BEFORE THE STATE TAX COMMISSION OF UTAH
v. : INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 88-0628
UTAH STATE TAX COMMISSION, : 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 Petitioners' XXXXX and XXXXX personal income tax returns. Pursuant to Utah Code Ann. §63-46b-5(1)(b), no hearing was held. A review of Petitioners' file served as the evidentiary basis for this decision.
Income Tax Return
Petitioners, XXXXX, filed a timely income tax refund return for XXXXX. However, a XXXXX audit showed that Petitioners had failed to report all income earned during XXXXX. An additional $$$$$ was earned from XXXXX. After adding the additional wages to Petitioners' taxable income, it was determined that an additional tax of $$$$$ was due. A late payment penalty and interest were assessed Petitioners' account. Petitioners agreed to pay the tax but noted that no withholding credits were made for the additional wages earned at XXXXX. Petitioners requested that the Commission credit Petitioners' account and notify them of the correct amount due.
A review of the Commission files shows that XXXXX did not have an active withholding account in XXXXX. Petitioners were informed that XXXXX had not remitted any tax for credit to Petitioners' account. Petitioners assert that state taxes were, in fact, withheld from wages earned at XXXXX, but offered no evidence to support this claim. Petitioners also assert that they were unable to determine how much money they earned from XXXXX during XXXXX and were therefore unable to report the proper amount on their return. Petitioners request that the late penalty be waived since the error was due to circumstances beyond their control.
Income Tax return
Petitioners filed a timely extended return in XXXXX but failed to include with the extension request an amount equal to XXXXX percent of the tax due. Petitioners were assessed a two percent underpayment penalty and interest. Petitioners assert that the Commission has erroneously credited payments made to meet XXXXX liabilities to XXXXX account.
Utah Code Ann. §59-10-501 provides that "every person liable for. . . [income tax], must keep. . . records, render. . . statements, make. . . returns, and comply with. . . [Commission rules.]" and must make these records available to the Commission to show whether or not the person is liable for the tax. It is the taxpayer's ultimate responsibility to track and report all wages upon which taxes are due. Failure to do so subjects taxpayers to liability for penalty assessments. Although Petitioners assert that there should be a withholding credit on the additional wages, Tax Commission records indicate no withholding was remitted for credit to Petitioners' account for that period. Petitioners had the burden of proof to show the credit was due but failed to meet that burden. Utah Admin. R. R861-07A-l(G).
It should be noted that any claim Petitioners may have against their employer for money withheld but not remitted must be taken up with the employer. The Commission has no authority to involve itself in such matters.
Utah Code Ann. §59-10-516 states that a payment equaling 80 percent of the tax due or 100 percent of the tax paid for the previous year must accompany an extension request. Failure to remit this amount subjects the taxpayer to liability for a two percent underpayment penalty. Utah Code Ann. §59-1-401. Thus, the $$$$$ underpayment penalty assessed Petitioners' account was valid and appropriate.
Utah Code Ann. §59-10-537 stipulates that interest must be paid on tax due "whether or not an extension was requested." Therefore, the $$$$$ interest assessed Petitioners' account was also valid and appropriate.
DECISION AND ORDER
Based on the foregoing facts, it is the decision and order of the Commission that the request for a 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