14A-92 imposes a penalty of not more than $$$$$ for "any
person who, with intent to evade any tax or any requirement of this chapter, or
any lawful requirement of the State Tax Commission, fails to pay the tax or to
make, render, sign, or verify a new return or to supply any information within
the time required by or under this chapter, or . . . , with like intent makes,
renders, signs, verifies any false or fraudulent return or statement, supplies
any false or fraudulent information is liable for a civil penalty of not more
than $$$$$ to be recovered by the Utah State Tax Commission in the same manner
as provided in this chapter for the collection of delinquent taxes. . . ."
FINIAL DECISION
The
Utah State Tax Commission in reviewing the evidence and arguments of the
Petitioner, finds the use of hindsight to be interesting but not
persuading. Petitioner claims that the
tax laws are so confusing that he was unable to have requisite intent to avoid
paying the tax or filing the return because of that confusion. However, the entire argument begs the
question why the Petitioner did not adequately prepare his books in the first
place in order to know what his income was for the years in question. It is clear from the conduct of the
Petitioner that he had no intention of filing returns for the periods in
question. The Petitioner did not even
have proper bookwork available to know what his income and expenses were for
that period of time. The nearly twenty
one months of record reconstruction after the initial contact by the Respondent
would indicate that the Petitioners records were not kept proper. In fact, the implication is clear that the
Petitioner had no intention of filing returns or keeping the proper records to
determine the income for the years in question. The testimony indicates that the Petitioner himself hired several
bookkeepers and ultimately a tax consultant to help him in the endeavor of
reconstructing the years in question and to determine the applicable income for
those years. The Tax Commission is
intrigued by the reference of the Petitioner that he needed to complete all
those years in order to apply appropriate deprecation and to arrive at the
proper numbers for the filing of the XXXXX income tax returns. This would indicate to the Commission that
the Petitioner had no intention whatsoever during this period of time of filing
his returns or preparing and keeping an adequate record of appropriate
information in order to file returns.
Therefore,
it is the conclusion of the Utah State Tax Commission that the Petitioner
intended to avoid filing income tax returns for the tax years in question and
intended not to maintain sufficient information for the purpose of rendering,
signing or making an income tax return for the years in question. Based on this the Utah State Tax Commission
affirms the civil penalty of $$$$$ per year.
It is so ordered.
DATED
this 22 day of March, 1989.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner