BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
AUDITING DIVISION OF THE : Appeal Nos. 87-2677 to 87-2678
STATE TAX COMMISSION OF UTAH, ) Account Nos. XXXXX
STATEMENT OF CASE
This is an appeal to the Utah State Tax Commission from sales and withholding tax audits prepared by the Auditing Division of the Utah State Tax Commission (Respondent). An informal hearing was held on XXXXX in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard the matter for the Tax Commission. XXXXX, Attorney at Law, represented the Petitioner. XXXXX were also present. XXXXX, Compliance Auditor, and XXXXX, Supervisor, represented the Respondent.
Petitioner did not dispute the amount of tax assessed, but did state that the penalty was excessive. XXXXX had suffered a nervous breakdown in XXXXX and was taking prescription drugs during the periods in question. A side effect of the drug (XXXXX) was that XXXXX recent memory capability was affected. His ability to handle paper work, accounting matters and deadlines was also affected by his nervous breakdown. Petitioner stated that he is, at most, negligent. Petitioner also raised the issue of the amount of income tax due for XXXXX. Respondent indicated that this matter has been resolved. Respondent accepted Petitioner's income tax returns for these years.
Respondent stated that withholding and sales and use tax returns were timely prepared by Petitioner's accountant but that Petitioner chose not to file. Respondent stated that Petitioner made the statement that he did not have the money to file so he did not file the returns. Respondent stated that Petitioner was capable enough to give his accountant information for the returns and he was capable enough to operate the business.
Petitioner stated in the hearing that he put off paying the taxes due in order to get on his feet financially. The Tax Commission finds that Petitioner intentionally evaded the tax and is subject to the greater of $$$$$ per period or %%%%% of the tax due pursuant to Utah Code Ann. §59-1-401(3)(c) (1953).
Respondent had the burden of proof to establish fraud for the periods in which the Respondent assessed fraud. Insufficient evidence has been presented to support a finding of fraud. The Tax Commission hereby reduces the fraud penalty to an intent to evade penalty for the periods in which the fraud penalty was assessed.
DECISION AND ORDER
Based on the foregoing, the Utah State Tax Commission hereby assesses a %%%%% intent to evade penalty on sales and use tax account No. XXXXX and withholding tax account No. XXXXX for the periods in question.
The Auditing Division of the Utah State Tax Commission is hereby ordered to adjust its records in accordance with this decision.
DATED this 7 day of June, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
R. H. Hansen Roger O. Tew
Joe B. Pacheco G. Blaine Davis