87-2320 - Income

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

Petitioner, : FINDINGS OF FACT,

v. : CONCLUSIONS OF LAW

: AND FINAL DECISION

AUDITING DIVISION OF THE :

UTAH STATE TAX COMMISSION : Appeal No. 87-2320

Respondent. :

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission for a telephone hearing pursuant to the Administrative Procedures Act XXXXX before Joseph G. Linford, Presiding Officer. The Petitioner appeared and was also represented by XXXXX. Respondent was represented by XXXXX, Assistant Utah Attorney General and by XXXXX of the Auditing Division of the Utah State Tax Commission. In this appeal, Petitioner was originally contesting the assessment of the tax, but during hearing Petitioner withdrew his challenge to the tax Relief and petitioned only for waiver of certain penalty and interest amounts. After reviewing the evidence and arguments of the parties and the recommendation of the Presiding Officer, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is income tax.

2. The period in question in the tax year XXXXX.

3. Petitioner filed his income tax return for the calendar year XXXXX on XXXXX. On this return, Petitioner carried forward a XXXXX net operating loss to offset his net operating gain in XXXXX. The affect of this was that according to his return there were no taxes due for the year XXXXX. Thus, Petitioner did not at that time pay any tax.

4. Respondent subsequently sent a statutory notice of deficiency to Petitioner which disallowed this net operating loss carryover. On XXXXX, Petitioner filed a Petition for Redetermination contending that he should be allowed to carry over the XXXXX net operating loss to XXXXX.

5. Petitioner now concedes that he in fact cannot be allowed such a carryover and therefore petitions for a waiver of the $50 penalty assessed for the late payment of the taxes in question and for the interest amounts assessed following Petitioner's filing for redetermination. Petitioner does not contest the $50 penalty assessed for his late filing of his return. Petitioner feels also that he is entitled to a waiver of the $50 late payment penalty because he did not pay that tax on the good faith assumption that there was no tax due. He believes he should be granted the waiver of interest assessed after he filed his Petition for Redetermination on the grounds that he alleges the Tax Commission took an inordinate amount of time to respond to that petition.

CONCLUSIONS OF LAW

1. Utah Code Ann. 59-1-401,59-1-402,59-12-107(19),59-12-110 and59-12-111 provide that penalties and interest shall be assessed for the late payment of taxes and the late filing of tax returns.

2. Utah Code Ann. 59-1-401(8) provides that the Tax Commission may on reasonable cause shown waive a portion or all of the penalties and interest assessed under the above statutes.

3. Such reasonable cause has not been shown for waiver of the penalty. The mere fact that the Petitioner operated under a good faith assumption that no tax would be due is not sufficient to waive the penalty for non-payment of that tax because mere negligence on the fault of the taxpayer is not sufficient reasonable cause for a waiver of penalty. Reasonable cause for waiver of the interest amounts that accrued after Petitioner paid the taxes in question has been shown.

DECISION AND ORDER

Based on the foregoing, it is the decision and order of the Utah State Tax Commission that the request of Petitioner for waiver of penalties be denied. Interest that accrued after the date Petitioner paid the taxes in question is waived.

DATED this 27 day of February, 1990.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner

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