BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 87-1112
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
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 penalty and interest on sales and use tax account No. XXXXX for the XXXXX. A telephone conference hearing on XXXXX in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner. Petitioner stated that he made a mistake on the form for the XXXXX. He had initially calculated the correct amount but scratched this out and substituted a lesser figure because of a calculation error. Petitioner stated that there was no intent to defraud and this was an honest mistake. Petitioner stated that he was not aware of the new law assessing a $50 late filing penalty and that this law should not apply to minor addition errors. Petitioner further noted that the amount charged was not in accordance with the law, i.e., it is apparent that the smaller the error the greater amount of penalty which was charged. Petitioner noted that he paid the deficiency as soon as he got the notice and requests a waiver of the penalty.
The tax due for the XXXXX was $$$$$. This tax was due on or before XXXXX pursuant to Utah Code Ann. §59-15-5(4)(1953). Tax Commission records indicate that the tax was not fully paid until XXXXX. Utah Code Ann. §59-15-8 authorizes Respondent to assess a penalty in the event of a deficiency:
If any part of the deficiency is due to negligence or intentional disregard of authorized rules and regulations with knowledge thereof, but without intent to defraud, there shall be added the greater of $50 or ten per cent of the total amount of the deficiency and interest at the rate prescribed in section 59-11-16 [one percent per month] to the amount of the deficiency from the time the return was due. The greater of $50 or ten percent of the amount of the deficiency in Petitioner's case is $50. On XXXXX Respondent assessed a $50 penalty and interest of $$$$$. The sum of the tax, penalty and interest amount to $$$$$. Tax Commission records indicate a credit of $$$$$, leaving a balance due of $$$$$ as of XXXXX. The indicated credit is in excess of the tax due in the amount of $$$$$. The sum of the penalty and interest amounts to $$$$$. This sum less the amount of $$$$$ leaves a balance due of $$$$$ as of XXXXX. Interest has continued to accrue on the account since XXXXX. The Tax Commission has been authorized to assess the greater of $50 or ten percent on a deficiency pursuant to the 1983 amendment to §59-15-8 by chapter 275. It is the use tax which added the $50 penalty effective July 1, 1986. For administrative purposes, the Tax Commission enforced the $50 penalty for both sales and use taxes effective July 1, 1986. Petitioner's return was not due until XXXXX and therefore was subject to the $50 penalty since the due date fell after July 1, 1986. If the Petitioner only paid an additional $$$$$, the amount necessary to pay the tax in full, then the Respondent apparently credited Petitioner for an additional $$$$$, which amount reduced the penalty. If there was an error it was in Petitioner's favor. The Tax Commission shall let the credit stand. However, the Tax Commission finds no basis on which to waive the remainder of the penalty.
DECISION AND ORDER
It is the Decision and Order of the Utah State Tax Commission that Petitioner's request for waiver of penalty and interest on sales and use tax account No. XXXXX for the XXXXX be denied. The assessment of penalty and interest by the Collection Division of the Utah State Tax Commission is hereby affirmed.
DATED this 11 day of December, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis