BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 88-0610
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
STATEMENT OF CASE
This is an appeal to the Utah State Tax Commission for reconsideration of a Commission decision denying a request for waiver of penalty and interest assessments on Petitioner's XXXXX quarterly withholding returns and first quarter XXXXX return. Pursuant to Utah Code Ann. §63-46b-5(1)(b), no hearing withheld. A review of Petitioner's file served as the evidentiary basis for this decision.
Petitioner, XXXXX, failed to file timely withholding returns for all quarters of XXXXX and for the first quarter of XXXXX, and was assessed late filing penalties and interest. Petitioner asserts that his accountant failed to notify him of any tax due, and asks that the penalty and interest assessments be waived for this reason. Alternatively, the Petitioner argues that the penalties are excessive, arbitrary, and inconsistent, and should be adjusted to reflect more equitable penalty and interest assessments.
Utah Code Ann. §59-10-406 provides that withholding returns are due on the last day of the month following the calendar quarter and that failure to timely file these returns subjects the employer to liability for penalty and interest assessments. Utah Code Ann. §59-1-401(1)(b) provides that a penalty of the greater of $$$$$ or 10 percent of the tax due shall be assessed for failure to file timely returns. An additional penalty of the greater of $$$$$ or 10 percent of the tax due shall be assessed for failure to remit the tax due within 90 days of the due date.
Petitioner's failure to timely file the returns and remit the tax due within the 90 days allowed by law subjected him to liability for penalties of as much as $$$$$ (XXXXX late filed returns at $$$$$ each and XXXXX late payment penalties at $$$$$ each). Utah Code Ann. §59-1-402 authorizes the Commission to assess interest charges at the rate of 12 percent annually on unpaid tax. Any payments are credited first to penalty, then to interest, and finally to tax.
Although the Commission has the authority to waive any penalty and interest assessments, the Commission will do so only upon a showing that noncompliance was due to reasonable cause. Reliance upon tax accountants may, in unusual circumstances, be seen as reasonable cause for noncompliance, however, the ultimate responsibility for filing and payment of taxes always remains with the taxpayer. In this case, Petitioner's reliance on a tax accountant, absent evidence to the contrary, cannot be considered reasonable cause.
Further review of Petitioner's account shows that Commission errors have caused the Petitioner's account to be assessed penalties less than those legally allowed. However, the Commission will except payment of these penalty and interest assessments as payment in full.
DECISION AND ORDER
Based on the foregoing facts, it is the Decision and Order of the Utah State Tax Commission that the request for waiver of penalty and interest assessments be denied.
DATED this 29 day of September, 1988.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH.
FOR THE COMMISSION
G. Blaine Davis