89-0642 - Sales

 

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

Petitioner : FINDINGS OF FACT,

: CONCLUSIONS OF LAW

v. : AND FINAL DECISION

:

: Appeal No. 89-0642

COLLECTION DIVISION OF THE :

UTAH STATE TAX COMMISSION :

: Acct No. XXXXX

Respondent. :

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Utah Rules of Administrative Procedure and the Administrative Procedures Act for formal adjudicative proceedings on the XXXXX before Joseph G. Linford, Presiding Officer. Petitioner was represented by XXXXX and XXXXX. No one representing the Respondent appeared at the hearing.

After reviewing the evidence and arguments of the parties and the recommendation of the Presiding Officer, the Tax Commission hereby makes its:

FINDINGS OF FACT

1. The tax in question is sales tax.

2. The period in question is the first three quarters of XXXXX.

3. In the years previous to the period in question, sales tax forms were normally sent directly to Petitioner from the Utah State Tax Commission. For the periods in question, these forms were either not sent by the Commission or were lost.

4. Petitioners employed an outside financial services firm to handle their taxes. When Petitioners would receive tax forms in past years from the Tax Commission, Petitioners would forward those forms to their accountant at the financial services firm for processing.

5. For the period in question, since the forms were never received by the Petitioner, Petitioner made the erroneous assumption that those forms had been sent directly to its accountant. The accountant, relying upon the practices of past years, assumed that the forms had been sent to the Petitioner and was awaiting Petitioners submission of the report forms to the accountant. Because of this misunderstanding, i.e., both Petitioner and the Petitioner's accountant believing that the matter was being taken care of by the other party when in fact it was not, the tax forms were not filed until Petitioner discovered the error.

6. Based upon these circumstances, Petitioner requests a waiver of penalties and interest in this case.

CONCLUSIONS OF LAW

Utah Code Ann. 59-1-401,59-1-402,59-12-107(19) and59-12-111 (1987 Rep., 1989 Supp.) provide that penalties and interest shall be assessed for the late payment of sales taxes and the late filing of sales tax returns. Utah Code Ann. 59-1-401(8) (1987 Rep., 1989 Supp.) provides that upon reasonable cause shown the Tax Commission may waive or reduce the penalties and interest assessed under the above statutes. Such reasonable cause has been shown for the waiver of the penalties in this case inasmuch as the late filing of the returns was due to a misunderstanding between Petitioner and its accountant. Such reasonable cause has not been shown for the waiver of the interest amounts assessed due to the fact that the state did not have use of the tax funds involved between the time those taxes should have been paid and the time that they actually were paid. The state is therefore entitled to interest on those amounts.

DECISION AND ORDER

Based upon the foregoing, it is the decision and order of the Utah State Tax Commission that the penalties but not the interest in this case be waived. Petitioner's request for waiver of penalties is therefore granted. Petitioner's request for waiver of interest is denied.

DATED this 1st day of December, 1989.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner