88-1149 - Income

 

BEFORE THE STATE TAX COMMISSION OF UTAH

_____________________________________

XXXXX

Petitioner, :

v. : INFORMAL DECISION

:

COLLECTION DIVISION OF THE : Appeal No. 88-1149

UTAH STATE TAX COMMISSION, : Acct. No. XXXXX

Respondent. :

_____________________________________

STATEMENT OF CASE

This is an appeal to the Utah State Tax Commission for reconsideration of a Commission decision denying a request for a waiver of a penalty assessment on Petitioners' XXXXX income tax return. 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.

Petitioners filed a timely XXXXX personal income tax return but failed to remit the full tax due as reported on the return. Petitioners were assessed a $$$$$ underpayment penalty and interest. Petitioners assert that the income tax instruction booklet contained no information regarding penalties and that the retrospective enacting of Utah Code Ann. 59-1-401, dealing with penalties and interest, was unfair since the information regarding the penalties was not available to the Petitioners until after the filing due date.

FINDINGS

Utah Code Ann. 59-14a-89(a) (supplement 1986) assessed a penalty equal to the greater of $$$$$ or five percent of the amount of the tax for each month the tax was delinquent, not to exceed a total of 25 percent for failure to file an income tax return or pay the tax required by the due date. Using these penalty calculations, which were indicated on page seven of the XXXXX instruction booklet, Petitioners' penalty for the late payment of the tax due would be $$$$$. This penalty is calculated on the $$$$$ underpayment which was delinquent for XXXXX months.

In XXXXX the Legislature changed the calculation method of penalty assessments. Utah Code Ann. 59-1-401(2)(a) now provides that a penalty of the greater of $$$$$ or ten percent of the tax due shall be assessed for failure to pay any tax as reported on a filed return. Pursuant to Utah Administrative Rule R-861-lOA-l(D), it is presumed that the parties dealing with the Commission are familiar with the revenue laws of the state of Utah. Petitioners' failure to remit the tax due with the filed report subjected them to liability for the late payment penalty. Because Petitioners feel they should be held accountable for only those penalties of which they had notice, penalties as indicated in the XXXXX instruction booklet should be applied.

DECISION AND ORDER

Based on the foregoing facts, it is the decision and order of the Commission that the penalty assessed Petitioners' account be reduced to $$$$$.