BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, :
v. : INFORMAL DECISION
COLLECTION
DIVISION OF THE : Appeal No. 87-3249
UTAH STATE TAX COMMISSION, : Acct.
No. XXXXX
Respondent. :
_____________________________________
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 interest on
individual income tax account No. XXXXX for XXXXX. 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 represented the Petitioner.
Petitioner
originally timely filed returns for XXXXX. Petitioner's XXXXX tax return was audited by the IRS because of a
large net operating loss. This audit
was finished on XXXXX. In XXXXX,
Petitioner filed amended returns for XXXXX to reflect the NOL and ITC
carry-back. The XXXXX tax returns were
filed late because Petitioner was waiting for results from the XXXXX audit and
because many of the original accounting records were requested by the FBI for
use in its prosecution of a fraudulent company.
Petitioner
presented a letter dated XXXXX, which letter was from XXXXX, Managing Auditor
of income tax. This letter stated in
part that penalty for XXXXX would be waived, that the Petitioner would be
billed for tax due for XXXXX, and that refunds from XXXXX would be applied to
those taxes due.
Petitioner
stated that the refunds were not properly applied to the tax owing for
XXXXX. Petitioner received the balance
of the refund and was given the go ahead to cash it. Penalty and interest was then assessed against the tax year
XXXXX. Penalty has been waived and Petitioner
requests a waiver of interest.
FINDINGS
The
Tax Commission had sufficient money with which to pay the tax liability for
XXXXX from the time that the amended returns were filed in XXXXX. Petitioner
has established that he relied upon Tax Commission authorization to cash the
refund check.
Interest
is normally assessed when a taxpayer fails to remit sufficient funds to satisfy
a tax liability. The Tax Commission is
denied the use of the money during the period of delinquency. In the present matter, the Tax Commission
has had an opportunity to use the money since XXXXX, the year in which
Petitioner filed amended returns. The
fact that the refunds from XXXXX were not applied pursuant to the arrangement
set forth by XXXXX in the XXXXX letter is not a factor over which Petitioner
had control.
DECISION AND ORDER
Based
on the foregoing, it is the Decision and Order of the Utah State Tax Commission
that interest on individual income tax account No. XXXXX for XXXXX is abated
from the date that Petitioner filed the amended returns.
The
Collection Division of the Utah State Tax Commission is hereby ordered to
adjust its records in accordance with this decision.
DATED
this 9 day of May, 1988.
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