BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX )
:
Petitioner )
: FINDINGS
OF FACT,
v. ) CONCLUSIONS OF LAW
: AND FINAL
DECISION
)
COLLECTION
DIVISION OF THE : Appeal Nos. 89-0122
UTAH STATE TAX
COMMISSION ) and 89-2681
Respondent : Account No. XXXXX
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Paul F. Iwasaki, Presiding
Officer, heard the matter for and in behalf of the Commission. Present and representing the Petitioner was
XXXXX, Attorney at Law.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. The taxes in question are transient room tax
and sales tax.
2. The audit period in question is XXXXX
through XXXXX.
3. The Petitioner is a limited partnership which
is the owner of the XXXXX located in Salt Lake City, Utah.
4. An audit conducted during the periods XXXXX
through XXXXX revealed a deficiency of room tax in the amount of $$$$$. The
same audit also revealed a deficiency in sales tax in the amount of $$$$$.
5. The hotel was built in XXXXX. In XXXXX, management of the hotel was
performed by XXXXX of XXXXX. That firm
was responsible for preparation of financial statements, and the collection and
remittance of sales and room tax returns.
6. In XXXXX, management of the hotel was taken
over by XXXXX Hotel. That firm was
responsible for the same management functions as conducted by its predecessor,
XXXXX of XXXXX.
7. During the first part of XXXXX and through
May of that year, an audit of the hotel was conducted by the Tax Commission and
the above deficiencies were found.
8. On XXXXX the findings of that audit and the
audit report were sent to XXXXX of XXXXX.
9. From XXXXX through XXXXX, XXXXX and the Tax
Commission attempted settlement negotiations regarding the audit report.
10. Neither XXXXX hotel management nor XXXXX
hotel associates knew of the audit deficiencies inasmuch as notice of the
deficiency was sent to XXXXX.
11. The Petitioner did not become aware of the
audit deficiencies until XXXXX, when warrants for the payment of taxes were
served on the hotel.
12. Immediately upon learning of the
deficiencies, the Petitioner paid the outstanding taxes as well as the penalty
and accrued interest.
CONCLUSIONS OF LAW
The
Tax Commission is granted the authority to waive, reduce, or compromise
penalties and interest upon a showing of reasonable cause. (Utah Code Ann.
§59-1-401(8).)
DECISION AND ORDER
In
the present case, the Petitioner's representative was unable to explain why the
notice of the tax deficiency was sent to the managing firm which was no longer
performing such duties for the hotel.
Absent a showing that the Commission had knowledge of the change of
management and erroneously sent notice to the wrong party, it can only be assumed
that the Commission was not put on notice as to the change of management and
sent all its communications to the last representative designated to receive
such by the hotel. It should be noted
that at the very least, the hotel itself was put on constructive notice of the
audit by way of the fact that the auditor's performed the audit at the hotel
itself and went through the records of the hotel. Therefore, the hotel should have been alerted to the pending
outcome of that audit and made inquiry into the findings when none was
forthcoming.
Based
upon the foregoing, the Tax Commission finds that sufficient cause has not been
shown which would justify a waiver of the penalties or interest for the
deficiency assessed on the sales and transient room liabilities for the audit
period XXXXX through XXXXX. It is so
ordered.
DATED
this 4th day of April, 1990.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner